Max contribution
Power up tax-free account
Retire with more wealth
Power up tax-free account
Retire with more wealth
Showing posts with label retirement. Show all posts
Showing posts with label retirement. Show all posts
Friday, January 01, 2016
Maxing Out 2016 IRA Contributions
The first financial decision I made in the new year was to make the maximum allowed contribution to my traditional IRA. The IRS contribution limit for 2016 is $5500. I always have more than enough cash at the end of one year to ensure I can contribute the maximum amount at the start of the new year. The IRS did not make any COLA increases in any tax-advantaged retirement accounts for 2016. Our tax authorities must think inflation does not exist, echoing the Federal Reserve's narrative.
The lack of statistical evidence for inflation is deliberate government policy. Shadow Government Statistics notes how government agencies massage their numbers to minimize entitlement payouts. Contributing assets to a tax-advantaged retirement account is a necessary but insufficient condition for building wealth. Holding the right kinds of assets in a retirement account matters during periods of high inflation. Hard assets protect wealth during inflation.
Many Americans don't even have retirement accounts, and some of the ones who do won't find ways to make the largest possible contributions. One need not hire an elite "income protection service" catering to billionaires to prepare their retirement assets for safety. Everyone who doesn't splurge during holiday shopping can save cash meant for their IRA in the new year. Anyone can find publicly traded securities for hard assets that will fit in an IRA. Structural modifications making the account "self-directed" are expensive, unnecessary, and legally questionable. The simplest, cheapest solutions are already at hand.
The lack of statistical evidence for inflation is deliberate government policy. Shadow Government Statistics notes how government agencies massage their numbers to minimize entitlement payouts. Contributing assets to a tax-advantaged retirement account is a necessary but insufficient condition for building wealth. Holding the right kinds of assets in a retirement account matters during periods of high inflation. Hard assets protect wealth during inflation.
Many Americans don't even have retirement accounts, and some of the ones who do won't find ways to make the largest possible contributions. One need not hire an elite "income protection service" catering to billionaires to prepare their retirement assets for safety. Everyone who doesn't splurge during holiday shopping can save cash meant for their IRA in the new year. Anyone can find publicly traded securities for hard assets that will fit in an IRA. Structural modifications making the account "self-directed" are expensive, unnecessary, and legally questionable. The simplest, cheapest solutions are already at hand.
Sunday, August 24, 2014
The Limerick of Finance for 08/24/14
People can't afford to retire
When their financial straits are too dire
Those who refused to save
Dug themselves a nice grave
It's too late to pull out of that fire
Thursday, January 30, 2014
Government MyRA Account Debuts For Beginning Investors
The US government-sponsored "MyRA" is the newest kid on the block in the universe of retirement savings accounts. It doesn't appear to be all that impressive at first glance, but it might make a difference for people who otherwise would have nothing. We only have media coverage of the basics at the moment, so the government should explain its full details on an official website.
The MyRA is certainly not some kind of attempt at confiscation. Sovereign Man's "Simon Black" and other fringe finance sources pushing this line need to calm down. It does not direct existing IRAs of 401(k)s to reinvest assets exclusively in government bonds. It does not even appear to be mandatory. The MyRA is a new mechanism independent of those accounts.
Account minimums tell us everything about the target market. A MyRA account minimum of $25 and monthly paycheck contributions of $5 are barely condiments on a nothing-burger. Putting five bucks a month into an account seeded with $25 gives an investor $85 at the end of the year. Setting the maximum size for the MyRA at $15,000 is hilarious. Someone saving $60 per year is not going to accumulate $15K over a lifetime with interest rates on new Treasury bond issues in the low single digits. The power of compounding that Warren Buffet likes works best when you have significant amounts to compound. If you don't believe me, do the math yourself. I used the SEC's compound interest calculator at Investor.gov to figure this out. I typed in $25 for the current principal, $5 for the monthly addition, 30 years to grow, and assumed a more normal interest rate of 5% compounding at one time per year. I got an ending value of $4,094.38. That's what I think a MyRA investor can reasonably expect from no-fee government bonds. It's not much to those of us who won the intellect lottery at birth but to your average burger-flipper it must look like a king's ransom. Try living off a four-figure sum in retirement. The MyRA won't be enough to bring retirement security on its own, even for investors putting in enough to get the compounded amount to $15K in their lifetimes.
The product available to MyRA investors is likely to be the G-Fund from the Thrift Savings Plan. The amounts investors may contribute are too small to buy a whole bond outright, even if the bonds are packaged as "R-bonds" designed specifically for retirement accounts. There's nothing wrong with using an existing product as an expedient way to get Americans to plan for retirement. It is consistent with the adoption of low-cost superannuation-type funds as the preferred approach for retirement reform in America. The biggest risk for investors in a concentrated government bond position is of course inflation but the MyRA target audience won't understand this risk. Americans who bought war bonds during World War II experienced sustained postwar inflation that severely harmed the value of those investments. That worked out fine for the Federal Reserve as it helped the US government reduce its debt repayment burden by sustaining inflation. MyRA's G-Fund investors will not be sufficiently diversified to endure future inflation unless they also have conventional IRAs invested in equities or hard assets. Good luck getting that message out, Uncle Sam.
Any education effort aimed at MyRA's target audience of investors will probably be a waste. People will forget they have these accounts because the amounts are so small. The concept of retirement savings is an abstraction for people living paycheck to paycheck. It's the same problem I identified when I recently discussed the unbanked population. I would prefer to see the MyRA somehow joined to a public option bank in each state. I suspect that the target demographic of MyRA investors is the same audience heavily dependent on unemployment benefits and other forms of public assistance. Collecting all of these transactions under one roof in a public option bank provides a platform for the delivery of financial literacy training. Low-income, low-information people won't pay attention to education without incentives. "Come get your EBT card recharged at the public bank, and don't forget to start your MyRA payroll deduction."
This new approach is aimed at low-information voters who are probably incapable of understanding the concepts of dollar-cost averaging, portfolio diversification, and full contributions that trigger employer matching in 401(k)s. Any American worker who isn't covered by an employer's 401(k) at work has always been free to set up an IRA at any brokerage or bank. That lesson is lost on Americans who earn little and don't understand finance. The government should play a role in helping that population become self-sufficient and MyRA is a good try at a solution. It's like an IRA with training wheels for beginning investors who need habituation to deferred gratification before they can graduate to more complex IRAs. Uncle Sam needs to put me in charge of this thing so I can graft it onto public banks.
