Ace Wisdom

Deferred Money!  Retirement Programs!  Taxable Earnings!  Non-Taxable Accounts!

I apologize ahead of time if I insult the intelligence of anyone, but there seems to be continuing confusion about the terminology of “retirement” money.

When you work (yes work), the money you earn is taxed by the Federal and State Government.  The result is you “take home” a lot less than you earn.  You will retire some day.  Other than Social Security the only way to provide for your own retirement is to save (s-a-v-e).  There is that word again.  Save!  Everything you save has already been taxed and it is yours to put in the bank or coffee cans.

In the 1980’s, the Federal Government decided to create programs that were an incentive for you to save.  The idea was to allow you to take part of your wages and put it into a secure account.  The accounts were called an IRA’s, 40k(k), and for public workers, 403’s.  The incentive was, you could set your wages aside without paying Federal and State taxes.  Now come the new terms.  You were setting aside pre-tax money.  Taxes are deferred until you withdraw from the unique accounts (IRA, 401(k), 403).  Because you are avoiding paying taxes, you have more money to invest and can accumulate a bigger retirement “nest egg”.  The most common reference to these accounts avoiding taxes on earnings is “tax-deferred” accounts.

Okay!  You can either save for retirement with the money you bring home each payday (you’ve paid the taxes) or save through retirement accounts at work (you’ve deferred the taxes).

You can only defer money into the IRA, 401K, 403 from earnings (W-2).

You will eventually pay taxes on the deferred money.  Because the Government allows you to temporarily avoid taxes, there are rules.  You can not touch the deferred accounts until you are 59.5 years of age (and then there are conditions).  You cannot defer the tax obligation forever.  You must start withdrawing prescribed amounts of deferred money when you reach 70.5 years of age.  If you try to pass the deferred money onto your children, they will pay the tax obligation.  Someone will eventually pay taxes on the deferred money.  There is no “free money” anywhere.

It is pretty simple.  Pay taxes now on your earnings and save on your own.  Defer some of the taxes on earnings through IRA’s, 401(k)s, or 403’s and pay taxes when you withdraw and use the money.  It litterally is the government saying “pay me taxes now or pay me later”.

The term “retirement money” can be already taxed earnings or tax deferred money.  Be clear when you use the term “retirement money”!

Love,

Dad

 

“Breaker 19, Breaker 19.  This is the Rubber Duck”.  We’ve got us a birthday.  Grasshopper No. 3 celebrated his “one-half century” milestone last year so tomorrow we just add “one”.  Happy Birthday No.3.  I remember it well.

I need to make a quick trip down memory lane.  In the 1960’s, WTMJ-TV in Milwaukee carried a weekly Sunday noon show called “Bowling with the Champs”.  Grandpa George and I would watch regularly.  There was also a professional tour that broadcast on Saturday afternoons.  A major tournament was “The Masters”.  It is now 50 years later.  There is still a “Masters” and this week it is taking place in Green Bay.  The tournament starts with well over 100 bowlers and ends with the top 5 competing for the $50,000 prize.  Why do I mention this?  The two top pro-bowlers in the 50’s were Don Carter and Dick Weber.  The top qualifier this week in Green Bay this week is Peter Weber, the son of Dick.  It takes me back.

Grasshopper No.4 has been coaching youth football for “umtyump” years.  One of the kids that he saw develop on his teams was Noah Stengel who played quarterback.  Noah went on to play quarterback for Sheboygan North High School.  On Wednesday,  Noah committed to play for the UW-Madison as a “walk-on enrollee”.  The only change is that UW intends to use Noah as a wide receiver.  Grasshopper No.4 has got to feel pretty good because I’m sure in some small way he knows he contributed to the development of a talented young man.

Continuing the football theme, Grandson Mitchell played for Middleton High School football team as the No.2 tight end last year.  He played behind Mitchell Herl who was the No.1 tight end.  Herl will also be a “walk-on” to the UW-Madison football team next Fall.  Herl is 6ft.4in. tall and weighs 230 pounds.  He was fun to watch and caught a lot of passes for touchdowns.  Now Grandson Mitchell gets to move up to No.1 as he enters his senior year at Middleton.  By the way “our Mitchell” is 6ft.2in. and growing.

Life just keeps moving.  Sometimes it even repeats itself.  Have a good weekend.

