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YOUR MONEY: Retirement reform wants more of your tax dollars now

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YOUR MONEY: Retirement reform wants more of your tax dollars now

NEW YORK (Reuters) – Saving for retirement is such a lofty goal that the U.S. government has always been willing to give tax incentives to encourage people to do more of it.

FILE PHOTO: An employee counts U.S. dollar bills at a money exchange office in central Cairo, Egypt, March 20, 2019. REUTERS/Mohamed Abd El Ghany/File Photo

But times change, and the retirement reform bills that are on a fast-track through Congress reflect some key shifts in approach that will make a huge impact on the tax bills of millions of Americans.

Here is what you need to know about the major provisions:

* Inheritors will pay more tax, sooner

The SECURE Act, which passed the House of Representatives on May 23, eliminates what was known as the “stretch” IRA, which allowed a person who inherited an IRA (and is not a spouse of the deceased) to withdraw from it during their own lifetime.

Once the Senate passes its version of the bill, inheritors will only have 10 years to empty those accounts and pay the tax due.

This could affect some 80 million people, according to Leon LaBrecque, a certified financial planner based in Akron, Ohio.

The difference? LaBrecque tested a hypothetical account of $1 million that would earn a 7% return if it remained invested and only the required minimum distributions taken out. A 25-year-old who inherits this money from a grandparent would pay $400,000 more in taxes than they would under the current rules.

Even more consequential: If the bulk of the money were allowed to grow, the inheritor would receive “a lot, lot more money,” said LaBrecque.

With the new bill, it will be important for those who will leave accounts with funds of more than $100,000 to get financial advice in their lifetime.

Converting the funds over several years to a Roth IRA is one option to save on taxes, because inheritance rules are more lax. Another is to make use of trusts, said Vladimir Kouznetsov, a certified financial planner in Irvine, California.

* Your small business may offer you a retirement plan

More than 40 percent of private sector workers do not currently have access to a workplace retirement plan, according to the Pew Charitable Trust. One provision of the SECURE Act would allow small businesses to band together to offer plans.

Sounds great, right?

“I’m not going to call it a bad thing. It’s more like a bandaid,” said Peter Palion, a certified financial planner in the New York area.

The reason for Palion’s lack of enthusiasm is also related to the ‘pay tax now or later?’ dilemma. Employees without workplace plans could make use of IRAs for retirement savings if the government would raise the contribution level from $6,000 to be equal to the $19,000 allowed in 401(k) plans, Palion pointed out. But that would mean less tax revenue now.

* Your required minimum distributions will start later

The House bill raises the age that you are required to start taking money out of your IRAs and 401(k)s to 72 from 70 1/2. The Senate’s version pushes it to 75. Any movement acknowledges that people are working longer.

The difference may seem small, but it can make a tax impact.

Robert Leiphart, a financial planner based in Trumbull, Connecticut, had a meeting with a small business client recently, who was concerned about two full-time employees over 70 who were still contributing to the 401(k) plan and at the same time having to take out required distributions.

That is a tax double-whammy, and they are also charged transaction fees, Leiphart said.

* You can have annuity options in your 401(k)

Financial services companies lobbied hard for a provision to allow options for lifetime income products within 401(k)s, which typically only have mutual funds.

This is easy to understand, given their stake in opening up a new market – 401(k)s hold more than $5.2 trillion in assets, according to the Investment Company Institute.

Financial planners are skeptical, because fees can be high and options complicated.

Kouznetsov, for one, has concerns about the portability of such plans. When you change jobs now, you can easily move your 401(k) assets with you. But annuities are regulated state-by-state.

Chris Spence, senior director of government relations and public policy for TIAA, said that the employee would keep the annuity with the old company, much like workers do with pensions when they change jobs.

Education will be key.

“Financial planning is still relatively expensive and available to small portions of people. We haven’t provided education enough for people to figure it out themselves,” said Spence.

Editing by Bernadette Baum

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‘Below Deck’ star Captain Sandy on her relationship with gospel singer Leah Shafer: ‘I feel so blessed’

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'Below Deck' star Captain Sandy reveals she's dating gospel singer Leah Shafer

Captain Sandy Yawn couldn’t be happier with her new relationship with gospel singer Leah Shafer.

Speaking to Fox News, the “Below Deck Mediterranean” boss opened up about the pair’s instant connection and how she fell head over heels for Shafer.

“It’s new and I feel so blessed,” Yawn, 54, told us. “She’s an amazing soul and she has a beautiful voice.”

The couple met over Facebook in October after Shafer sent the reality star a message, and one line in particular — “many blessings” — really grabbed Yawn’s attention. From there, the sparks flew.

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“It was like a magical moment,” gushed Yawn, noting that she was initially drawn to Shafer’s “spirit.”

“She’s aesthetically beautiful but as many people know you can have very handsome [men] and beautiful women but they may be not so beautiful on the inside, and it was that part of her,” she added. “Her soul. Her spirit. Her gentleness. Her kindness. She’s the first person I ever met in my life who does not swear. Not one swear word.

“So let’s just say I’m trying to clean up my mouth,” Yawn teased.

Last June, the yacht captain admitted to The Daily Dish that because of her career “it’s hard to have a relationship.” Fast-forward to today, now that she’s found someone, Yawn is even more grateful.

“I feel like through life you meet people, you have relationships, but then you just say: ‘Ok. I don’t want to like meet, go out, you know have a relationship for three years and break up.’ I want someone with me for the rest of my life.

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“I mean I’m 54,” Yawn continued. “I’ve lived a long life that’s really great. I’m still very young in my spirit. And you know Leah has come into my life. It was a magical connection. It wasn’t something that was pursued and I feel so lucky and that’s my goal for the rest of my life — is her.”