The MyRA is certainly not some kind of attempt at confiscation. Sovereign Man's "Simon Black" and other fringe finance sources pushing this line need to calm down. It does not direct existing IRAs of 401(k)s to reinvest assets exclusively in government bonds. It does not even appear to be mandatory. The MyRA is a new mechanism independent of those accounts.
Account minimums tell us everything about the target market. A MyRA account minimum of $25 and monthly paycheck contributions of $5 are barely condiments on a nothing-burger. Putting five bucks a month into an account seeded with $25 gives an investor $85 at the end of the year. Setting the maximum size for the MyRA at $15,000 is hilarious. Someone saving $60 per year is not going to accumulate $15K over a lifetime with interest rates on new Treasury bond issues in the low single digits. The power of compounding that Warren Buffet likes works best when you have significant amounts to compound. If you don't believe me, do the math yourself. I used the SEC's compound interest calculator at Investor.gov to figure this out. I typed in $25 for the current principal, $5 for the monthly addition, 30 years to grow, and assumed a more normal interest rate of 5% compounding at one time per year. I got an ending value of $4,094.38. That's what I think a MyRA investor can reasonably expect from no-fee government bonds. It's not much to those of us who won the intellect lottery at birth but to your average burger-flipper it must look like a king's ransom. Try living off a four-figure sum in retirement. The MyRA won't be enough to bring retirement security on its own, even for investors putting in enough to get the compounded amount to $15K in their lifetimes.
The product available to MyRA investors is likely to be the G-Fund from the Thrift Savings Plan. The amounts investors may contribute are too small to buy a whole bond outright, even if the bonds are packaged as "R-bonds" designed specifically for retirement accounts. There's nothing wrong with using an existing product as an expedient way to get Americans to plan for retirement. It is consistent with the adoption of low-cost superannuation-type funds as the preferred approach for retirement reform in America. The biggest risk for investors in a concentrated government bond position is of course inflation but the MyRA target audience won't understand this risk. Americans who bought war bonds during World War II experienced sustained postwar inflation that severely harmed the value of those investments. That worked out fine for the Federal Reserve as it helped the US government reduce its debt repayment burden by sustaining inflation. MyRA's G-Fund investors will not be sufficiently diversified to endure future inflation unless they also have conventional IRAs invested in equities or hard assets. Good luck getting that message out, Uncle Sam.
Any education effort aimed at MyRA's target audience of investors will probably be a waste. People will forget they have these accounts because the amounts are so small. The concept of retirement savings is an abstraction for people living paycheck to paycheck. It's the same problem I identified when I recently discussed the unbanked population. I would prefer to see the MyRA somehow joined to a public option bank in each state. I suspect that the target demographic of MyRA investors is the same audience heavily dependent on unemployment benefits and other forms of public assistance. Collecting all of these transactions under one roof in a public option bank provides a platform for the delivery of financial literacy training. Low-income, low-information people won't pay attention to education without incentives. "Come get your EBT card recharged at the public bank, and don't forget to start your MyRA payroll deduction."
This new approach is aimed at low-information voters who are probably incapable of understanding the concepts of dollar-cost averaging, portfolio diversification, and full contributions that trigger employer matching in 401(k)s. Any American worker who isn't covered by an employer's 401(k) at work has always been free to set up an IRA at any brokerage or bank. That lesson is lost on Americans who earn little and don't understand finance. The government should play a role in helping that population become self-sufficient and MyRA is a good try at a solution. It's like an IRA with training wheels for beginning investors who need habituation to deferred gratification before they can graduate to more complex IRAs. Uncle Sam needs to put me in charge of this thing so I can graft it onto public banks.
Wednesday, January 01, 2014
Starting New Year With Max IRA Contribution for 2014
I started my new year off right by making the maximum possible contribution to my IRA today. That's $5500 according to the IRS, same as last year. This will enable me to defer more capital gains on my investments until my elderly years. I'm a firm believer in using every legal mechanism possible to enhance my own wealth.
I have considered the possibility that the federal government may confiscate tax-advantaged retirement accounts or mandate their investment into government bonds. I do not believe an outright confiscation is possible as long as the financial sector makes heavy campaign contributions to federal politicians. There is a small possibility that the government could direct IRAs and 401(k)s to buy government bonds but I believe that is unlikely. I do not listen to nutcase talk radio or read radical blogs that get whipped up over paranoia. There is little need to force individual investors to buy bonds now that the Fed has proven itself able to purchase almost all new Treasury issuance. This does not excuse the Fed of its irresponsible QE policy. It does mean that investors will likely retain their retirement accounts as vehicles for hedging inflation with hard assets.
I don't make New Year's resolutions. Alfidi Capital will continue doing what it has always been doing since 2008. I will keep telling the truth and making money.
I have considered the possibility that the federal government may confiscate tax-advantaged retirement accounts or mandate their investment into government bonds. I do not believe an outright confiscation is possible as long as the financial sector makes heavy campaign contributions to federal politicians. There is a small possibility that the government could direct IRAs and 401(k)s to buy government bonds but I believe that is unlikely. I do not listen to nutcase talk radio or read radical blogs that get whipped up over paranoia. There is little need to force individual investors to buy bonds now that the Fed has proven itself able to purchase almost all new Treasury issuance. This does not excuse the Fed of its irresponsible QE policy. It does mean that investors will likely retain their retirement accounts as vehicles for hedging inflation with hard assets.
I don't make New Year's resolutions. Alfidi Capital will continue doing what it has always been doing since 2008. I will keep telling the truth and making money.
Tuesday, December 31, 2013
IRA Rollovers and 401(k) Problems
FINRA is warning financial advisers in Regulatory Notice 13-45 that they need to remember their fiduciary duties when discussing IRA rollovers with clients. I have no such fiduciary duties with anyone so I can discuss this subject from all angles. The regulatory notice reminds advisers that products in a 401(k) may be more appropriate for a client's goals and risk tolerance than products available in an IRA. I'm reminded of target date funds that automatically adjust portfolios as clients age, and those funds may not be available outside of a 401(k). Positioning clients to accept comparable arrangements with products in IRAs may harm their best interests if management fees and transaction costs would increase.
