The Weekly Economic & Market Recap
Economic theory suggests that a country’s optimal tariff or trade restriction is zero regardless of other countries’ trade policies. Despite well-reasoned economic theory, trade tariffs are frequently not zero, and trade wars do happen largely due to political considerations. There is a compel-ling argument that if the U.S. can shrink its trade deficit, we could boost economic growth meaningfully above the 2% trend line rate. Our current annualized net trade deficit is roughly $600 billion, which is 3% of our $21 trillion economy. China is by far the most significant contributor toward our trade deficit. The U.S. has a negative trade balance of $420 billion with China. The U.S. imports $540 billion worth of goods and services, and exports only $120 billion to China. The Trump administration would like to oblige the Chinese to buy more products from us, which would boost our exports to China, thus reducing the negative economic drag of such a large trade deficit. The actual trade deficit element of the dispute can be solved relatively easily.
A Roth 401(k) offers tax advantages. Here’s how it works
There are no tax consequences when you take money out of a Roth 401(k) when you’re 59½ and you have met the five-year rule. If you need $20,000, take out the $20,000, and no taxes are due. If you take a similar distribution from a traditional 401(k) plan, the money you withdraw is subject to ordinary income tax.
Then there are the required minimum distributions. When you turn 70½, whether you need the money or not, you are required to take an RMD from a traditional 401(k). But with a Roth, you don’t have to take distributions. This makes a Roth 401(k) a great estate-planning tool.y.
INVESTMENT OUTLOOK - A Quadrant Capital Management Publication - FIRST QUARTER 2019: MARKETS SPARK JOY
In March, we observed Women’s History Month, commemorating and encouraging the study, observance and
celebration of the vital role of women in American history. 2019 represents the 99th anniversary of women’s suffrage in the US. In recognition thereof, we’d like to introduce you to some prominent women in the investment world, including Tina and Goldilocks.
But first, Marie. The whole world, it seems, has embraced Marie Kondo. All around the globe, people are emptying
their closets, discarding the unloved and unused, and retaining only those items that spark joy.
I’m 62. My wife isn’t. Do we qualify for the pension exclusion?
You need only be 62 on the last day of the tax year in order to meet the age requirement for claiming the pension exclusion, said Cynthia Fusillo, a certified public accountant with Lassus Wherley, a subsidiary of Peapack-Gladstone Bank, in New Providence.
If only one spouse reaches 62 by year end, New Jersey still allows you to claim the maximum exclusion - $80,000 for 2019 - but only against the pension, annuity or IRA income of the age-qualified spouse, she said.