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Since Joe Biden was inaugurated on the 20^th of January, it is a good time to address some changes he might make based on his platform.  The question is, what does “BIDENOMICS” mean to your wallet or purse?

            Over the years, I have found that politicians’ actions are often incongruent to their words.  Here are some of his proposed changes:

1. Those Making Under $400,000 Will Be Unaffected: His proposal is to leave those earners alone and add a “Social Security Increase Tax” of 6.2% on ALL income earned over $400,000.  Social security is in jeopardy as baby boomers (10,000 people turn 65 every day) born from 1946-1964, are withdrawing social security benefits faster than working Americans are contributing; hence, the affluent would be bridging the social security gap. 
2. Income Earners Over $1,000,000 Would Incur Higher Capital Gains Taxes: Americans with over $1 million in total income would see income received from dividends, as well as capital gains, taxed like their wages.  In this scenario, if you had a stock or business sale, your capital gains tax doubles from 20% to roughly 40%.  This would change many business and investment decisions.  You should consider making those sales now, as usually these changes are “Grandfathered.”
3. Corporate Tax Rates Would Be Increased:  His proposal would increase corporate tax rates from 21% to 28%, a 33% increase.  This is a big change that could have corporations reevaluate moving or setting up subsidiaries overseas. 

In essence, his proposals would be taxing the rich and protecting the middle class.  Based on our current national and state budget deficits, I do see the middle class paying more taxes eventually.

President Biden has vastly different viewpoints on many issues than former President Trump, especially on energy, climate change, health care and infrastructure.  The “Green New Deal” was a centerpiece in Biden’s campaign.

Some areas where President Biden said he would concentrate on include:

• Traditional Infrastructure
• Digital Infrastructure
• Electric Cars
• Cannabis
• Telemedicine
• Green and Clean Energy

There has been much unhappiness and angst over the fact that Congress had taken so long to pass an additional stimulus package, since the one that ended on July 31, 2020.

Some highlights of Biden’s $1.9 Trillion stimulus relief plan called The American Rescue Plan include:

• Extended Unemployment Benefits ($120B)

Jobless workers will get $300-$400/week through September 2021.

• Schools and Colleges ($170B)
• The Federal minimum wage increases to $15/hour.
• Covid-19 ($100B) includes $70B to expand testing and immunization centers and $30B for PPE.
• A 2^nd Stimulus Check ($166B)

Individuals making less than $75,000/year receive $600, couples making up to $150,000/year receive his target $1400 and $600/child.

• State and Local Governments (350B)
• Small Business Boost ($325B) Including

Triple-P (Paycheck Protection Program) Funding ($284B) plus $20B for businesses in low-income communities, and $15B for struggling live venues, movie theatres, and museums to name a few venues.

What we do NOT know:

1. How much money the government will continue to print?
2. When or if the COVID-19 virus will end?
3. When will companies bring people back to work or IF they will bring employees back?

What we DO know:

1. Income taxes will go up on the wealthy!
2. Estate taxes will go up on the wealthy!

Biden’s Taxes on Wealthy Estates: example of a $100M estate (#’s are in Millions)

Value of the Original Asset  ($100M)                                       $100

Cap gains taxed as ordinary income 39.6% + 3.8% NIIT*=   43.4%

Capital gains tax owed:                                                               $43.40

Value of the Remaining Estate:                                                            $56.60

Biden’s estate tax exemption ($3.5 million)                              $3.50

Taxable estate                                                                                $53.10

Biden’s estate tax rate (45%)                                                          45%

Taxes owed on the estate                                  $43.40+         $23.90

Total taxes paid on a $100 million asset                    =          $67.30

Effective tax rate                                                                           67.3%

*Note: NIIT (Net Investment Income Tax) is an Obama care tax.

            This may or may not happen; however, if everything proposed becomes law, there will be a renewed interest in ILIT (Irrevocable Life Insurance Trust) owned life insurance to leverage off life insurance companies (instead of paying dollar for dollar) to pay these taxes with pennies on the dollar, which my firm we can assist with.

Feel Free to reach out to Robert Intelisano CLU, CSA, LUTCF who is a CSA (Certified Senior Advisor) and who owns an independent Forest Hills based insurance agency since 1999 at Rob@InsuranceDoctor.us.

Thinking back to late March 2020, Covid-19 news had just broken 2 weeks earlier, and President Trump had just signed The CARES ACT (Coronavirus Aid, Relief, and Economic Security)!  The Triple PPP (Paycheck Protection Program) was the centerpiece of The CARES Act.  I was sitting on the couch thinking about how many businesses will be going under, and concerned about my clients and friends who own businesses?  What about their employees?

I decided The Triple PPP was going to be the most important program of its kind, perhaps in history!  I needed to understand, master, and coach my clients as to how to obtain this critical money from the government.  This program could save my clients, their employees’ jobs, as well as protecting their benefits.  With The Triple PPP, EVERYBODY WINS!

There are numerous problems with The Triple PPP!  Detailed SBA (Small Business Association) loan data shows what many had suspected all along; the money was shared unevenly, with the biggest sums not going to those most in need.  For example, Tom Brady’s company TB12 received more than $960,000.  He was then seen on a new $2m yacht!  More than 600 companies have already received the maximum $10,000,000 in PPP loans. 

The Tom Bradys of the world (yes, I am a Jets fan) have well-paid family-office type advisors with the contacts and the wherewithal to figure out how to “extract” large sums of possibly FREE PPP loan money from the government.  This might never happen again in history!

Where does that leave the regular Joe, small business owners and non-profits?  Where does that leave concerned people that own S Corporations, Sole Props, C Corporations, LLC’s, Partnerships and Non-Profits?

Answer: It leaves the small business owners left out!  Small business is the backbone of The United States!

Without the proper Bank Contacts, CPAs, Financial Advisors, Insurance Advisors, you are on your own.  It is stressful trying to navigate these waters on your own, especially if you are not a finance or “numbers” type of analytical person.  Many advisors have not done the proper research and are not equipped to be giving PPP advice at this time.  Where do you go? 

Wouldn’t it be great if there was someone you know who has access to a FREE VIP service that can:

 A. Help with an easy online enrollment.

 B. Review the application.

 C. Get loans approved.

 D. Trouble shoot when there are errors? 

Keep reading!

When I applied for my S-Corp to get a loan, I found the following roadblocks:

1. Bankers were not well-versed on the process. 
2. Websites were confusing and unclear. 
3. Few CPA’s (Certified Public Accountants) or lawyers had a good handle on it.  It was hard to know whom to trust. 
4. The bigger banks were not interested in 1% loans, many of which would be forgiven at the end.  Why should a big bank care about a 1% loan and dealing with Uncle Sam when they can get 14% interest on our credit card balances? 

I applied to multiple banks and found the smaller banks were much more in tuned with clients and the process.  There was a small bank that did 106,000 loans and outdid the “big banks” with much better service.  Cross River Bank (google-Cross River Bank New York Times Article) ranked 4^th in total loans approved behind Bank of America, JP Morgan/Chase and Wells Fargo. 

I spoke twice as a Triple PPP panel expert for the Queens Chamber of Commerce webinar last October and December.  I received a call after my October Zoom from a man who attended named Neil, who said he enjoyed the presentation, Q&A (question and answer session) and perhaps we could work together.

What I did not know is that Neil (a CPA by trade) was in the lending business and owned a company called Asset Enhancement Solutions (AES), LLC.  Neil had partnered with small banks and set up an easy system for business owners to apply on-line for The Triple PPP, while his staff had the banking relationship to be able to look at the file, make corrections as needed and get them approved.  Neil and his A-TEAM at Asset Enhancement Solutions had completed 800 PPP (totaling over $100M received) applications the last round.  They also helped non-profits, small and large companys and Jake’s 58 casino get their loans approved.

The great news is that my firm has teamed up with the A-Team from AssetEnhancement Solutions LLC and Cross River Bank to enable my clients and you, The Wave and Beachcomber readers, to Apply for FREE seamlessly online.  You can pre-register NOW and get into the queue while their coffers are full!  The service is FREE because AES, Neil’s firm is an agent for the bank and they get compensated by the bank which is why there is no charge to you.

