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Are the voters more clueless than the politicians? August 10, 2014

Posted by forwardfinancialplanning1 in Income Taxes, State Income Taxes.
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It’s usually pretty difficult to defend anything that takes place in Springfield, Illinois but we just came across one that suggests that the politicos are merely manifesting the ignorance of their electorate. According to a survey by Capitol Fax, barely one third of Illinois residents 65 and older know that their pensions, Social Security payments and retirement plan distributions are not taxed by the state of Illinois. Just over 50% believed their retirement income was being taxed and of that half, 83% said their state income taxes were “too high.”

With the state’s “temporary” tax increase (to 5%) on everyone else’s income slated to sunset on December 31, 2014, it looks like the Springfield gang will have a hard time attracting support for an extension from the senior crowd. If 0% is judged too high, it’s going to be impossible to torture the math enough to create something acceptable to this voting bloc.

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“You can’t fix stupid….” August 7, 2014

Posted by forwardfinancialplanning1 in 401k plans, Financial Planning, Retirement Savings, Retirement Spending, Roth IRA, Social Security, Traditional IRA.
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I’ve heard people mutter these words many times over the years, but always felt that they were a bit too fatalistic. After all, everyone has the capacity to learn, although the inclination and motivation to do so may be lacking. However, after reviewing a section of the Federal Reserve’s Report on the Economic Well-Being of the U.S., I’m starting to think there’s some truth to such a cynical adage. When asked how they and their spouse will pay for expenses in retirement, an incredible one quarter of all respondents and 14% of those aged 45 and greater chose the answer, “I don’t know.”

I mean, at least they could have said, “winning the lottery……”