The Financial Chess Game… Required Strategy

Issue 19.10

I remember,as a child,my grandfather and I would play chess together.  As an impatient youngster,I could never understand why he would sit and think about his move for 5 minutes or more.  When he was done,I would immediately move my piece and then wait for his 5-minute move again.

            It wasn’t until I was older that I understood chess required strategy.  My grandfather was taking his time to think about his move because he wanted to make the right move to win.  I wasn’t able to beat him in a game of chess until both he and I were much older when I finally understood we have to think and look at all the moves and strategies available to us.

            My grandfather taught me the importance to think ahead,not only in a game of chess,but in life.  I have used his lessons in my personal life – financial included.

            In 2001,President Bush created a tax cut that put us into the lowest tax brackets in U.S. history.  This is the time to plan how you will prepare for the government’s next move.  If they don’t decide this year to extend Bush’s tax cuts,then tax brackets will return to what they were in 2000.  With the Federal deficit rising higher by the second,the government of course sees that raising taxes will help pay off the debt we owe as a nation.

            Also,as part of the tax cuts,the estate tax-free limit went from $600,000 over the years to $3.5 million in 2009.  In 2010,there is no estate tax whatsoever.  In 2011,your estate will be taxed at as high as 55% on any assets over $1 million.

            In conclusion,I have to say this isn’t the time to be an impatient youngster financially.  This is the time to sit down and map out your strategies with a professional to make sure you’re making the right move for 2011.