FINRA's regulatory workarounds preserve the independence of retirement plan sponsors who offer diverse options within 401(k)s. The remaining problems for 401(k) investors go beyond the choice of whether to rollover assets into other retirement accounts. I can think of quite a few problems off the top of my head, based on years of studying finance.
A 401(k) contains a lot of actively managed products. Actively managed funds carry more fees and tend to underperform passively managed products (i.e., indexed funds). Even target date funds contain actively managed funds, layering another set of fees on top of the active managers' fees. This Yale study by Ian Ayres and Quinn Curtis shows how active management and plan fees hurt 401(k) investors.
Multiple 401(k) options confuse investors. Plan sponsors do not all perform thorough educational roles for their plan participants. The best education is probably oriented toward construction of simple plans to avoid overwhelming low-information investors with poor choices. It is unfortunate to see plan sponsors mimic brokerages by stuffing flavor-of-the-year mutual funds into 401(k) choices but that's what they are allowed to do to entice interest from their participating employees.
Investors borrow from 401(k) accounts. Allowing investors to borrow from their own retirement accounts is IMHO one of the dumbest loopholes in American tax law. Those loans must be repaid with interest to ensure the investor catches up to where their retirement account balance should be if they had never taken out a loan. Oh BTW, the interest on a 401(k) loan is NOT entitled to the same tax deductibility as a home mortgage loan, so it's a pretty stupid way to fund a home purchase for people who don't qualify for a mortgage.
I would much prefer that the US scrap its entire tax-advantaged retirement system and start over from scratch. The replacement regime should be very simple. It should NOT at all resemble Theresa Ghilarducci's Guaranteed Retirement Account plan. I've criticized that idea before because it's just another way of funding persistent federal budget deficits. Investors forced to accept such a plan will eventually be prohibited from investing in anything other than government bonds. Those bonds will eventually pay below-market interest rates and will lose purchasing power after inflation.
My preferred solution would resemble Australia's superannuation accounts system. A simple system would be the best system. Investors would be able to put as much of their income as they like into one tax-advantaged account with exactly one product: a target date fund. The fund would be structured like the federal government's Thrift Savings Plan and contain only index funds to minimize fees. Limiting the number of fund components to a handful would still allow for allocations to equities, fixed income, and hard assets (and I'll include real estate and infrastructure among hard assets). Investors would be prohibited from taking out loans from their superannuation account. My plan has exactly zero chance of ever being enacted in America because it's too easy to understand. The national political climate favors complicated solutions that are amenable to financial sector lobbying. The plan would also completely replace Social Security because it could not be used as an entitlement program or as an accounting gimmick to mask deficit spending. That definitely isn't going to fly in Washington, DC. We'll just have to watch our government's entitlement programs collapse during hyperinflation before we see real reform.
I was a financial adviser years ago, and I was very circumspect when I discussed the characteristics of an IRA rollover with prospective clients. I outlined the advantages, disadvantages, and consequences for their particular situations. That's precisely why no one wanted to entrust an IRA rollover to my care. Sharing my knowledge and concern really turned people off. Human beings won't listen to detailed descriptions of consequences. They prefer the excitement of wish fulfillment and will trust liars who promise the moon. Financial advisers who "succeed" in obtaining business from investors doing rollovers are likely to ignore details and lie about consequences; they are human and they pitch to humans. They tend to use action words like "must, should, ought" to manipulate a prospect into thinking there is only one choice. This is why I have contempt for most financial advisers and most individual investors. I find manipulation to be disgusting and I believe FINRA would agree with me.
Nota bene: Nothing I wrote here constitutes investment advice. I need to state that clearly in case a bunch of idiots claim I give financial or investment advice. I do no such thing. I don't give advice because I don't give a hoot what other people do with their money.
FINRA's regulatory workarounds preserve the independence of retirement plan sponsors who offer diverse options within 401(k)s. The remaining problems for 401(k) investors go beyond the choice of whether to rollover assets into other retirement accounts. I can think of quite a few problems off the top of my head, based on years of studying finance.
A 401(k) contains a lot of actively managed products. Actively managed funds carry more fees and tend to underperform passively managed products (i.e., indexed funds). Even target date funds contain actively managed funds, layering another set of fees on top of the active managers' fees. This Yale study by Ian Ayres and Quinn Curtis shows how active management and plan fees hurt 401(k) investors.
Multiple 401(k) options confuse investors. Plan sponsors do not all perform thorough educational roles for their plan participants. The best education is probably oriented toward construction of simple plans to avoid overwhelming low-information investors with poor choices. It is unfortunate to see plan sponsors mimic brokerages by stuffing flavor-of-the-year mutual funds into 401(k) choices but that's what they are allowed to do to entice interest from their participating employees.
Investors borrow from 401(k) accounts. Allowing investors to borrow from their own retirement accounts is IMHO one of the dumbest loopholes in American tax law. Those loans must be repaid with interest to ensure the investor catches up to where their retirement account balance should be if they had never taken out a loan. Oh BTW, the interest on a 401(k) loan is NOT entitled to the same tax deductibility as a home mortgage loan, so it's a pretty stupid way to fund a home purchase for people who don't qualify for a mortgage.
I would much prefer that the US scrap its entire tax-advantaged retirement system and start over from scratch. The replacement regime should be very simple. It should NOT at all resemble Theresa Ghilarducci's Guaranteed Retirement Account plan. I've criticized that idea before because it's just another way of funding persistent federal budget deficits. Investors forced to accept such a plan will eventually be prohibited from investing in anything other than government bonds. Those bonds will eventually pay below-market interest rates and will lose purchasing power after inflation.
My preferred solution would resemble Australia's superannuation accounts system. A simple system would be the best system. Investors would be able to put as much of their income as they like into one tax-advantaged account with exactly one product: a target date fund. The fund would be structured like the federal government's Thrift Savings Plan and contain only index funds to minimize fees. Limiting the number of fund components to a handful would still allow for allocations to equities, fixed income, and hard assets (and I'll include real estate and infrastructure among hard assets). Investors would be prohibited from taking out loans from their superannuation account. My plan has exactly zero chance of ever being enacted in America because it's too easy to understand. The national political climate favors complicated solutions that are amenable to financial sector lobbying. The plan would also completely replace Social Security because it could not be used as an entitlement program or as an accounting gimmick to mask deficit spending. That definitely isn't going to fly in Washington, DC. We'll just have to watch our government's entitlement programs collapse during hyperinflation before we see real reform.
