Weekly Roundup April 20 - 24, 2020

Anne Stanley

Among the best stories from Retirement Daily for April 20 - 24: Retained earnings, qualified charitable deductions, and Medicare premiums.

Robert Powell writes this week: In his most recent letter to shareholders, Warren Buffett, the chairman of Berkshire Hathaway, discussed how "Charlie (Munger) and I have long focused on using retained earnings advantageously."

Retained earnings, according to our friends at Investopedia, "is the amount of net income left over for the business after it has paid out dividends to its shareholders. A business generates earnings that can be positive (profits) or negative (losses).

"Positive profits give a lot of room to the business owner(s) or the company management to utilize the surplus money earned. Often this profit is paid out to shareholders, but it can also be reinvested back into the company for growth purposes. The money not paid to shareholders counts as retained earnings."

This got us thinking. Which S&P 500 companies have the greatest retained earnings as a percentage of net income?

Read more in Powell's column, Using Retained Earnings Advantageously

And in case you missed them, here are some more great stories in Retirement Daily this week:

Best Way to Use Qualified Charitable Deductions for RMDs

Question: My sister is struggling with this question. When giving the required minimum distribution (RMD) from an individual retirement account (IRA) to a qualified charity, which method of giving (hypothetically and in general) results in the best tax savings for the donor/owner of the IRA?

Ask Bob: Stock Splits and Medicare Premiums

Question: I had a stock split in 2019 and was taxed on it, which put me in a higher bracket for one year -- can anything be done about it to lower the tax? I was interested in reducing the Social Security Medicare increase this year -- can I do anything? I know about appeals, but what grounds do I have?

Ask Bob: Maxing Out Retirement Contributions

Question: If I am maxing out a 457(b), can I also participate in my family-owned company (second job) SIMPLE IRA and max out there as well? And take advantage of maxing out on a Roth IRA every year, too?

Planning for Long-Term Care Costs

Adviser Kenneth Waltzer breaks down long-term care needs and services, and ways to plan for your future.

Ask Bob: Which Is Better, an Annuity, or the Lump Sum?

Question: My employer is closing our pension fund and giving the options of rolling into a no-cost annuity where my lifetime benefit could be with or without the plan to include survivor benefits for my spouse; or the other option would be to take a lump sum payout and invest on our own. I have always heard that the best option is the lump sum payout. Is that correct?

How to Talk About Money With Your Loved Ones

Adviser Danielle Howard outlines the advantages of having financial discussions with your spouse and family, and offers tips on how to get the conversation started.

Ask Bob: Real Estate and Long-Term Capital Gains

Question: I am currently on Social Security and selling a family home. How do I handle this as long-term capital gain?

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