The Lange Report – November 2017

Table of Contents

 

Money Can Buy Happiness!
by James Lange, CPA/Attorney

Bicycling in Columbus, Ohio. Photo courtesy of Paul S. Heckbert

The Los Angeles Times recently ran a column entitled Science proves it: Money really can buy happiness. “An international research team has demonstrated that you really can make yourself happier by paying other people to do your time-consuming tasks.” The crux of the article is that people who spend money on a time-saving purchase report greater life satisfaction. I have written before about retiring from the things in life that you don’t love doing. In fact, I’ve been advocating and living this philosophy for years. Now studies from Harvard Business School and other places are proving it.

There are basically four ways I want to spend my waking hours:

  1. Working
  2. Being with family and friends
  3. Recreation/exercise/play
  4. Travel

Now, let me share a few things that aren’t on that list: shopping for food, cooking, cleaning, laundry, mowing the lawn, shoveling snow, and maintaining the house, our cars, and even my bicycles.

My wife, Cindy, doesn’t like doing any of these things either. Earlier in my career, with few exceptions, Cindy and I did all those chores. (OK, she did a lot more than I did). Now we hire people to do these chores, which frees up our time. One of the interesting conclusions from the research was that the positive effect of buying time was true for people of all income levels. You didn’t have to have a lot of disposable income to benefit. The other interesting tidbit was that “few people do it even when they can afford it.” In their sample of 850 millionaires, only about half reported spending money on outsourcing disliked tasks!

I was recently with clients who have a beautiful second house in the country. They love being there. Well, sort of. They were complaining that it seemed like every time they were up there, they spent the entire time doing chores to maintain the place. I suggested they hire some help. That’s what I do for my little place in the country. I know…I can hear the voices challenging me…it won’t be done as well if I don’t do it. Yes, you are right. But perhaps the trade-off is worth it. With the free time, you can engage in activities that give you pleasure and reduce your level of stress.

In previous newsletters I have written on the value of spending money on experiences instead of material things. For instance, taking the family on a vacation or arranging a get-away with old friends. There is considerable research that shows people benefit from buying pleasurable experiences. But this research shows that you might also want to consider buying your way out of experiences that are not pleasurable.

I frequently attend continuing education seminars and/or give presentations. When I travel for business, I take a couple extra low-stress days with my “bought time” and enjoy the city. Just this year, I have attended events in Cleveland, Toronto, San Francisco and Chicago. I also presented at the Pennsylvania Bar Institute in Philadelphia and at a national estate planning conference in San Diego. All the cities mentioned are wonderful places to spend at least a couple of days to unwind.

So, think about giving up your apron and lawn mower and buying some happiness.

P.S. If you want to read the full report on buying time, you can find it online on the Proceedings of the National Academy of Sciences webpage at www.pnas.org.

 


When Will The Death of the Stretch IRA Pass?
by James Lange, CPA/Attorney

Since I recently sent out an Advance Reading Copy of our latest book, The 5 Greatest Tax-Saving Strategies for Protecting Your Family from the New Tax Law, many clients are asking, “When will the new law pass?”

As we are writing this newsletter, the House released its proposed bill in full form and the Senate released their version. Neither version includes the Death of the Stretch IRA.

So, there are now two very good reasons why I am thinking the change will come later rather than sooner.

  1. It doesn’t appear in either of the current tax proposals.
  2. It isn’t clear to me that any major tax overhaul is going to pass this year or even next year.

But there is also another very clear consequence of the tax legislation that is being debated: we have an enormous deficit and it is likely to get worse. With good planning, under existing law, there will be trillions of dollars of inherited IRAs that will be “stretched” over 30 years and in some cases 60 years or more. Our office will be responsible for several billion of the trillions of dollars that will be stretched. Congress needs to find ways to reduce the deficit and forcing heirs to distribute inherited IRAs over five years vs. taking required minimum distributions over a lifetime, will be an easy way to increase tax revenue in the short term. And, as I have said, the bi-partisan Senate Finance Committee recommended killing the stretch with a 26-0 vote. As I mentioned above, I don’t think we are likely to see a change this year or even early next year. It might not happen for several years. I still think it will happen, however, and stand by all the advice given in The 5 Great Strategies for Protecting Your Family from the New Tax Law.

I would like to think that our petition found at www.stopthesneakytax.com was at least part of the reason the death of the stretch proposal was taken off the table, at least for now. But realistically, our petition with 355 signatures, even if it was distributed to the appropriate Senate and House leaders, wasn’t the reason they took it off the table. That is not to say that our voice has no power. People should continue to forward the petition for signatures so that we show greater strength when the proposal does come before Congress.

 


KenKen Puzzle

How To Play KenKen

  1. Fill in each square with a single number. In a 4×4 grid, use numbers 1 – 4.
  2. Do not repeat numbers in any individual row or column. For example, when you solve a 4×4 grid, each column and row should contain the numbers 1, 2, 3, and 4.
  3. The numbers in each cage (heavily outlined set of squares) must combine IN ANY ORDER to produce the target number indicated in the cage using the noted math operation.
  4. A number may be repeated within a cage as long as it’s not in the same row or column.

See answers to the KenKen Puzzle

Fennel Salad with Roasted Cod Fillets

Serves: 4
Prep Time: 10 minutes
Cook Time: 30 minutes

  • 2 fennel bulbs, trimmed and julienned
  • 4 tablespoons plus 1 teaspoon grapeseed oil
  • sea salt and freshly ground black pepper
  • 2 bell peppers (red and/or yellow) seeded and julienned
  • 1 large yellow onion, cut into 8 wedges
  • 2 tablespoons sweet paprika
  • 2(12-ounce) wild-caught cod fillets
  • 1 tablespoon extra-virgin olive oil
  • 1 tablespoon balsamic vinegar
  • 1 teaspoon Dijon mustard
  • 2 small heads Boston lettuce, roughly torn

Preheat the oven to 450 degrees Fahrenheit. Line two rimmed baking sheets with aluminum foil.

In a medium bowl, toss the fennel with 2 tablespoons of the grapeseed oil, ½ teaspoon of salt, and a pinch of black pepper. Spread evenly on one of the lined baking sheets. Repeat the process with the bell peppers and onions and spread evenly on the other baking dish.

Roast the fennel on the bottom rack of the oven and the bell peppers and onions on the middle rack until the fennel has browned on the bottom 12-15 minutes. Give all the vegetables a toss to prevent burning and continue to cook until they are all golden brown, another 5-7 minutes. Remove from the oven, transfer to a large bowl, and set aside.

In a small bowl, whisk the paprika into ¼ cup of cold water.

Remove the foil and brush one of the baking sheets with the remaining 1 teaspoon of grapeseed oil and place the cod fillets on the sheet. Baste with about half of the paprika mixture. Roast until the cod is opaque throughout, basting again with the remaining paprika mixture halfway through. Fish typically takes about 12 minutes to cook per inch of thickness.

While the fish is baking, whisk together the olive oil, vinegar, mustard, and a pinch of salt in a small bowl. Add to the bowl of roasted vegetables and toss to coat.

Divide the lettuce among four serving plates and top with the roasted vegetables.

When the fish is done, use a fork to gently flake the fillets into bite-sized pieces. Arrange the cod on top of the fennel salad and serve.