Narwhals
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Geopolitics
Last night two interesting saltines passed up bound. The first at sunset, the BBC Ukraine was headed to Duluth. Here BBC stands for the shipping line that runs the boat and not the British news organization. The other one was German. It was headed to Thunder Bay. Both boats were flying flags of convenience. The Ukraine references the war there that Russia started and after more than four years seems to be losing now and Federal Minnesota reminded Anne of last winter’s conflict in Minneapolis, between ICE and the Americans there.
Oh, and my laptop died last night. Looks like iPhone posting until I get home.
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Axe-Maxxing
Once upon a time ago, May was Anne’s birthday-month and July was mine. Everything was fine then things changed. I guess it began when she added Mother’s Day to her month-long celebration. It seemed to fit nicely at first, remaining well within her celebratory month. Father’s Day followed but fell short of July. Fast-forward, David marries Maren, then first comes Declan and then comes Wyatt. All of whom have July birthdays. Add in Bruce, Maren’s dad, and my birthday month is beginning to get a little crowded. That’s OK, I call this Axe-Maxxing.
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Death and Taxes
“Compound interest is the most powerful force in the universe.” — Albert Einstein
In the video game Civilization this quote is voiced when a player wins the Economics technology. Although the game attributes this quote to Einstein, there is no proof that he actually said it. I think that this game does this because as one of the fathers of modern atomics, him saying this makes it seem more powerful than simply counting coin.
Yesterday, we Zoomed with our financial advisor to discuss tax planning. With our own approaching decrepitude, we had some questions about taxes. The majority of our savings are in taxed deferred accounts. This is an investment vehicle that was designed to generate retirement savings and pay for the Reagan tax cuts, but when you meet retirement age there is a Required Minimum Distribution (RMD) that must be taken and then paid taxes on. We are at the cusp of that age. For all of our adult lives, we have been good little savers, but now it is time to spend that money, or at least pull it out of our tax deferred accounts and pay taxes on that withdrawal. Our motive for calling this meeting was to minimize our tax pain in this process.
Eric, our financial advisor had called in Jerome, an out-of-town expert to help advise us. Good thing, because unlike Jerome, whose animated image appeared after we logged into the meeting, Eric was represented by an avatar. Turns out Eric had suffered a softball injury and had his jaw wired shut, and he did not want us to see his current condition. That’s OK, Jerome was more than capable of handling the meeting. Our first question and the one that end up dominating the meeting was, does a Roth conversion make sense for us?
Let’s cut to the chase. The short answer is no, because we are now too old. When you do a Roth conversion there is a loss, but you hope to make up for that loss over time. Our problem is that at our ages, we do not have enough time left. We would need another thirty years, which if we had our fathers’ longevity then we could do it, but if we ended up with our mother’s, we would lose money. So, we will be keeping the horse that we rode in on and not converting our tax deferred investments. Long story short there are two things that are unavoidable in life, death and taxes and we’ll be facing one or the other eventually.