Love,

Dad

 

You can tell the winter is getting long when northern Wisconsin sponsors  snowmobile races with ladies in bikinis.  Really?  The snowmobiles reach speeds up to 120 mph.  I wonder what the “wind chill factor” is at those speeds.  It gives a whole a whole new meaning to “Cool Chick”.

I got my German car serviced for free again.  My car was purchased with a full service guarantee for 4 years or 50,000 miles.  That means everything: oil, brakes, wiper blades and burnt out headlights.  I’m good until the middle of 2017.  Every service includes a free car wash.  This whole deal violates one of my “life rules”  — “Nothing is free”!  Wait!  Maybe I paid for all this “free service” when I bought the car.  You think?

Seattle lost the Super Bowl.  All week prior to the Super Bowl, running back Marshawn Lynch played “dumb jock” as usual.  He showed up at the Tuesday Press Conference and answered everything with “I’m here so I won’t get fined”.  Then he had a Press meeting on Wednesday and changed his response to “You know why I’m here”.  And then, and then, Marshawn did a spoof that hit U-Tube.  It shows him answering questions like a human being and eating Skittles candy from a bowl.  U-Tube got over 3 million “hits”.  I bet that Skittles hires Marshawn to do advertising.  Now who is the “dumb jock”?  The only dumb ones are the Press who can’t find intelligent questions to ask.

Your Mom and I have seen “Sniper” and “Unbroken” at the Marcus for free.

Your Mom and I have watched Season 5 of Downton Abbey for free (Actually Grasshopper No.1 graciously loaded it onto to VUDU).

Your Mom and I have scheduled the Fireside and it is free (we owe thanks to No.1 again because it came as a Christmas present).

I have to guard against this “free sh–“.  It is addictive.

Full Moon tonight (to be hidden by the snow storm).

Love,

Dad

Your Mom and I saw “Once” at the PAC last night.  Spending quality time with your mom — priceless.

A belated Happy Birthday to Granddaughter Danielle.  Her birthday was earlier this week.  She was the first grandchild.  I can always remember her   year of birth, 1985, because it coincides with the year my job change forced our family to move to Appleton.  30 years ago!  Really?

Grasshopper No.5 works for Gamestop which is very profitable (lots of cash flow).  Gamestop sometimes becomes victim of financial gurus predicting that the Gamestop stores will become obsolete and Gamestop will suffer the same fate as Blockbuster.  Hold on!  It appears the major customers of Gamestop are young, aimless males in their teens and 20’s who like to browse new games and “trade” old games.  Some of the young males don’t even talk, they just grunt.  Also Gamestop is growing fast on mobile applications.  Me thinks Gamestop has a good business model.

The Super Bowl phenomenon produces all kinds of demeaning sh–.  I see that animals are picking the winner.  Dolphins push a certain colored ball, Pandas chew colored flowers and chickens pick pebbles.  The latest is alligators jump out of the water and swallow a blue or green chicken.  Oops, cancel the chickens picking a winner.  They were eaten by the alligator.

My friendly City inspector sent me an offical letter notifying me that I was violating a city ordinance.  If I didn’t get this dispicable matter cleared up, the “black mark” would remain on my property records forever.  If I ever tried to sell the house, the violation would have to be fixed before the house could be sold.  What you ask “did I do”?  When I had a new furnace installed two years ago, I didn’t have a final city inspection certifying that everything was done correctly.  Two years ago?  The whole thing almost sounds like a skam.

Super Bowl Sunday!  Finally.

Ground Hog Day on Monday. Finally.

Love,

Dad

 

 

The east coast is getting pelted by wind and snow.  People rush to the grocery store to help them “survive” for a couple of days.  Really?  What do people need?  First is beer!  Of course, why didn’t I think of that.  Second was “bubble bath” soap to keep the kids busy.  Third was ice cream.

The “tribal dance” on preparing income taxes for 2014 has begun.  Forms are starting to arrive in the mail and information is funneling in on 401(k)’s and IRA’s.  I have been hooked on “Turbo-Tax”to prepare my taxes even though it costs me $50 for the software each year.  I recently spent my money and got the Deluxe version of “Turbo”.  I found out several weeks after buying Turbo-Tax that after 10 years, Deluxe version does not do what it did in the past.  One of the forms I need has been transfered to “Premier” version of software.  I needed to upgrade for another $30.  Assh—-.  I have no problem with Turbo-Tax changing their sales programs but to be sneaky about it really burns my a–.  Wait!  News alert.  Turbo-Tax has received such negative “feed back” that they are offering a $25 refund for anyone who was misinformed.  What a gesture!  What happened to the $5 extra that I had to pay.  Okay, okay.  I won’t quibble over $5.  I went on line to claim my $25 and found out that I will get it after  I file my taxes in April.  Really?  Why do I have to wait for my refund?  April?  I predict the next roadblock will be proving that I have been a long term customer of Turbo-Tax along with purchase receipts.  Alas, you know as well as I do that I will never get my $25 because I won’t have all the information.  I get the ultimate laugh.  I will never, ever use “Turbo” again.  Clark Howard says TaxAct is pretty good for the money.

