Author Archives: John Kvale CFA, CFP

Confusing Tax Form 5498 Coming to Your Mailbox if any Qualified/IRA Activities

So we all trudged through the two decades of changed tax laws, and for the most part put them behind us … at least until extension filing deadline for some….

Just as we are forgetting about Forms, notifications, and tax documents, here comes one more!

Not to worry!

Form 5498 Reminder2019 Form 5498

The late arriving Tax Form 5498 can be confusing as it arrives seemingly late, but not to worry, its’ purpose is settlement …. Here at the Form 5498 IRS website it is noted as “An Info Copy Only” meaning this form is for our information only and no action is required.

So why does this form arrive so late?

Form 5498 captures movement into IRA/Qualified accounts and since we can contribute to IRA’s until the filing date of this year, they have chosen to have the form reported to them AFTER the regular April filing date to capture as many as possible this year contributions for last year….

Getting into the weeds for a moment as an example, if you roll over a 401k into your IRA Rollover… a Form 5498 will find its way to your mailbox …. not to worry, this seemingly late form settles up with the IRS in crazy accurate fashion one year later…showing them that you did NOT take the funds personally and absolving you of any tax burden.

Bottom line – This seemingly alarmingly late form needs to be tossed in your 2019 Tax File and kept for this years taxes, when we file in April of 2020!

Have a Great “No Alarming Tax Form” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Three Fun Facts from Our Social Security Event – Friday

One week ago tomorrow our Social Security Event occurred, reminding us of just how fast a human being can speak, thank you again Tom Clark – Wow… (Thank goodness for the five recorders we had going)

Yes … last Friday we teased a post coming the next week, today we are going to tease an expectations of 10-15 posts over the summer … as Mr. Clark really outdid himself this year.

Starting off with Disability Benefits, then a deep dive into Retirement benefits and just when we thought we going to be finished, Medicare benefits….

Special Thanks to all that came to share their Saturday morning — So wonderful to see you and great questions during the event!

Three Fun Facts From the Social Security Event

With so much ground covered, it was actually tough picking the fun facts for our teaser… so we are going with what stuck in our minds seemed appropriate… not to worry, there are many more to do along with this….

1. The fastest growing age group is those over 100 years old! (Startling statistic that bodes well for our collective happiness and healthiness, but also important for long term planning!)

2. One in four people will receive Social Security Disability benefits before full retirement – this is down from 30% – we are getting more healthy, but a huge number – Mr. Clark asked us to visualize a Dallas Cowboys game with one fourth of the folks attending the game receiving Disability benefits at some point in their lives!

3. Retirement benefits from Social Security are calculated on your highest 35 years of work, inflated up for inflation, meaning when you were working in your 20’s those earnings get inflation adjusted up at retirement – frequently resulting in a full benefit deposit when you were working early in your career… Most, including ourselves have hear the last four years or something of the like – not true.

One additional item that just came up as this was being written- Let’s call it a Bonus point –

Ten quarters of earnings gets you into the Social Security Benefit Pool, but does nothing beyond that – Wow, we have heard that misstated many times….

Ahhhh…. today is the First Friday in May !

Pat yourself on the back for all you have done and all of those you have influenced – Now go enjoy your weekend, rest, re-charge, and smile to everyone you see this weekend !

John A. Kvale CFA, CFP

DCIM100GOPRO

DCIM100GOPRO

April 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our April 2019 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format as well as Video!

Newbies – We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

April – 2019 Video

Financial Planning Tip (s) –

Source of Funds Entrance Into Capital Markets

Here in this post we discussed the possible ways to most comfortably enter new capital into the Capital Markets.

Super Safe sources of capital may be best suited for an entrance over time, while funds coming from the Capital Markets, may go directly back into the Capital Markets, especially if risk reduction is also part of the allocation.

Over a 5 – 10 year time frame it does not matter, but why twist an ankle in the short term!

Social Security Event – Questions

Wow – all of these great questions were sent to us for our Event this month…. all were answered, if not directly, indirectly.  We look forward to sharing actual audio (Tom speaks very fast and covered a lot of ground) from the event in a multi-part post series over the summer months! DCIM100GOPRO

 

