There are lots of numbers in the tax code that aren't indexed to inflation. ISTM that automatic (as opposed to manual) inflation adjustments are a fairly new concept, given that the modern tax era (16th Amendment, first 1040) started in 1913. Why, for example, is the IRA catch-up amount fixed at $1,000? The proposed SECURE 2.0 Act (H.R. 2954) would index this figure for inflation, as well as raise the RMD starting age above 72 and a slew of other changes.
Here are some other aspects of this $3000 tax benefit that one might question:
- Why allow a capital loss to offset ordinary income, as opposed to treating the loss as a negative cap gain (i.e. get back 15% in taxes on the $3K instead of, say, 22% in taxes)?
- Why allow individual taxpayers to carry over cap losses indefinitely? (Until 2011, mutual funds could only carry forward cap losses eight years.)
- Why did H.R. 1619, sponsored by Zoe Lofgren in 2001-2002 fail to reach a vote? It would have amended "the Internal Revenue Code to increase, from $3,000 to $8,250, the annual capital loss limit applicable to individuals [and provided] for an annual inflation adjustment."
https://www.congress.gov/bill/107th-congress/house-bill/1619
- Why should one have to hold a security for a full year before treating the gain or loss as long term? Through 1976, the holding period was 6 months, then 9 months in 1977. The Tax Reform Act of 1976 changed not only the holding periods, but the amount of loss carry forward permitted, from $1K in 1976 to $2K in 1977, to its present $3K in 1978.
https://www.everycrsreport.com/reports/98-473.html
These are not rhetorical questions. Virtually every piece of legislation involves horse trading and compromise. One needs to delve into the legislative process to find out what happened. Likely there will be another opportunity in the next couple of months to watch the process in real time, as SECURE Act 2.0 is raised in the lame duck session. Or not.
https://news.bloomberglaw.com/daily-labor-report/landmark-retirement-bills-see-opportunity-in-lame-duck-congress

Not sure these are good ideas
I am also not CPA NOR tax expert
What about creating LLC and defined benefits distribution (if you have small business only family memebers up maxinum tax deferred ~ 250k per yr for husband and 250k for wifey) then roll over to this acct.... Don't really need to sale since may expect rebounds in 12-36 months.
If you don't need these monies then Hold until 64.5 yo. My old advisor from Edward Jones told me to roll it to retirement acct and control your yearly Rmd Outputs once 64.5 yo, take only what you need for living and travel (If you don't need monies then leave it until 64.5 yo) ... Everything is probably paperloss for now if you don't sale. Tax expected very little this year because most portfolio are 20-40% down (unless you are Michael Burry and gained so much this yr w short term trading)
Other options maybe Give to kiddos family think max life time gifts 11 millions limited tax paid but need filed by cpa (know Irs loopholes) but maybe lots headaches + hefty fees
Pls consult w tax advisor and financial advisor before taking actions and play w turbo tax first before choosing wisely.

" complications in bankruptcy or lawsuits."
Federal protection extends only to bankruptcy proceedings, not to creditor lawsuits. To understand this, it helps to see where protections come from.
Protection of money in employer sponsored plans comes from ERISA, which has a virtually ironclad antialienation provision. That means that you cannot pledge or have taken from you any money within the retirement plan for almost any reason.
Protection of rollover money in an IRA comes from the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). As one might gather from its name, this protection applies only if you declare bankruptcy. It doesn't protect IRAs in "regular" creditor lawsuits.
For "lawyerly type" readers, here's a remarkably clear and concise page (just 4 paragraphs plus a couple more sentences) from a law firm saying much the same thing.

Outside of bankruptcy, traditional contributory IRAs and Roth IRAs and inherited IRAs, have protection only under state law.

https://www.rosenblattlawfirm.com/blog-post/creditor-protection-of-retirement-plan-assets/
(The bankruptcy protection applies to all forms of IRAs, not just T-IRAs.)
With respect to keeping rollover money segregated for bankruptcy protection, it may help but it isn't a cure-all. "Rollover IRA" is just a label for convenience. One can add contributory money to a "rollover IRA" without the IRA custodian removing that label. So if a creditor comes after your assets, it might still challenge your assertion that the rollover IRA contains only rollover money.

Another follow up,
https://www.barrons.com/articles/market-losses-reduce-capital-gains-tax-51668037376?mod=past_editions
https://ybbpersonalfinance.proboards.com/thread/362/barron-november-14-2022-2
TAX STRATEGIES. Use tax-loss harvesting (TLH) this year for benefits in future years. Tax-loss CARRYFORWARDS don’t expire and can be used to offset future gains and up to $3,000/yr in ordinary income from net losses. Beware of WASH-SALE rule (to avoid +/- 30 day window for transactions). Use DOUBLE-UP strategy (buy to double position by November 29, sell the older lot on December 30, the last trading day of 2022), OR swap with something SIMILAR but not identical right away (easily possible with so many OEFs and ETFs). REINVESTING may cause small disallowances due to wash-sale, but they don’t spoil the entire TLH; one can also discontinue reinvestments to avoid this issue. With large declines in both stocks and bonds, consider TLH for all types of funds (stocks, bonds, hybrids). If you have losses in CRYPTOS, note that wash-sale rules don’t apply (but the IRS may not like immediate buys/sells). OTHER strategies: Delay/SHIFT income to lower tax years; use annual GIFTS of up to $16K/yr/person (2022), $17K/yr/person (2023) to avoid filing the Form 709 (complicated, but also doable); ROTH CONVERSIONS (immediate tax hit, but withdrawals are tax-free in retirement and no RMDs); CHARITABLE contributions.

https://www.sec.gov/Archives/edgar/data/81443/000091957422006268/d9806843_497.htm
497 1 d9806843_497.htm
AB VALUE FUNDS
-AB All Market Income Portfolio
THE AB PORTFOLIOS
-AB Tax-Managed All Market Income Portfolio
Supplement dated November 4, 2022 to the Summary Prospectuses and Prospectuses (the “Prospectuses”) dated February 28, 2022 for AB All Market Income Portfolio and dated December 1, 2021 for AB Tax-Managed All Market Income Portfolio (the “Portfolios”).
At a meeting of the Board of Directors of AB Cap Fund, Inc. and The AB Portfolios held on November 1-3, 2022, the Board approved the liquidation and termination of the AB All Market Income Portfolio and AB Tax-Managed All Market Income Portfolio, respectively. Effective as of November 3, 2022, the Portfolios have suspended sales of their shares to investors who purchase shares directly from the Portfolios pending the completion of the liquidations and the payment of one or more liquidating distributions to each Portfolio’s shareholders. In the case of sales to certain retirement plans and sales made through retail omnibus platforms, however, the Portfolios will continue to offer their shares. The Portfolios expect to make their liquidating distributions on or shortly after February 3, 2023.
In connection with the liquidation, the imposition of front-end sales charges and distribution and/or service (Rule 12b-1) fees for the Portfolios has been suspended, effective as of November 3, 2022. In addition, contingent deferred sales charges (“CDSCs”) upon redemption of a Portfolio’s shares will be waived. This CDSC waiver will also apply to redemptions of shares of other AB Mutual Funds that are acquired through exchange of a Portfolio’s shares.
Shareholders may redeem shares of the Portfolios, and may exchange shares of the Portfolios for shares of other AB Mutual Funds, until February 1, 2023. Shareholders should be aware that the Portfolios will begin to convert their assets to cash and/or cash equivalents approximately 3-4 weeks before the liquidating distributions are made to shareholders, although the Portfolios may begin immediately to reduce or eliminate the use of derivatives to facilitate an orderly conversion process. After a Portfolio converts its assets to cash, the Portfolio will no longer pursue its stated investment objective or engage in any business activities except for the purposes of winding up its business and affairs, preserving the value of its assets, paying its liabilities, and distributing its remaining assets to shareholders.
This Supplement should be read in conjunction with the Prospectuses for the Portfolios.
You should retain this Supplement with your Prospectus(es) for future reference.
______________________
The [A/B] Logo is a service mark of AllianceBernstein and AllianceBernstein® is a registered trademark used by permission of the owner, AllianceBernstein L.P.