What does this mean for you as a business owner?

1. An easy portal with Cross River Bank to input and upload your documents.
2. A team of 16 will monitor your account and help it get approved.
3. VIP level service that can/will correct mistakes.
4. Loans that were not approved can be reviewed, corrected, and get approved.
5. AES communicates with the lenders and advocates on your behalf.

If you own a business and already received a PPP loan, the rules have changed for “2^nd draws.”  If this is the first loan you are applying, it will be easier this round.  For those interested in this FREE PPP Service, email “SEND ME THE PPP” to me at Rob@InsuranceDoctor.us which will start the process.

Stay Positive, Test Negative and Keep The Faith!

Wishing a “good riddance” to 2020 and welcome to 2021!  Although 2020 was a lost year for many, the Covid-19 Pandemic has re-written spending patterns that should be analyzed and discussed.  There is much to be learned from last year, some of which can benefit us going forward!

Follow these 6 TIPS to improve your finances in 2021 and beyond!

1. Evaluate Your 2020 Spending and Budget: This is the most important matter to take control of.  The best way to address this is to go online and download (or you can order them by phone from your (CC) credit card company) a report of your 2021 spending by category.  I just did this and compared it to 2019.  Spending patterns have changed, and we can control them more easily because “spending less” is now a habit.  Because I am not visiting many clients’ businesses, my auto and transportation expenses have gone way down, as have dry cleaning, restaurants, and travel.  These decreases can be made permanent!
2. Cancel Unneeded Subscriptions:  While you are evaluating your expenditures, take time to look at various subscriptions, memberships, and other accounts, especially those on auto-renew on your credit card.  Consider cutting services you might not be using.  For example, I non-renewed some magazines and let my gym membership expire.  Often, these companies will lower their fees or offer introductory rates to get you back as a new customer!
3. Plan for a Delayed Tax Refund: Many Americans have not built up a proper 6 month’s income emergency fund.  Others have lost their jobs and were forced to spend that emergency money as it was/is an emergency now!  With the government in a transition, the 2020 tax returns might not arrive on time like they have in the past.
4. Invest in Yourself: Now is a good time to take on-line courses, read self-improvement books and work on home improvements to name a few.  These things can make you more marketable, increase your earning power and increase the value of your home.  I also suggest taking the 6-hour on-line New York State defensive driver course which saves you money on your auto insurance for 3 years!
5. Review All of Your Insurance Spending: There has never been a better time to review your total insurance portfolio spending.  People are driving less often, so look at shopping your auto insurance and perhaps adjusting your coverages accordingly.  Life insurance has changed over the past 3 years!  If your life insurance policy is over 3 years old, a review is necessary and important!  There are currently 2 term life insurance companies in New York State that offer their “chronic illness riders” for free, on term insurance.  The chronic illness riders work like a long-term care insurance policy by providing a pool of money to use if long-term care is needed.  You can withdraw a portion of your death benefit, while living, to pay for your long-term care needs.  This is an amazing rider that very few insurance brokers are talking about.  Outside of New York State, (in NJ, CT, PA, and Fla to name a few) those policy riders also include “chronic injury” which can pay off when in an accident.  These new term insurance policies offer fantastic value for the premiums paid.
6. Use Your Calendar and Family or Friends for Support: Write your goals down and communicate them to others (speak them into existence)!  The best thing to do is to start with short-term goals.  Try the month of January, for example.  Covid-19 has in many cases helped us spend less money, so let’s keep this up as things normalize.  Consider getting support around you and have someone else write into their calendar their own goals and schedule a weekly status phone call.  Try teaming up with a coach or friend/family member to hold you accountable for at least the first 21 days until these are habits.

The takeaways here are that Covid-19 in some ways, have forced us to spend less money in many areas.  This is a great time to analyze this and keep these better habits going forward, while things start to improve.   To be added to our monthly e-newsletter list, email ADD ME to Rob@InsuranceDoctor.us and please include your full name.

BE POSITIVE, TEST NEGATIVE, KEEP THE FAITH!

COVID-19 is rapidly changing the world and we must adjust accordingly!  There is a myriad of issues that will come to the surface in the first quarter of 2021.  In addition to the expiring of moratoria and other safeguards, many industries will be cutting and furloughing jobs.  HSBC bank, citing issues between China and the USA announced the elimination of 32,000 jobs and furloughing another 32,000 employees.  The NYPD has had a rash of officers opting to retire.  I anticipate large companies creatively offering early-retirement packages to induce employees to retire. 

A vaccine will not bring these jobs back!

These are the questions pre-retirees should be asking themselves:

1. Am I Ready Psychologically to Retire? Newly retired individuals can begin with feelings of excitement and anticipation only to fall into a morass of depression, anxiety, and restlessness!  When people retire, they can lose their identity.  It is important to develop a new identity as a retiree.  People spend more time planning a vacation than their own retirement!
2. Am I Financially Ready to Retire? The first step here is to “huddle-up” with your advisors and create an anticipated post-employment budget.  The good news here is that work-related expenses such as transportation and dry cleaning should be lower.  Another advantage might be your millennial children (statistics show 50% of millennials are still living with their parents) moving out.  Cash flow could determine if a part-time job is needed.
3. When Should I Take Social Security? This question has to do with your current age and the decision to take a reduced benefit now, versus waiting for the full benefit.  As a great mentor of mine used to say, “The Situation is the Boss!”  The ratio of retirees to workers continues to grow as America ages.  There are 10,000 baby-boomers (born between 1946-1964) who turn 65 every day.  Uncle Sam has “moved the goal-posts” over the years with younger retirees seeing a graduated reduction based on age.  Some people look at how much money they will need for their lifetime.  The biggest fear of seniors is “The Fear of Running Out of Money!”  This is what makes annuities and life insurance such powerful financial tools.  Those that are in poorer health should consider starting sooner, rather than risking dying before collecting their full benefits. 
4. What Do I Do About RMD’s (Required Minimum Distributions)? Did you know that failing to take Required Minimum Distributions from your 401Ks and IRAs (Individual Retirement Accounts) can result in penalties of up to 50%?  Many people are not aware that The Trump Administrations’ “SECURE ACT” changed these rules in 2019.  For decades, retirees had to begin taking distributions or payouts from these accounts at the age of 70 ½.  Now, because of longer life expectancy (and other factors), that rule has been pushed back to age 72.  Some younger retirees should consider looking at a reverse mortgage and waiting on social security and RMD distributions.  The “SECURE ACT” bad news is that the “Stretch” or “Inherited IRA” has been eliminated, so retirees that planned on passing their IRAs down to multi-generations of their family can no longer do so.  This is another reason to start taking money and enjoying your “Golden Years” now!
5. What About Medicare And The Dizzying Supplement Options? Fewer workers are retiring with health insurance benefits.  The biggest benefit (that I can think of) about turning 65 is being able to enroll into Medicare and saving BIG$$$$ on your health insurance by purchasing “Medicare Supplements,” which is a version of subsidized health insurance.  It is not uncommon for a single individual to save between $400-$500/month by enrolling into Medicare Part A, buying Medicare Part B (Prescriptions), and then enrolling into a “Medicare Supplement” policy, some of which are FREE!  These “Medicare Supplement” policy decisions should be made 60 days BEFORE your 65^th birthday! 

I have a team of experts, all with over 20 years of experience, to ensure that you make educated decisions.  For those that are interested, email “PLEASE HELP ME” to Rob@InsuranceDoctor.us. 

Stay Positive, Test Negative!  Keep the Faith!

            With Thanksgiving weekend upon us and Covid-19 out of control, tensions and stress are on the rise!

            President-Elect Joe Biden (refer to my “Bidenomics” column from 2 weeks ago) pledges to raise corporate taxes while also spending more money on free tuition for 2 years of community college for all families who earn under $125,000.   In addition, the possibility of another stimulus package looms.  My clients ask me, where is the money going to come from?  What do you think will happen?  My answer in the short-term is, NOTHING!  Plan as if nothing is going to happen because of “political bickering.” 