I was a financial adviser years ago, and I was very circumspect when I discussed the characteristics of an IRA rollover with prospective clients. I outlined the advantages, disadvantages, and consequences for their particular situations. That's precisely why no one wanted to entrust an IRA rollover to my care. Sharing my knowledge and concern really turned people off. Human beings won't listen to detailed descriptions of consequences. They prefer the excitement of wish fulfillment and will trust liars who promise the moon. Financial advisers who "succeed" in obtaining business from investors doing rollovers are likely to ignore details and lie about consequences; they are human and they pitch to humans. They tend to use action words like "must, should, ought" to manipulate a prospect into thinking there is only one choice. This is why I have contempt for most financial advisers and most individual investors. I find manipulation to be disgusting and I believe FINRA would agree with me.
Nota bene: Nothing I wrote here constitutes investment advice. I need to state that clearly in case a bunch of idiots claim I give financial or investment advice. I do no such thing. I don't give advice because I don't give a hoot what other people do with their money.
Sunday, November 03, 2013
Helping Little Old Ladies Isn't My Calling In Life
I was on my way to lunch yesterday prior to the start of a conference on China's financial reform. I passed by a very elderly woman being helped by a not-so-elderly man. She was stooped over and moving very slowly, even for an old lady. I asked the guy if she was alright, and he said yes. Then he had the nerve to ask me if I could help him walk her down the street. I said no thanks, as I was only concerned about whether she needed medical attention.
This little episode made me think briefly about my duties to my fellow human beings. I am willing to go out of my way in emergencies to save human life in extremis, but I do not owe a duty of permanent care to random strangers. Unfortunately, our entitlement-laden culture has become so enamored with passing the buck of personal responsibility that the elderly are now at their apogee of greed and selfishness. Medicare isn't an insurance program, it's a transfer of wealth from current workers to current retirees. Many of the Boobus Americanus genus don't understand that fact. They want someone else to pay their bills for medical care. The dude on the street helping his grandma or whatever the heck she was wanted me to do his job for him. He can stick it where the sun doesn't shine.
My alarm bells go off when I see someone struggling or in obvious physical pain. If the person's caregiver tells me they're okay from a medical standpoint, my concern ends and I resume my life. People who think I assume an additional burden of care by making a random inquiry need to get their entitled heads out of their hindquarters. Yes, little old ladies and their able-bodied guardians, I'm talking about you. I don't owe you precious time out of my personal schedule to do things your caregivers find inconvenient. Helping you walk down the street isn't my calling in life nor is it my personal responsibility. My lunch, my conference, my career, my money, and my life are more important than your caregiver's inability to do their job.
This little episode made me think briefly about my duties to my fellow human beings. I am willing to go out of my way in emergencies to save human life in extremis, but I do not owe a duty of permanent care to random strangers. Unfortunately, our entitlement-laden culture has become so enamored with passing the buck of personal responsibility that the elderly are now at their apogee of greed and selfishness. Medicare isn't an insurance program, it's a transfer of wealth from current workers to current retirees. Many of the Boobus Americanus genus don't understand that fact. They want someone else to pay their bills for medical care. The dude on the street helping his grandma or whatever the heck she was wanted me to do his job for him. He can stick it where the sun doesn't shine.
My alarm bells go off when I see someone struggling or in obvious physical pain. If the person's caregiver tells me they're okay from a medical standpoint, my concern ends and I resume my life. People who think I assume an additional burden of care by making a random inquiry need to get their entitled heads out of their hindquarters. Yes, little old ladies and their able-bodied guardians, I'm talking about you. I don't owe you precious time out of my personal schedule to do things your caregivers find inconvenient. Helping you walk down the street isn't my calling in life nor is it my personal responsibility. My lunch, my conference, my career, my money, and my life are more important than your caregiver's inability to do their job.
Sunday, August 25, 2013
Use And Abuse Of Qualified Retirement Plans
Qualified retirement plans can be a minefield for people who intend to use them for something other than accumulate assets for retirement. I've lately listened to pitch artists who claim that setting up a QRP enables a beneficiary to invest in things that are normally prohibited from an IRA or other type of self-directed individual account. Well, folks, some things don't belong in personal retirement accounts for really good reasons.
Assets like precious metals, collectibles, real estate, tax lien certificates, and tax deed properties are encumbered with special risks that make them unsuitable for IRAs. Those products are illiquid and have other qualifications that make them difficult to value. Real estate investors already have vehicles like 1031 exchanges to defer their capital gains from real estate deals, so using a QRP to dabble in real estate is overkill. Policymakers designed IRAs to accommodate stocks, bonds, and their highly tradable proxies (index funds, etc.). The intent of the law is to allow the power of compounding, periodic rebalancing, and the reinvestment of dividends and interest to build an IRA investor's wealth over several decades. Tax regulations deliberately exclude exotic and illiquid instruments from IRAs precisely because of their difficulties.
Legal loopholes allow QRPs to invest in such illiquid things because regulators presume that QRPs are sponsored by institutions. The IRS requirements for a QRP are extensive, presumably because corporate sponsors have the resources to manage their administration. Those institutions are further presumed to be sophisticated enough and liquid enough to invest some small portion of their QRP holdings in illiquid things. Structuring a QRP for an individual investor strikes me as a greedy way to fit some securities vendor's illiquid pet projects into a retirement account that wasn't designed to hold them.
The IRS has plenty of guidelines for setting up retirement plans and accounts. Most individual investors are probably just fine with an employer's QRP-administered 401(k) account, along with a traditional IRA. I personally use an IRA because that's all I need as an individual with no corporate plan sponsor. I am not about to spend untold amounts on legal fees and regulatory filings just to pretend I need a QRP in the eyes of the law. I believe the law should frown upon those who abuse QRP loopholes.
Assets like precious metals, collectibles, real estate, tax lien certificates, and tax deed properties are encumbered with special risks that make them unsuitable for IRAs. Those products are illiquid and have other qualifications that make them difficult to value. Real estate investors already have vehicles like 1031 exchanges to defer their capital gains from real estate deals, so using a QRP to dabble in real estate is overkill. Policymakers designed IRAs to accommodate stocks, bonds, and their highly tradable proxies (index funds, etc.). The intent of the law is to allow the power of compounding, periodic rebalancing, and the reinvestment of dividends and interest to build an IRA investor's wealth over several decades. Tax regulations deliberately exclude exotic and illiquid instruments from IRAs precisely because of their difficulties.
