Stan's World - Sharing Knowledge

S.F. Ehrlich Associates |

December 31, 2019

While shopping recently, I was asked by a cashier how much she would owe in taxes on an IRA she liquidated. It was an interesting question on many levels.

Aside from the fact that I don’t even know her last name (nor does she know mine, though she knows I do something with ‘money’ for a living), I also don’t know anything about her income, financial status, or cash flow needs. When I asked why she withdrew all the funds from the IRA, she replied that it was due to the low return she was getting. While changing investments is an option, it’s not if you don’t know that you can. 

She then told me that she has several IRAs since she has to open a new IRA account every year. (No, she doesn’t.) In a different bank. (Not true.) She knew that because, well, she just did.

When I explained that withdrawing funds from an IRA would result in the payment of taxes that weren’t necessary if she had no need for those funds, she said it was so little it didn’t matter. I suspect the answer was either from embarrassment or because she found the whole situation too confusing. The experience actually left me feeling sad. 

Our brief exchange reinforced something I’ve known for many years: Many Americans know little about investments. For those who have cobbled together enough shekels to open an IRA, my sense is they walk into their local bank and ask for help. Further, I suspect that the help they get often consists of assistance completing the paperwork to open an IRA account, followed by a recommendation to buy a CD because “that’s what everyone else does.”

With my cashier fresh in my mind, consider this to be my version of a public service message as we start a new year. Pass it on to those friends, relatives, or neighbors, who might have a question, and don’t know who to call.

  • Do you have a child – of any age – who you would like to help learn more about money? Give them our number. (No charge.)
  • Do you have an adult child who just got his/her first job and doesn’t know which investment options to select for their 401k plan (or whether or not to invest in the company 401k plan)? Give them our number. (Yup, no charge.)
  • Do you have an elderly parent who might need some help understanding their monthly bills, Social Security check, or a Medicare benefits form? Give them our number. (Still, no charge.)
  • Do you have a co-worker/neighbor/relative who looks bewildered when he/she talks about their retirement plan? Give them our number. (Did I mention, no charge?)

If you know someone who can use our help, don’t be shy in passing along our contact information. We’re not soliciting business; rather, we feel a moral obligation to help people deal with issues they may find intimidating. What might be a simple question for us to answer may feel overwhelming to someone else, and maybe we can fix that. 




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