  1. Last time we spoke you were VERY certain Social Security would be there for all of us upon retirement – With all of the changes, do you still feel this way?
  2. Can you explain the divorced verses divorced and remarried benefits?
  3. Have you ever heard of someone being offered a lump sum of retroactive Social Security benefits?
  4. November of 2015 ushered in new laws and changes, are there any neat techniques that survived?
  5. Can you explain non US citizen spousal benefits?
  6. We have been told many of the benefit statements are not always accurate, understating the actual eventual benefit, has this been your experience?
  7. How much can I earn and not receive penalties if I retire before my full retirement age?
  8. The Full Retirement Age keeps being pushed out, will this continue? Is there a schedule?
  9. How long do I have to report my Social Security earnings if they were not reported by an employer?
  10. For many years I did not draw on an ex-spouses earnings by accident – using only my earnings benefit, can I request some sort of look back to get my full benefits?
  11. If want to change my Social Security election decision after I made it and have been drawing benefits, Can I do that?
  12. Do I have to take Social Security Benefits ? What if I do not want to?
  13. Is it better to sign up in person or use the website, or does it matter?
  14. My wife is not a US citizen, does that affect her spousal benefits?
  15. Will Social Security always be there in your opinion?
  16. What percent of people take benefits early, at full retirement age and as late as possible?
  17. I am 65 and working with a good healthcare plan. I wasn’t going to sign up for Medicare until after I retire. However I am told a Medicare Part F; a supplemental plan eliminating deductibles, will not be available after 2019; Should I enroll and sign up for Part F?
  18. I was married for more than 10 years to a high income earner, if I get remarried to my new spouse who is not a high income earner, will I give up benefits?
  19. Have you seen any of the on-line Social Security Optimization Programs? If so, any you like better than others? (From JK)
  20. What are your thoughts about an income based phase out of Social Security in the future? Much like the penalty for W-2 income and having started early Social Benefits ? (From JK)

Capital Market Comments –

Happy Again

After throwing a Hissy Fit near the end of 2018, “Everybody Is Happy” again !

This is a total index chart, note that it has not reached new highs yet, however many other indexes have.

Let’s not forget that we DID have an inverted yield curve which is a great predictor of a pending recession …. only the Shadow knows when! We have our eyes peeled!

4-29-19 Vanguard Total World Index Fund

 

Have a Great Day – Talk to you at the end of May!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Why Source of Funds May Determine Entrance into Capital Markets

Before we jump into this post we know that in 5 to 10 years our starting point hardly matters.

We also know that we’re all human and we like to get off on a good start in anything that we do, especially when it’s dealing with our hard earned capital!

What follows is our belief of the best possible way to get started on good footing, and keep a positive investment allocation.

There are always outliers and unique events – this is a template, and loosely the starting point for funds entering the capital markets … but by no means a written in stone … exact map.

Let’s start with the easypuit-1555653

New investment dollars that came from … say the backyard …  under your sofa … your overfilled emergency fund, or some other super safe and stable asset class . … almost certainly should be work into Capital Markets over time.

Depending on the situation, the amount, the time horizon … the time frame may vary from months to quarters or even longer depending on the situation to gain entrance to the Capital Markets …

A typical scenario would be to divide the time frame into equal parts and allocate over that period of time.

The goal is to take advantage of the ups and downs upon entrance into the Capital Markets ….

Funds such as 401k rollover’s, current investment portfolios that are moving from one pocket to another most certainly do not need this staggered entrance into the capital markets as they were invested already.

An accurate statement can be “If it just came out of the capital markets it can go back into the capital markets” even though it may be cash today.

Here are the gray areas

Of course there are gray areas that need judgment…

A large block of stock options sold. The funds where IN the Capital Markets but depending on the size and the situation, it may not make sense for these funds to be moved directly back into the capital markets all at once.

A sudden liquidity event such as the sale of a business – yes in essence it was in a investment that had volatility similar to the capital markets, but in most cases, risk reduction is desired and a staggered entrance along with a conservative allocation may be the best.

Inheritance..

It all depends on the form?

Some inheritance come in the form of cash … others may come in the form of investments that are already invested – again depending on the situation, it may make sense to stagger entrance, or it may be just fine to  continue the allocation or even re-allocate in one swoop.

Bottom Line, there is no exact way for all situations, but there are ways to go without raising the blood pressure!

Have a Great “Good Entrance Capital Market” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Preview Post … Source of Money Determines How it gets Invested – Friday

For a short week, this seemed like a long one. There are still some tax piles/to do’s working their way down for sure …

Next week we will be doing a Post on the Source of Money and How it gets Invested – yea, this is definitely a bit of a tease, but the post is important and will help explain how to most safely invest different sources of funds…. keep holding your breath please…haha

Tomorrow is our Social Security Event and we are ready to listen, learn and discuss together.. can’t wait!!

Next week we say good bye to April….. WOW!

Ahhhh….but today is a Friday and we will let your eyes and brain rest with a short post! Enjoy your weekend, get ready for a big week next week and remember to spend time with those special in your life!

John A. Kvale CFA, CFP

JK Street Cents Logo

 

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Twenty Social Security Questions From the Field – Pat yourselves on the back, you did well!