And so it goes.  Tax time is never a fun time.  Snow last night.  The wrong NFL teams will be in the Super Bowl.  The good news is your Mom and I have been eating free at our favorite restaurant by using our Christmas gift card from Grasshopper No.1 (and favorite Son-in-law).  Also the Marcus Theater gift card keeps giving (from Christmas) and is doubly good if you are a senior.

Inflate those footballs.

Love

Dad

The price of gasoline stays low.  It almost makes me want to buy a Suburban or Ford Excursion even though they only get 15 mpg.

I thought Christmas was a time when people “ran up their credit cards” and then had to deal with payments in January.  That doesn’t seem to be the case.  I’m hearing about Grasshoppers buying 65 inch smart HDTV’s, new couches, new love seats, new recliners and new refrigerators.  What the hell?  What did I miss?

I was watching an old TV series “Winds of War” from 1991.  It takes place before and during World War II.  One of the classic cars driven by a rich government official was a 1940 white Lincoln convertible.  Beautiful.  The design was ahead of it’s time.  It might not fit in my garage.

I see that the Super Bowl will be played under the scandal of “deflated balls”.  New England is supposed to have let the air out of 11 footballs used during a cold, raining day.  A soft football apparently is easier to hold, throw and catch.  Really?  Sh– like this has been happening in sports since time began.  NBA basketball teams have been charged with loosening rims on the home team baskets so that the ball would not bounce so violently.  Some NBA teams were accused of using tight nets so the ball would not fall through quickly allowing the home team to get back and defend.  Baseball teams have “doctored” the baseball with hair gel, spit, and vaseline to create an unpredictable flight of a pitch.  Pine tar has been rubbed on baseball bats to create a better grip.  Even NFL football players used “stick-em” gel and occasionally other illegal crap for hands to better grip on balls thrown to them.  Now getting back to “deflated footballs”.  I hope they find the perpatrators of the dastardly deed of “deflation”.  NFL football is a high integrity game and there is no room for “soft balls”.  I am shocked.

New medical rules for 2015.  Now I just have to find out what they are.

Love,

Dad

 

Grasshopper No.4 talks about “it”.  “It” is an intangible quality possessed by winners.  Somehow, someway people with “it” find ways to win against all odds.  It is a basketball swishing through the net from half-court to win the game again.  LeBron James seems to do that.  He has that “it” quality.  It is Tiger woods sinking a golf ball from the trap to win a tournament.  Tiger has had the “it” quality.

Which brings me to the Green Bay Packers.  They had the perfect game plan to beat Seattle on Sunday yet they lost at the end because Seattle was lucky.  If Brandon Bostick had not had a brain fart on the “on-side kick” near the end of the game. the Packers might have won.  If Seattle does not convert on a 2-point conversion, the Packers might have won.

Russell Wilson has “it”.  Yes the Packers lost but Wilson has the knack of doing the right thing in the clutch.  On Sunday he ran for a touchdown in the waning minutes.  He threw a “wobbly duck” pass on the 2 point conversion that should never have been completed.  And then Wilson throws a touchdown pass in overtime to win the game.  How many times has Wilson done the same thing in his career.  He worked the magic when he quarterbacked at Wisconsin.  He has worked the magic at Seattle.  He has the mystical “it” factor.  Yes the Packers lost the NFC Championship game.  They were zapped by “it”.

My inside information is that the Packers are addicted to the board game “Settlers of Catan”.  It is played in the club house with up to 6 players.  I guess it takes 90 minutes to play.  You are one of the guys if you are invited to play “Settlers of Catan”.  They need to find a new game.  One that teaches football lessons.  One that deals with “it”.

If you acquire “it” you will know.  It will change your life.

I have proof that Grasshopper No.1 and hubby have a 65 inch HDTV with “smart” capabilities, 3D and the new 4K (4 times clearer that existing HD). Do you need all that stuff on a TV?  It must be nice.

Love,

Dad