OPTIONS. NOVEMBER 29 (Tuesday) is the last day this year to DOUBLE-UP for tax-loss harvesting (TLH) this year. The doubling up can be by buying a fallen stock or cheaper options by 11/29/22 and then selling the older lot(s) by DECEMBER 30 (Friday), the last trading day of this year. AXP is used as an example. (Alternate is to immediately swap into something similar but not identical) (Tax-losses for individuals don’t expire and can be carried forward for years to offset future gains and up to $3K/yr in ordinary income)
https://www.barrons.com/articles/tax-loss-stocks-options-51667426293?mod=past_editions
LINK1
REVIEW. Wash sale rules don’t apply to CRYPTOS (as they are considered property). Rules may be changed by the Congress in future. (Note – Wash sale disallows loss if a security or its options are traded within +/- 30 days)
ROTH CONVERSIONS are attractive tax-wise when the markets are down; taxes on conversions should be paid from taxable funds. Other benefits of Roth IRAs include no RMDs; TAX-FREE withdrawals in retirement (some limitations apply); tax benefits carry over to INHERITED Roth IRAs but now, most non-spouses must drain the Roth IRA within 10 years (spouses can retitle as their own). Seniors beware of Medicare IRMAA in conversion planning. This is by @LewisBraham.
https://www.barrons.com/articles/roth-ira-conversions-tax-move-51667342555?mod=past_editions
LINK2

@derf
You read what I meant correctly the first time.
Twice I have had a mutual fund company several months later change the price at which I sold their fund, to their advantage I might add.
In 2016 I sold MBXIX in two of our accounts at one price, only to have Schwab and Fidelity later change the price, resulting in less money to us.
Most recently I sold FARIX in both my and my wife's retirement accounts for $9.20 a share on July 15 2022, only to have both Schwab and Fidelity change the price to $9.14 on September 22,2022. They canceled the first trade and put in another at the lower price, resulting in $300 fewer dollars to us.
Schwab was nice enough to send a letter. Fidelity never notified us. I called Schwab and they said that if a mutual fund company tells them a previous price was inaccurate, they accept that number and follow thru, changing the trade.
I posted about the MBXIX when it happened, and have never wanted to do business with Catalyst again. I emailed them but never got a reply. I think I even emailed the SEC.
I assume the change was for the reasons stated above, ie thinly traded securities, but it is amazing that the SEC lets companies do this, rather than making them eat the difference.
Given these examples, and the IOXIX example and IOFIX disaster a year or so ago, I am very leery of investing large sums in funds using "thinly traded" securities.
Of course, with the very broad mandates most funds have now, you hardly know what many mangers are buying.
If anybody else has had this problem, I would like to hear about it. Maybe if enough people complain something will be done

Sounds like all of you are doing the best you can do. One thought I have is to ask the victims if they were approached by a sales person (a.k.a. "financial advisor") and collect information about the sales people. Often these sales people prey on innocent seniors in church settings or retirement facilities. So my suggestion would be to assemble contact info on the sales people who are likely culpable. (I would not recommend trying to contact the individual who sold this to you but rather to provide that information to the SEC, the FBI and your state securities division.) The public need to be educated that many sales people have on goal: to separate customers from their money. I will continue to monitor this board and wish everyone the best in a terrible situation. This case illustrates the need for financial literacy education.

I am loving the higher CD rates--just bought a 6 month CD at 4% and a 9 month CD at 4.25%. I have several other CDs maturing at the end of this calendar year and in the early part of 2023. Owning CDs have allowed me to have a positive Total Return YTD. I am retired, in mid 70s, and I focus on shorter term CDs, which pay a monthly yield, and the predictable yield allows me alot of opportunities for what I want to do with the investments. As far as what I expect in the future, I fully expect another .75% rate increase in November, and possibly another .75% rate increase in December. For 2023, I still expect rate increases, but smaller and less frequently. I fully expect to get 1 year and longer CDs, with interest payments at 5% or more by the end of this calendar year, and I think they will go up closer to 6% in 2023. Since my retirement total return objectives have been 4 to 6% for several years, I find CDs as a no risk opportunity to achieve my retirement performance goals, with minimal stress and risk.

The other issue which he addresses is the price inefficiencies required to build a ladder for less than $500,000
I can't imagine someone with only $100,000 in total retirement savings ( unfortunately there are a lot of Americans in this boat) would find this useful.
Here he is buying two or three bills in some of the rungs. I don't see why you couldn't do every five years for example.

I have 80 year old friends who are 90% equities and are very worried. They are having to seriously reduce expenses of new purchases. Not cutting into food or gas yet, and their house is paid for but he wanted a new boat at $50,000 and he thinks he should hold off.
Even most of the mainstream advisors, before this year, advised "60/40", although there was gradually an increasing tide that recommended cutting equity exposure going into retirement and then slowly adding it back, to avoid having this kinda Bear market arrive in your early retirement

https://www.sec.gov/Archives/edgar/data/1418191/000141304222000878/walthfocusedsupp.htm
497 1 walthfocusedsupp.htm
WALTHAUSEN FUNDS
Walthausen Focused Small Cap Value Fund (WSVIX)
Supplement dated October 20, 2022 to
the Prospectus dated June 1, 2022
The Board of Trustees of Walthausen Funds (the “Board”) has determined based on the recommendation of the investment adviser of the Walthausen Focused Small Cap Value Fund (the “Fund”), that it is in the best interests of the Fund and its shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all outstanding shares on or about November 21, 2022.
Effective at the close of business October 20, 2022, the Fund will not accept any purchases and will no longer pursue its stated investment objectives. The Fund may begin liquidating its portfolio and may invest in cash equivalents such as money market funds until all shares have been redeemed. Any capital gains and ordinary income will be distributed as soon as practicable to shareholders. Shares of the Fund are otherwise not available for purchase.
Prior to November 21, 2022, you may redeem your shares, including reinvested distributions, in accordance with the “Instructions For Selling Fund Shares” section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Dividends and Distributions” and “Taxes” sections in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUNDS PRIOR TO NOVEMBER 21, 2022 WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. IF YOU HAVE QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR DIRECTLY OR THE FUNDS AT 1-888-925-8428.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of a redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement and the existing Prospectus dated June 1, 2022, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated June 1, 2022, have been filed with the Securities and Exchange Commission, are incorporated by reference and can be obtained without charge by calling the calling the Fund at 1-888-925-8428 or by visiting the Fund’s website at www.walthausenfunds.com.

This helped me a lot.
FYI - My account is with Fidelity so it was the source of CUSIP number.
3133ENT26 - it got fully subscribed so couldn't buy today.
So went with cusip - 3134GX4W1 FEDERAL HOME LN MTG CORP MTN 5.75000% 10/27/2027 ('AAA' rated - callable every quarter), invested a small amount.
Plan is to collect 1.875 % every 3 months till maturity or called earlier.
Purchase is in retirement account so it will fund my withdrawal.
I have been buying CDs - 1 month - riding the interest rate increases - started with 1.75 to now 3.015, may go for higher maturity when dust settles (Central banks pause).
I don't plan to open account with any other entity (bank or brokerage) - just Fidelity is fine for me now.
Now going to hunt for Treasury bills/notes - shorted duration - to build up the bond ladder, will post what I do and/or ask Q.
Thanks a lot to everyone.
D
Edit - corrected the % above - 1.875 (Thanks Graust).

Fellas, fellas...the original point was how wacked out the market is due to many reasons, some of which are crazy monetary and fiscal policy...which helped to enable cray cray funds like ARKK and many of those who do not have pensions have to "invest" in this stock market dreck/risky casino to fund their retirement while those with gov't pensions do not.
Not to disparage those who have earned the pensions. A deal is a deal. No questions, I'm sure many have worked hard and served the public to earn them. But why is it they are guaranteed, many inflation indexed, no mattter what the markets do of which they are invested in and if the underlying investments underperform the taxpayer has to pony up, funding is cut for other public projects just to fund the pensions...is that the right thing to do?
My belief is that the pension returns should be indexed to say the past 3 years rolling returns. I do not think is right that the taxpayer has to be on the hook no matter what happens in the market. Or let ALL workers participate in a national pension, why just if you were say a politician for 25 years?
What really sticks in my craw is when those with the gov't pensions from a high tax state move right after they retire because "they don't want to pay the high taxes".
Baseball Fan

- “And now those of us who don't suckle of the teet of the public tax payer with a pension have to fund our retirement in this piece of sheet casino?”
- “Please! I think the appropriate terminology is "feeding from the trough"
This sounds a lot like some of the stuff I’ve read in the IBD or editorial pages of the WSJ - though worded in somewhat less offensive language. Generally it’s associated with Democrats. But it can be partisan without reference to particular political party. My plea was to try and keep partisan politics out of discussions - especially threads I initiate. But I don’t run the board. So feel free to post anything you desire!

And now those of us who don't suckle of the teet of the public tax payer with a pension have to fund our retirement in this piece of sheet casino?
Baseball Fan

Please! I think the appropriate terminology is "feeding from the trough"

While not mentioned in this Barron's issue or supplement, one can use multi-asset funds that mix stocks-bonds-alternatives. Examples are FMSDX, VPGDX, etc. They have also been hit but the hit has been several % points less than conventional moderate-allocation funds.
Info is also posted elsewhere on 2 common SV funds within the workplace retirement plans, TIAA Traditional (there is an alphabet soup within - RC, RA/GRA, RCP, SRA/GSRA, special TIAA IRAs, etc) and Federal TSP G Fund. Many fund families also offer less interesting SVs within 401k/403b.