There is an old saying, “a penny saved is a penny earned.”  I beg to differ on this point.  If you are in the 20% tax bracket, a penny saved = 1.2 pennies earned, because you need to earn 1.2 cents to net 1 penny saved after taxes. 

            There are many savvy ways to reduce expenses and improve your well-being without sacrificing quality.  Using baking soda (AKA sodium bicarbonate) is one of those ways. 

If you go into your “medicine cabinet,” most people will find brand names such as Crest, Efferdent, Axe, Dove, Tums etc.  Many of these products use baking soda or derivatives like sodium hydrogen carbonate, saleratus or nahcolite, which are all forms of baking soda.  The difference is these “well-marketed” name brand products are adding toxic chemicals and preservatives that are making Americans sick and lighter in the wallet or purse!

            Many families have that familiar small orange box of “Arm & Hammer” baking soda in their refrigerator to mitigate bad odors; however, there are so many other uses for this inexpensive miraculous white powder, that help keep your body healthy and clean.  See my Top 10 baking soda usage list below and start the savings and feel better:

1. Helps Your Kidneys: Kidneys remove waste and excess water from your body.  If you have chronic kidney disease, from diabetes, high blood pressure or other causes, acid can build up in your body.  Sodium bicarbonate can help bring body acid levels down, it can also slow bone loss and build muscle.
2. Fights Cancer: Emergency rooms and hospitals stockpile sodium bicarbonate (AKA baking soda) as a treatment for poisons, cardiac-arrest, and other illnesses.
3. Body Deodorant: Baking soda removes acid or odor molecules, not just in your fridge.  Try either putting some powder under your armpits (if you are ok with white powder residue) in the morning or buy deodorant with sodium bicarbonate as the main ingredient.
4. Soothes and Softens Your Skin: Have you been bitten by mosquitoes or rubbed on poison ivy like I have?  Mix 3-parts baking soda with 1-part water and smear on your skin for 20 minutes before washing it off.  Another alternative is the take a bath with 1-2 cups of baking soda which will also soften your skin. 
5. Kills the Pain: Sodium bicarbonate may boost the pain killing powers of lidocaine which is used for epidurals.  It can also ease sunburn or windburn by mixing 4 tablespoons per quart of water, use a washcloth and dab the infected area.
6. Fights Stomach Acid: Sodium bicarbonate fights the acid that runs from your stomach to your throat and even your mouth after eating.  It can be purchased as inexpensive chewable tablets.
7. Facial Scrub: This one is not for everybody as it can be abrasive.  WebMD suggests “first washing your face with a mild, non-abrasive cleaner,” then “make a paste of 3 parts baking soda to 1-part water. Rub it in carefully in circles for a deep clean, then rinse with water.”
8. Cleans Your Teeth: Baking soda removes plaque which is the sticky film of bacteria in your mouth.  Plaque buildup leads to tarter which can trigger gum disease.  Many people are unaware that your mouth carries the most germs in your body; hence, it is crucial to have good oral hygiene.
9. Clean Your Child’s Toys:  Baking soda is an alternative to harsh chemicals to use to get grime off your baby’s high-chair, trays and toys.  It does not kill germs; however, it can be used with vinegar to work as a disinfectant.
10. Freshens Dentures: As a CSA (Certified Senior Advisor), I know that seniors pay the most money stocking their “medicine cabinets.”  Dissolve 2 teaspoons of baking soda into warm water to loosen food and remove odors from dentures.  This also works for biteplates and mouthguards.

Source: WebMD

Costco sells a 13.5-pound reusable orange bag of Arm & Hammer for under $20.  Give it a try!  For more tips go to www.armandhammer.com.

I welcome your comments and if you want to be added to our monthly e-newsletter (3 articles/1x/month) email ‘Add Me” to Rob@InsuranceDoctor.us. 

Wishing you and your Family a Happy Thanksgiving weekend!

Be Positive, Test Negative, Keep the Faith!