Legal loopholes allow QRPs to invest in such illiquid things because regulators presume that QRPs are sponsored by institutions. The IRS requirements for a QRP are extensive, presumably because corporate sponsors have the resources to manage their administration. Those institutions are further presumed to be sophisticated enough and liquid enough to invest some small portion of their QRP holdings in illiquid things. Structuring a QRP for an individual investor strikes me as a greedy way to fit some securities vendor's illiquid pet projects into a retirement account that wasn't designed to hold them.
The IRS has plenty of guidelines for setting up retirement plans and accounts. Most individual investors are probably just fine with an employer's QRP-administered 401(k) account, along with a traditional IRA. I personally use an IRA because that's all I need as an individual with no corporate plan sponsor. I am not about to spend untold amounts on legal fees and regulatory filings just to pretend I need a QRP in the eyes of the law. I believe the law should frown upon those who abuse QRP loopholes.
Monday, April 08, 2013
Retirement Account Cap Will Limit Ability to Hedge Hyperinflation
The Administration's coming budget plan will cap the value of tax-advantaged retirement accounts at $3M. It's too early to tell how the federal government will enforce this cap without seeing the enabling legislation. I would have no objection if any excess value in a retirement account after the beneficiary's demise were subject to full taxation as part of an estate. If the intent is to prevent retirement accounts from being abused as multigenerational tax shelters, this will prevent them from being passed to heirs in a tax-free status. This idea has more immediate implications for investors than estate taxes.
My readers know that I expect a dollar devaluation and policy overreactions to launch hyperinflation in the U.S. at some point. A tax-advantaged investment account would in theory allow the preservation of wealth during hyperinflation if its asset mix was heavily weighted toward hard assets. Any cap on the account's value poses a complication. If the cap is enforced only when distributions stop at death, it's not much of a concern. If, however, the cap is enforced annually via a special tax, then the nominal value of the account will not rise above $3M in any given year. This will pose a huge problem for investors positioning a portfolio for hyperinflation, because the real value of a hyperinflating currency will decline to the point where a nominal value of $3M is meaningless.
This proposed cap will pose a serious dilemma for investors who want to preserve their net worth during and after a currency crisis. Holding an IRA that is forced to remain below a $3M ceiling will prove disastrous in a hyperinflated economy where a cheeseburger costs $3M. Investors must now wargame scenarios that include the liquidation of an IRA as it approaches the $3M limit, the payment of a penalty, and the deposit of the remainder into a taxable portfolio (presumably also with a heavy hard asset weight) that so far is not subject to the same ceiling. The point of such a mitigating move is to allow a hard asset portfolio to continue to keep pace with hyperinflation.
Caps and taxes on private retirement assets are a form of financial repression that keep redistributive entitlement programs fully funded. Lazy people who did not save for the future think it's fair to take money via taxes from those who did save according to a plan. This idea will make it much harder for makers and savers to keep their capital away from takers.
My readers know that I expect a dollar devaluation and policy overreactions to launch hyperinflation in the U.S. at some point. A tax-advantaged investment account would in theory allow the preservation of wealth during hyperinflation if its asset mix was heavily weighted toward hard assets. Any cap on the account's value poses a complication. If the cap is enforced only when distributions stop at death, it's not much of a concern. If, however, the cap is enforced annually via a special tax, then the nominal value of the account will not rise above $3M in any given year. This will pose a huge problem for investors positioning a portfolio for hyperinflation, because the real value of a hyperinflating currency will decline to the point where a nominal value of $3M is meaningless.
This proposed cap will pose a serious dilemma for investors who want to preserve their net worth during and after a currency crisis. Holding an IRA that is forced to remain below a $3M ceiling will prove disastrous in a hyperinflated economy where a cheeseburger costs $3M. Investors must now wargame scenarios that include the liquidation of an IRA as it approaches the $3M limit, the payment of a penalty, and the deposit of the remainder into a taxable portfolio (presumably also with a heavy hard asset weight) that so far is not subject to the same ceiling. The point of such a mitigating move is to allow a hard asset portfolio to continue to keep pace with hyperinflation.
Caps and taxes on private retirement assets are a form of financial repression that keep redistributive entitlement programs fully funded. Lazy people who did not save for the future think it's fair to take money via taxes from those who did save according to a plan. This idea will make it much harder for makers and savers to keep their capital away from takers.
Tuesday, March 19, 2013
Saturday, March 16, 2013
Alliance for Retired Americans Declares War on Mathematics
I recently stumbled across one of the most unproductive, brain-dead organizations you've never heard of until now. The Alliance for Retired Americans is a lobbying group focused on delivering as much of America's productive wealth to greedy senior citizens as possible. Yes, folks, that's really what they're doing and I'm not pulling any punches.
Check out their FAQ to see a great example of economic illiteracy:
In other words, they want the federal government's unfunded entitlement programs to be paid in full forever. Their crucial "Issues" include preventing any cuts to benefits (with no mention of how future benefits will be funded), support for the Affordable Care Act's mandatory care and free checkups (again, with no clue how to pay for them), joy that legislators cannot find a compromise to reduce the federal budget deficit (with no understanding that deficit spending imperils the nation's credit rating and currency), and other points that ignore the math of the real world.
The morons who promote this Alliance need to read the Bowles-Simpson Commission's final report, which lays out the math. The Alliance rejects outright some common sense reforms like using chained CPI for inflation-indexed programs and increasing the retirement age for Social Security recipients. This group feeds the image of greedy geezers ripping off young savers and Alan Simpson himself blasted them for their ignorance.
My own recent encounter with two local activists from the California group Sen. Bowles excoriated (a.k.a. CARA) was the trigger for this blog article. One activist spoke at a breakfast meeting I attended and made the following points (recapitulated from memory, as her talk was not recorded). My comments are in italics.
"A big portion of the cost of health care is profit for the service providers. I wish we didn't have to have that, because then we could afford more services." Idiot, the profit motive is what incentivizes those providers to offer those services. Take away the profit and you'll have no services at all.
"The rich need to pay their fair share in taxes." Dummy, read this excellent explanation of how impossibly high taxes would have to rise to meet the funding shortfalls reported by the trustees of the Social Security system.
The speaker's breakfast companion, an able-bodied but overweight older woman, was too lazy to get her own breakfast plate. I spoke up in the Q&A after the talk to personally insult the speaker and I was shouted down for being rude. You're gall-dang right I was rude and I'll do it again if I get the chance. These CARA takers abhor makers. Her speech was the most intellectually dishonest and financially illiterate talk I've ever had the displeasure of hearing at a breakfast meeting.
The Alliance for Retired Americans is a union-sponsored monstrosity. Its advocacy of fiscal irresponsibility ought to bring shame to its advocates but that is too much to expect given the gross stupidity in every statement on its website. They ignore the data available from the government's own financial statements on the inevitable insolvency of entitlement programs because their union supporters are a greedy, lazy, and stupid pack of liars. Unfortunately, they speak for a large number of citizens. That is why no entitlement reform will ever come from deliberate action in national policy. The global bond market's revolt will be very painful for these idiots when it destroys the real value of their monthly benefit checks.
Check out their FAQ to see a great example of economic illiteracy:
We are opposed to any form of privatizing Social Security and Medicare. The Alliance is also fighting any new tax breaks for the wealthy at the expense of programs that help seniors. We are also opposed to raising the retirement age.
In other words, they want the federal government's unfunded entitlement programs to be paid in full forever. Their crucial "Issues" include preventing any cuts to benefits (with no mention of how future benefits will be funded), support for the Affordable Care Act's mandatory care and free checkups (again, with no clue how to pay for them), joy that legislators cannot find a compromise to reduce the federal budget deficit (with no understanding that deficit spending imperils the nation's credit rating and currency), and other points that ignore the math of the real world.
The morons who promote this Alliance need to read the Bowles-Simpson Commission's final report, which lays out the math. The Alliance rejects outright some common sense reforms like using chained CPI for inflation-indexed programs and increasing the retirement age for Social Security recipients. This group feeds the image of greedy geezers ripping off young savers and Alan Simpson himself blasted them for their ignorance.
My own recent encounter with two local activists from the California group Sen. Bowles excoriated (a.k.a. CARA) was the trigger for this blog article. One activist spoke at a breakfast meeting I attended and made the following points (recapitulated from memory, as her talk was not recorded). My comments are in italics.
"A big portion of the cost of health care is profit for the service providers. I wish we didn't have to have that, because then we could afford more services." Idiot, the profit motive is what incentivizes those providers to offer those services. Take away the profit and you'll have no services at all.
"The rich need to pay their fair share in taxes." Dummy, read this excellent explanation of how impossibly high taxes would have to rise to meet the funding shortfalls reported by the trustees of the Social Security system.
The speaker's breakfast companion, an able-bodied but overweight older woman, was too lazy to get her own breakfast plate. I spoke up in the Q&A after the talk to personally insult the speaker and I was shouted down for being rude. You're gall-dang right I was rude and I'll do it again if I get the chance. These CARA takers abhor makers. Her speech was the most intellectually dishonest and financially illiterate talk I've ever had the displeasure of hearing at a breakfast meeting.
The Alliance for Retired Americans is a union-sponsored monstrosity. Its advocacy of fiscal irresponsibility ought to bring shame to its advocates but that is too much to expect given the gross stupidity in every statement on its website. They ignore the data available from the government's own financial statements on the inevitable insolvency of entitlement programs because their union supporters are a greedy, lazy, and stupid pack of liars. Unfortunately, they speak for a large number of citizens. That is why no entitlement reform will ever come from deliberate action in national policy. The global bond market's revolt will be very painful for these idiots when it destroys the real value of their monthly benefit checks.
Monday, February 18, 2013
Financial Sarcasm Roundup for 02/18/13
The U.S. stock markets were closed today for President's Day. Why do finance professionals think they deserve the day off? It's not like they're federal workers. You know, maybe I should take that back. Plenty of their institutions got bailouts and partial government ownership to make them the moral equivalent of federal workers.
The G-20 says it is committed to market-determined exchange rates but I can't take them at their word. The major exporting countries are going to really start panicking once Japan's devaluation drives up the prices of their goods. I wonder which country will be first to break with this statement and devalue in kind. China? Europe? It won't be the U.S. as long as other currencies look relatively weak. The U.S. was the last to leave the gold standard in the 1930s and it prolonged our experience in the Great Depression. We'll probably be the last to leave the world's fiat currency regime this time around. Oh, BTW, the devaluation of other countries' currencies will also hurt U.S. exporters, pushing us further into recession.
The SEC wants to know who spiked the call spread options on Heinz from a Swiss bank account. Office betting pools in various investment banks' capital markets groups are probably buzzing over the identity of the traders who may have front-run the H.J. Heinz Co. buyout. This one's simple enough for a ten-year old to figure out but the SEC has to make a big show of trying to find the culprit. The Swiss account was named the "GS Account" for crying out loud. It's worth noting that Goldman Sachs was not an adviser to the Buffet-3G-Heinz transaction, but word could have leaked through insiders who use GS for wealth management. The presumption of innocence always applies, of course. This is America, by golly, not some crony kleptocracy where plutocrats wreck whole sectors at the public's expense.
Future retirees won't be getting squat thanks to their reliance on overpromised entitlement programs. I don't like the slant of the article against defined-contribution retirement accounts. Whatever good intentions went into the creation of Social Security and Medicare are about to disappear into a black hole as seniors move in with their children. Three generations under one roof was the American norm up until the 1950s or so and it will be again very soon.
Online gambling is about to make a comeback in the U.S. as states gradually change their laws. Expect objections from Donald Trump, Indian tribes, and organized crime's front organizations. We should welcome legalized gaming because there's no reason Las Vegas and Atlantic City should have all the fun. This is the ultimate in gamification and I hope California doesn't miss its chance to get out in front. I always wanted to figure out online poker but I have to wait for my state's lawmakers to figure it out first.
Here's a final note related to gambling and the law. A certain Stolen Valor dude is gambling that he can keep breaking the law. His luck is going to run out, as it does for all unethical gamblers.
The G-20 says it is committed to market-determined exchange rates but I can't take them at their word. The major exporting countries are going to really start panicking once Japan's devaluation drives up the prices of their goods. I wonder which country will be first to break with this statement and devalue in kind. China? Europe? It won't be the U.S. as long as other currencies look relatively weak. The U.S. was the last to leave the gold standard in the 1930s and it prolonged our experience in the Great Depression. We'll probably be the last to leave the world's fiat currency regime this time around. Oh, BTW, the devaluation of other countries' currencies will also hurt U.S. exporters, pushing us further into recession.
The SEC wants to know who spiked the call spread options on Heinz from a Swiss bank account. Office betting pools in various investment banks' capital markets groups are probably buzzing over the identity of the traders who may have front-run the H.J. Heinz Co. buyout. This one's simple enough for a ten-year old to figure out but the SEC has to make a big show of trying to find the culprit. The Swiss account was named the "GS Account" for crying out loud. It's worth noting that Goldman Sachs was not an adviser to the Buffet-3G-Heinz transaction, but word could have leaked through insiders who use GS for wealth management. The presumption of innocence always applies, of course. This is America, by golly, not some crony kleptocracy where plutocrats wreck whole sectors at the public's expense.
Future retirees won't be getting squat thanks to their reliance on overpromised entitlement programs. I don't like the slant of the article against defined-contribution retirement accounts. Whatever good intentions went into the creation of Social Security and Medicare are about to disappear into a black hole as seniors move in with their children. Three generations under one roof was the American norm up until the 1950s or so and it will be again very soon.
Online gambling is about to make a comeback in the U.S. as states gradually change their laws. Expect objections from Donald Trump, Indian tribes, and organized crime's front organizations. We should welcome legalized gaming because there's no reason Las Vegas and Atlantic City should have all the fun. This is the ultimate in gamification and I hope California doesn't miss its chance to get out in front. I always wanted to figure out online poker but I have to wait for my state's lawmakers to figure it out first.
Here's a final note related to gambling and the law. A certain Stolen Valor dude is gambling that he can keep breaking the law. His luck is going to run out, as it does for all unethical gamblers.
Tuesday, January 01, 2013
Max IRA Contribution Upped To $5500 For 2013, No Confiscation In Sight
Investors need to check out the IRS rules for tax-advantaged retirement accounts in 2013. One notable item is the increased cap for IRA contributions, now $5500. I made the maximum contribution to my IRA this morning for tax year 2013.
I've been seeing a lot of chatter on the Web lately about national plans to confiscate personal retirement accounts or force their holders to purchase government bonds. I have not uncovered any official record of any such plan under consideration at any level of government. One prominent economist has made a series of public proposals advocating a mandatory annuity-based account system but the political blogosphere has somehow magnified her ideas into a looming threat of confiscation. Calm down, people. Confiscation of IRAs and 401(k)s would be far more disruptive to the U.S. financial sector than FDR's gold confiscation. Mutual fund companies and big banks would cry uncle at the lost fee income and their lobbyists would be out in force. I doubt that any compromise proposal to custody mandatory annuity accounts with the few politically favored big banks would satisfy any Wall Street concerns over lost fee revenue. Any way I slice this one, I just don't think confiscation is any more than a very remote "black swan."
Congress has also considered methods of encouraging contributions to IRAs. Recent hearings considered new incentives that would make retirement account contributions easier. The Administration is even proposing tax credits that will encourage small employers to enroll employees in IRAs.
People can relax for now. A replay of the 2008 financial crisis may put a lot of untouchable ideas back on the table but taking away IRAs isn't likely to be one of them. I suspect that removing their tax exemption or tax deferral would be within the realm of extreme possibility, but even that would occur before outright confiscation (or forced conversion to bond-buying managed annuities) would ever be considered. I made my IRA contribution this year with the risk of eventual taxation in mind, and I would prefer to earn tax-free capital gains while they're available.
I've been seeing a lot of chatter on the Web lately about national plans to confiscate personal retirement accounts or force their holders to purchase government bonds. I have not uncovered any official record of any such plan under consideration at any level of government. One prominent economist has made a series of public proposals advocating a mandatory annuity-based account system but the political blogosphere has somehow magnified her ideas into a looming threat of confiscation. Calm down, people. Confiscation of IRAs and 401(k)s would be far more disruptive to the U.S. financial sector than FDR's gold confiscation. Mutual fund companies and big banks would cry uncle at the lost fee income and their lobbyists would be out in force. I doubt that any compromise proposal to custody mandatory annuity accounts with the few politically favored big banks would satisfy any Wall Street concerns over lost fee revenue. Any way I slice this one, I just don't think confiscation is any more than a very remote "black swan."
Congress has also considered methods of encouraging contributions to IRAs. Recent hearings considered new incentives that would make retirement account contributions easier. The Administration is even proposing tax credits that will encourage small employers to enroll employees in IRAs.
People can relax for now. A replay of the 2008 financial crisis may put a lot of untouchable ideas back on the table but taking away IRAs isn't likely to be one of them. I suspect that removing their tax exemption or tax deferral would be within the realm of extreme possibility, but even that would occur before outright confiscation (or forced conversion to bond-buying managed annuities) would ever be considered. I made my IRA contribution this year with the risk of eventual taxation in mind, and I would prefer to earn tax-free capital gains while they're available.
Wednesday, April 18, 2012
First Warning On End Of Tax-Advantaged Retirement Accounts
The federal government will somehow close its enormous budget deficit. The effort begins with demarcation of boundaries. The debate so far does not include reforms of Social Security or Medicare as the Simpson-Bowles commission urged. Those are popular handouts that are highly visible in the lives of the lower middle class and working poor. The debate has instead begun with tax breaks that the middle and professional classes use to build wealth and prepare for a self-sufficient retirement.
Lawmakers have begun discussing "changes" to tax-advantaged retirement accounts. The only real change this could mean is the elimination of the tax-free treatment of gains in these accounts. It's funny how some brokerages have been encouraging clients with traditional IRAs to convert them into Roth IRAs in the hope of enjoying tax-free withdrawals someday. That hope is probably going to be dashed in a few years. Investors who converted their IRAs paid a tax penalty and probably wasted a chunk of capital in light of what's likely coming.
I had wondered whether financial repression measures would have simply limited retirement accounts to buying only government debt, but this emerging discussion will simply neutralize the accounts altogether. Poor people don't have IRAs but they do love Medicare. The end of tax-free retirement investing means taxes will be raised on the middle class's passive earnings to preserve transfer payments to the poor. Those who intelligently saved for retirement will be punished and their meager wealth will be reduced to benefit those who chose not to save. This is redistributive policy at its worst. Don't say you weren't warned.
Full disclosure: I have an IRA.