@Baseball_Fan, Wade Pfau, Princeton PhD, is professor at American College
https://www.theamericancollege.edu/our-people/faculty/wade-pfau
American College offers degree and certification programs for financial professionals. It is tied to financial industry but is not a sales organization for any insurance/annuity company.
https://www.theamericancollege.edu/designations-degrees
If one needs retirement income for lifetime, the most basic product is single-premium immediate annuity (SPIA). One can get quotes from online quote services. Keep in mind that SPIA give quotes for payouts that are interest plus part of your principal, but when you buy SPIA, you do give up the principal.
There are also expensive annuities that have GMWB/GLWB income riders that allow you to tap the principal.

Just got this little booger via email from TRP. Their findings show that 7 of 10 in retirement are still possessed of a saver's mentality----- willing to adjust their withdrawals if needed in order to be prudent. (I suppose what's unstated here is that most retirees are not wealthy. If they were rich, they'd not worry about this stuff at all, eh?) TRP offers a little test. Where do YOU fall on the continuum?
https://www.troweprice.com/personal-investing/resources/insights/spenders-vs-savers-how-to-determine-your-retirement-spending-personality.html?cid=PI_Single_Topic_NonSubscriber_RET_EM_202210&bid=1099700455&PlacementGUID=em_PI_PI_Single_Topic_EM_NonSubscriber_202210-PI_Single_Topic_NonSubscriber_RET_EM_202210_20221006&b2c-uber=u.C70CEE71-16A5-E6FF-FF67-9E86F48AE56B

MAGI calculation for IRMAA includes only the taxable portion of Social Security. The entire amount of SS is included in other MAGI calculations, e.g. for Medicaid. Below is the major part (but not all) of a table from a Congressional Research Report showing MAGI calculations for IRMAA and other health related programs.

https://sgp.fas.org/crs/misc/R43861.pdf
Reducing income to just what one needs is letting the tail wag the dog. If I have $1M in cash, which is better:
- Buying 3 month T-bills generating $30K (annualized) in taxable income and increasing my Medicare Part B premium by less than $1K, or
- reducing this unneeded income to zero (and saving with lower income taxes and lower Medicare premiums) by keeping that cash in a non-interest-bearing checking account?
Note that I've taken risk out of the equation by using short term Treasuries.
Just as one optimizes taxes by smoothing income before retirement (e.g. by shifting deductions such as contributions and property taxes from one year to the subsequent or previous year), the idea in retirement is to smooth income in retirement, rather than reduce it. That's where incremental Roth conversions help.
Optimal in many circumstances can be putting money, to the extent allowed, into HSAs. Unlike Roth contributions, HSA contributions are not taxable. With the exception of a few states, earnings while in HSA accounts are not taxed.
SS income is included for IRMMA calc. So, if a surviving spouse claims SS based on higher benefits earned by deceased spouse, that could increase Part B premiums.
The effect is the same regardless of whether the higher benefits come from the deceased spouse or from the surviving spouse. Pre-death, the taxes don't depend on which spouse had the higher benefits (assuming MFJ - income is combined). Post death, the surviving spouse receives the higher benefit regardless of whether that comes from the deceased spouse or the surviving spouse.
Moving from a higher State income tax to a no to low State income tax State in retirement is another good way to keep more of what you worked so hard for during your working life.
Often not. There's much more to the calculation than state income tax rates. An excellent, very long piece on the Kitces site (I've read much but not all of it) discusses several different factors and how the situation depends not only on income tax rates, but on the mix of income sources, on the level of income, etc.
https://www.kitces.com/blog/state-income-tax-retirees-top-marginal-rates-social-security-pension-income-age-exemptions/
One example from that page to illustrate this:

Example 4: James and Dolly Madison anticipate that they will each receive $18,000 of Social Security income and $19,500 of qualified-plan income during retirement, for a combined total income of $75,000 each year.
With their retirement income mix, the Madisons would have an estimated $0 state tax bill in 24 states! Notably, this list includes Illinois, New Jersey, and New York, states commonly thought of as high-tax states.