As for if there are wedding bells in the near future? “[We’re] just enjoying [it] right now — in a committed relationship,” Yawn explained. “So that part may come later.

“For now, it’s just really getting to know each other and spending time [together],” Yawn, who has since relocated from Los Angeles to Denver to be closer to Shafer, shared.

Of the couple’s romance, the Bravo personality added: “I love the balance that we have. It’s not one person takes care of the other. It’s such a great balance and we fit. It fits.”

Before Yawn, Shafer was married to Ross Shafer — with whom she shares a 13-year-old daughter Lauren — for 13 years, according to Page Six.

“I just hope that everyone’s good to her,” Yawn told Fox News, adding that it’s a “big change” for Shafer.

In May, The Cheat Sheet reported that since the couple has gone public with their relationship, “some religious institutions have turned their back” on Shafer. In response to the backlash, Shafer explained to the outlet at the time: “I think you can’t help who you fall in love with.”

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Yawn has also been there for her new love, giving Shafer unwavering support and advice.

“In the very beginning I was on television, Bravo was really great at the social media part saying: ‘Listen do not respond to the negative. Just stay focused on what your true goal is the show and just focus on the positive.’ And for her, this has never happened,” Yawn noted.

“It’s brutal,” she continued. “They are tearing her apart — the gospel world — some of them, but she’s also getting a lot of love. So I said Bravo taught us to: ‘Block. Buh-bye.’ And you just shake those people off and you focus on the people who are positive, but somehow the human mind always goes to the negative and it’s so hard. At some point, you just block those people.”

Yawn’s relationship isn’t the only new part of her life though. The yacht captain is also currently starring on season 4 of “Below Deck Mediterranean.”

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“It’s an incredible feeling and I’m grateful and gracious to Bravo,” Yawn said of the show being picked up again. “Also, it allows many Americans and other countries to see that this is an amazing time that we have doing a job and there’s actually jobs in this industry and also look at the beautiful places we go.”

She continued: “And I think it also encourages people to go travel and [shows that] chartering is for everyone. There are different sized vessels. Not every boat has to be this massive yacht but there are smaller yachts you can charter. So it’s a great thing. Bravo has done a great thing for the maritime industry.”

Looking back over the last five years since she made her debut on season 2 in 2014, Yawn admits that this is the first time she’s “really stayed focused on being a yacht captain” instead of “thinking about the cameras.”

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“[It] is so hard to do,” she added. “And it really helps when you’re not challenged and I think my relationship with [chief stew] Hannah [Ferrier] was a lot better [this season], so I wasn’t so focused on that per se, but I actually was able to do my job.”

“Below Deck Mediterranean” airs Mondays at 9 p.m. ET on Bravo.

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Today on Fox News, June 17, 2019

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Today on Fox News, May 7, 2019

STAY TUNED

On Fox News: 

Fox & Friends, 6 a.m. ET: Special guests include: Senate Majority Leader Mitch McConnell; Kim Goldman reacts to O.J .Simpson joining Twitter;  James Murray on his new book “The Brink.”

On Fox Business:

Mornings with Maria, 6 a.m. ET: Maria Bartiromo will broadcast live from the 2019 Cannes Lions International Festival of Creativity in France.

On Fox News Radio:

The Fox News Rundown podcast: “The president’s poll problem” – A new Fox News Poll shows President Trump lagging behind former Vice President Joe Biden by 10 points. GOP Strategist Brad Blakeman and Fox News contributor Richard Fowler weigh in. Monday marks 25 years since the infamous O.J. Simpson bronco chase, when he was on the run after being accused of murdering his ex-wife Nicole Brown Simpson and her friend Ron Goldman. Ron’s sister Kim joins the podcast to reflect. Plus, commentary by Judge Andrew Napolitano, Fox News senior judicial analyst

Want the Fox News Rundown sent straight to your mobile device? Subscribe through Apple Podcasts, Google Play, and Stitcher.

The Brian Kilmeade Show, 9 a.m. ET: Michael Goodwin, New York Post columnist, on the mainstream media’s response to Sarah Sanders’ departure from the White House. Bret Baier, host of “Special Report” and Kennedy on the top headlines of the day. U.S. Sen. Bill Cassidy, R-La., on the latest in the crisis at the border. David Sanger in the latest on cyber warfare.

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Penn Jillette talks about ‘hardcore’ method to keep weight off: report

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Rep. Ilhan Omar fires back at VP Pence for saying she ‘doesn’t know what she’s talking about’ amid Venezuela remarks

Penn Jillette, half of the magic duo Penn & Teller, said in a recent interview that if you take health advice from a Vegas magician, “you are an idiot,” but said his method of fasting 23 hours a day has proven effective.

Jillette told The Los Angeles Times that his health was poor when he reached 330 pounds. He was on six different medications a 90 percent heart blockage. He said he took to the internet and sought ways to avoid surgery.

“Don’t believe those articles that say, “Just cut your portions down by 20 percent,” he told the paper. “Skip dessert” or “Cut out sodas.” Yeah, that seems logical. But it doesn’t work for me — I want to lose a pound a day. I want to see the scale go like this [points straight down]. So I went for a radical change in diet — whole-food plant-based, hard-core vegan, vegetables, no processed food, no sugar. And I limited my eating to just an hour a day, so I’m always fasting 23 hours.”

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He said the lifestyle is obtainable by anyone, but they just have to be committed. “Decide it’s going to be hard and do it like the other things that are hard in your life.”

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He said he cut out all processed food and eliminated pasta and bread. He said it took him three years not to want a chocolate shake. He said he still exercises but less than before.

The Associated Press contributed to this report

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