So we prodded a bit …

But you guys responded …

We asked and you sent …

Thank You!

GREAT Social Security Questions for our Event this weekend3-20-19 - Invitatation to SS Info Event with Tom Clark_Page_1

Without further ado … here is the final list.. WOW!

  1. Last time we spoke you were VERY certain Social Security would be there for all of us upon retirement – With all of the changes, do you still feel this way?
  2. Can you explain the divorced verses divorced and remarried benefits?
  3. Have you ever heard of someone being offered a lump sum of retroactive Social Security benefits?
  4. November of 2015 ushered in new laws and changes, are there any neat techniques that survived?
  5. Can you explain non US citizen spousal benefits?
  6. We have been told many of the benefit statements are not always accurate, understating the actual eventual benefit, has this been your experience?
  7. How much can I earn and not receive penalties if I retire before my full retirement age?
  8. The Full Retirement Age keeps being pushed out, will this continue? Is there a schedule?
  9. How long do I have to report my Social Security earnings if they were not reported by an employer?
  10. For many years I did not draw on an ex-spouses earnings by accident – using only my earnings benefit, can I request some sort of look back to get my full benefits?
  11. If want to change my Social Security election decision after I made it and have been drawing benefits, Can I do that?
  12. Do I have to take Social Security Benefits ? What if I do not want to?
  13. Is it better to sign up in person or use the website, or does it matter?
  14. My wife is not a US citizen, does that affect her spousal benefits?
  15. Will Social Security always be there in your opinion?
  16. What percent of people take benefits early, at full retirement age and as late as possible?
  17. I am 65 and working with a good healthcare plan. I wasn’t going to sign up for Medicare until after I retire. However I am told a Medicare Part F; a supplemental plan eliminating deductibles, will not be available after 2019; Should I enroll and sign up for Part F?
  18. I was married for more than 10 years to a high income earner, if I get remarried to my new spouse who is not a high income earner, will I give up benefits?
  19. Have you seen any of the on-line Social Security Optimization Programs? If so, any you like better than others? (From JK)
  20. What are your thoughts about an income based phase out of Social Security in the future? Much like the penalty for W-2 income and having started early Social Benefits ? (From JK)

We will be forwarding this to Tom Clark shortly….

Great Work Guys!

Have a Great “Social Security Questions” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Most Cautiously Posted Charts – But TOO Interesting NOT to post – Worlds Biggest Oil Reserves all in One Chart AND Renewable’s Chase for Replacement

With a lot of followers/clients being Oil Experts due to long careers in the Oil Industry (For the record we find the industry wildly interesting!) we are welcoming the feedback as we make the following charts and stats available….

We did not make the chart, our friends at Howmuch.com and the World CIA Facebook (an interesting resource topic for another discussion) are the creators of this one:

Oil Reserves by Chart Size

Here are the actual statistics in legend format –

Rank Country Oil Reserves (Barrels)
#1 🇻🇪 Venezuela 300.9 billion
#2 🇸🇦 Saudi Arabia 266.5 billion
#3 🇨🇦 Canada 169.7 billion
#4 🇮🇷 Iran 158.4 billion
#5 🇮🇶 Iraq 142.5 billion
#6 🇰🇼 Kuwait 101.5 billion
#7 🇦🇪 United Arab Emirates 97.8 billion
#8 🇷🇺 Russia 80.0 billion
#9 🇱🇾 Libya 48.4 billion
#10 🇳🇬 Nigeria 37.1 billion
#11 🇺🇸 United States 36.5 billion
#12 🇰🇿 Kazakhstan 30.0 billion
#13 🇨🇳 China 25.6 billion
#14 🇶🇦 Qatar 25.2 billion
#15 🇧🇷 Brazil 12.7 billion

 

Interesting comments – read between the lines on long term Oil usage…

“There’s little doubt that renewable energy sources will play a strategic role in powering the global economy of the future.
But for now, crude oil is still the undisputed heavyweight champion of the energy world.
In 2018, we consumed more oil than any prior year in history – about 99.3 million barrels per day on a global basis. This number is projected to rise again in 2019 to 100.8 million barrels per day.”

This from an interesting chart, at Visual Capitalist

While headlines as recent as five years ago predicted the end of oil reserves from depletion, the belief now by the smart folks, is that we will move from Oil to renewable long before we run out of oil, making for very interesting company pivots in the future.

Could an insert your favorite energy company be the leader in some type of renewable energy resource?  Not beyond the realm of a reasonable doubt if their long term viability is dependent!

Things we are constantly thinking of for opportunities and loss avoidance!

Hat tip JP!

Have a Great “Energy Informed” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents