Permanent Value

Week In Review 9/12/14

Bruce Doole
September 12th, 2014
Joan Rivers Covered Her $290 Million Bases, Leaving Space for the Intangibles
One of the biggest celebrity fortunes looks relatively simple to distribute. Good estate planning means the heirs can concentrate on mourning, the funeral and the lingering medical questions.

Joan Rivers went out at the top of her game, leaving behind what the wealth rankings estimate is around $290 million for her heirs.

As for what seems to be a comfortable nest egg of $260 million in equity and other investments, it’s a little unlikely that a lot of that money was outside Joan’s estate.

And little gifts of current income hits the gift tax limit remarkably quickly when you end up with $290 million in total to play with. Even $5 million transferred into a trust when Edgar died in 1987 and invested in the broad market might only represent $30 million of Joan’s holdings today.

The estate plan is probably tighter than the funeral instructions. If so, she paid every dollar of tax she wanted to pay.

Scott Martin, Contributor


  • ISM Manufacturing Index increased to 59 in August from July’s 57.1, the fastest growth in three years and the strongest reading in a decade.
  • U.S. trade deficit narrowed in July to $40.5 billion, the smallest since January, largely on growing demand for U.S. autos and petroleum products.
  • Jobless claims rose only 4,000 to total 302,000 in the week ended Aug. 30.
  • U.S. unemployment fell to 6.1% in August because of people leaving the workforce. Employers hired fewer workers than forecast.

Source: Ivy Fund

Week in Review 8/29/14

Bruce Doole
August 29th, 2014

Plans Change: Working After Retirement

A new Merrill Lynch/Age Wave study found that 47% of respondents age 50 or older who identified themselves as retired have worked or plan to work during their retirement years. What’s more, 72% of pre-retirees in that age range said that their ideal retirement will include some form of work.

“We’re seeing an increase in what people normally think of as retirement age,” says Ken Hoffman, managing director at HighTower’s HSW Advisors, an independent private wealth management boutique in New York. “It had been 62 to 65 but now it’s typically between 65 and 69.”

The unforgotten financial crisis plays a role in such extended working years, according to Hoffman. “Many people are still shell-shocked after what happened in late 2008 and early 2009,” he says. “That’s especially true for the people who panicked then, got out of stocks, and never got back in. They’ve locked in the losses they took then, with a permanent impairment to their investment capital.”


The tendency to keep working longer affects planning for retirement income in several ways. “By working, people are able to defer Social Security and increase their benefits by 8% a year,” says Hoffman.

Historically, starting Social Security as early as possible has been common. If financial planning clients are now working longer and will do so in the future, thus starting Social Security later, the difference in ongoing retirement income can be enormous. Someone who could start benefits at age 66 with about $30,000 a year (or a reduced benefit of $22,500 at age 62) would receive around $40,000 a year by delaying until age 70, not counting cost-of-living adjustments. Delaying also can increase spousal benefits for married couples.

Moreover, seniors with some earned income are less dependent on portfolio withdrawals for retirement income. Therefore, a smaller drawdown—and a smaller portfolio—might be adequate for a comfortable retirement lifestyle, especially in the early years of retirement, when clients may be healthier and more likely to earn substantial income. “By working longer and waiting to start portfolio withdrawals,” says Hoffman, “people can knock off a huge amount from their required retirement funding.”

Source: Donald Jay Korn, Financial Planning


  • Consumer prices rose 0.1% in July and were up 2% over the past 12 months.
  • July housing starts rose 15.7% to 1.09 million.
  • Weekly jobless claims fell by 14,000 to 298,000 for the week ending Aug. 16.
  • Existing home sales rose 2.4% in July to a seasonally adjusted annual rate of 5.15 million.

Source: Ivy Funds

Week in Review 8/21/14

Bruce Doole
August 21st, 2014

When To Claim At 66: Social Security

It is reccommended to claim Social Security earlier than age 70 in some situations. For a married couple, one spouse can take the spousal benefit at age 66 while they both delay until age 70 for maximum benefits.

With this strategy John Smith might claim benefits at 66, his wife Ann would claim a spousal benefit at 66 that’s equal to 50% of John’s benefit, and John would suspend his full benefit to as late as age 70. Meanwhile, Ann’s own benefit continues to grow by 8% a year, plus cost-of-living adjustments, until Ann claims her own benefits at age 70.

In addition, some people have very large pensions and don’t need Social Security for retirement income. They may take Social Security early and use the money to purchase a properly-structured permanent life insurance policy. Such a policy might eventually accumulate substantial cash value that can be accessed tax-free, via loans and withdrawals, while also providing an increased estate to the client’s beneficiaries.

Source: Donald Jay Korn, Financial Planning


  • Retail sales were flat in July following a 0.2% gain in June.
  • Jobless claims increased 21,000 to 311,000 in the Aug. 9 week, the highest level since late June.
  • Producer price inflation eased in July to a 0.1% gain after a 0.4% increase in June.
  • Industrial production increase a robust 0.4% in July, surpassing expectations.

Source: Ivy Fund