Lawmakers have begun discussing "changes" to tax-advantaged retirement accounts. The only real change this could mean is the elimination of the tax-free treatment of gains in these accounts. It's funny how some brokerages have been encouraging clients with traditional IRAs to convert them into Roth IRAs in the hope of enjoying tax-free withdrawals someday. That hope is probably going to be dashed in a few years. Investors who converted their IRAs paid a tax penalty and probably wasted a chunk of capital in light of what's likely coming.
I had wondered whether financial repression measures would have simply limited retirement accounts to buying only government debt, but this emerging discussion will simply neutralize the accounts altogether. Poor people don't have IRAs but they do love Medicare. The end of tax-free retirement investing means taxes will be raised on the middle class's passive earnings to preserve transfer payments to the poor. Those who intelligently saved for retirement will be punished and their meager wealth will be reduced to benefit those who chose not to save. This is redistributive policy at its worst. Don't say you weren't warned.
Full disclosure: I have an IRA.
Monday, February 20, 2012
Sunday, January 01, 2012
IRA Contributions And Financial Repression
Tax-advantaged retirement accounts have long been a key to building wealth for the professional class and building careers for legions of financial advisers. The start of a new year brings broker calls from advisers urging their clients to make the maximum contribution to their IRAs for the new tax year. That would be $5000 for 2012, which hasn't changed since last year. A traditionalist approach to accumulating wealth emphasizes regular investments in a balanced portfolio of asset classes that are risk-weighted according to an investor's tolerance for volatility.
The problem with this traditionalist thesis is that it breaks down in times of extreme economic upheaval. U.S. government and household debt-to-income ratios are abnormally high and neither politicians or consumers show any desire to take responsibility for paying debt down. The capital held in custody for tax-advantaged retirement accounts - IRAs (be they traditional, Roth, SEP/SIMPLE, etc.) and 401(k)s - is a tempting morsel for a debt-addicted governing class. There is no plan at the current time to confiscate IRA assets or force custodians to offer only government debt as an acceptable investment. That will be of little importance in a hyperinflationary environment. There is precedence for sustained financial repression. Central banks in the developed world held interest rates below inflation for decades after World War II to help their governments accelerate war bond repayment.
I don't need any financial adviser to tell me what to do. I made the maximum allowable contribution to my own IRA today, knowing full well that the account exists at the suffrage of a governing class unfamiliar with financial restraint. IRAs can still help a portfolio survive hyperinflation if government leaves the asset mix alone and the portfolio mix includes hard assets (stocks and funds in mining, energy, commercial real estate, and related sectors). The good news is that our governing class is subject to Wall Street's constraint thanks to the financial sector's campaign contributions. Asset management firms and investment banks don't want to lose fee revenue from products in retirement accounts. Limiting IRA and 401(k) financial choices is a political football that would make Wall Street howl. Plutocracy isn't all bad. Mandarins need financial product choices too.
The problem with this traditionalist thesis is that it breaks down in times of extreme economic upheaval. U.S. government and household debt-to-income ratios are abnormally high and neither politicians or consumers show any desire to take responsibility for paying debt down. The capital held in custody for tax-advantaged retirement accounts - IRAs (be they traditional, Roth, SEP/SIMPLE, etc.) and 401(k)s - is a tempting morsel for a debt-addicted governing class. There is no plan at the current time to confiscate IRA assets or force custodians to offer only government debt as an acceptable investment. That will be of little importance in a hyperinflationary environment. There is precedence for sustained financial repression. Central banks in the developed world held interest rates below inflation for decades after World War II to help their governments accelerate war bond repayment.
I don't need any financial adviser to tell me what to do. I made the maximum allowable contribution to my own IRA today, knowing full well that the account exists at the suffrage of a governing class unfamiliar with financial restraint. IRAs can still help a portfolio survive hyperinflation if government leaves the asset mix alone and the portfolio mix includes hard assets (stocks and funds in mining, energy, commercial real estate, and related sectors). The good news is that our governing class is subject to Wall Street's constraint thanks to the financial sector's campaign contributions. Asset management firms and investment banks don't want to lose fee revenue from products in retirement accounts. Limiting IRA and 401(k) financial choices is a political football that would make Wall Street howl. Plutocracy isn't all bad. Mandarins need financial product choices too.
Monday, December 27, 2010
Did Baby Boomers Trade Retirement For Christmas?
We've heard this refrain before. Americans approaching their golden years haven't saved for retirement:
This season's retail results may indicate why this is so. Shoppers are still very willing to part with their hard-earned money:
I would love to see a generational breakdown of this year's shopoholics. Did the Baby Boomers neglect their IRA contributions so they could have a glorious Christmas? Did the Sixties' hippie kids keep on "living for today" right through tomorrow and the next day? Did they spend all that they would earn tomorrow so that they could have today? I know, that last sentence is a reference to an oft-heard line about sacrifice, but in this context it is an apt description of sacrifice through delayed gratification that did not occur at all.
Entitlement can mean many things. It can mean an expectation that Social Security and Medicare are fully collateralized insurance plans when they are in fact unfunded liabilities. It can mean an expectation of ever-expanding material acquisitions with no regard for payment. If entitlement means all of those things, it ultimately means insolvency.
Old habits, acquired long ago and repeatedly reinforced, can prove very hard to break. Unbroken habits will break us all financially. Merry Christmas.
Nota bene: The author is a member of Generation X.
Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.
This season's retail results may indicate why this is so. Shoppers are still very willing to part with their hard-earned money:
Forget the returns line. People hit the stores after Christmas to buy, indulging the rediscovered retail appetite that may have made 2010's holiday shopping season the biggest ever.
I would love to see a generational breakdown of this year's shopoholics. Did the Baby Boomers neglect their IRA contributions so they could have a glorious Christmas? Did the Sixties' hippie kids keep on "living for today" right through tomorrow and the next day? Did they spend all that they would earn tomorrow so that they could have today? I know, that last sentence is a reference to an oft-heard line about sacrifice, but in this context it is an apt description of sacrifice through delayed gratification that did not occur at all.
Entitlement can mean many things. It can mean an expectation that Social Security and Medicare are fully collateralized insurance plans when they are in fact unfunded liabilities. It can mean an expectation of ever-expanding material acquisitions with no regard for payment. If entitlement means all of those things, it ultimately means insolvency.
Old habits, acquired long ago and repeatedly reinforced, can prove very hard to break. Unbroken habits will break us all financially. Merry Christmas.
Nota bene: The author is a member of Generation X.
Thursday, August 19, 2010
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