Lantern Wealth Advisors, LLC
35 Pinelawn Road
Suite 101E
Melville, NY 11747
(631) 454-2000
info@lanternwealth.com
https://lanternwa.com/

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Major Indexes For Week Ended 11/15/2019

Index Close Net Change % Change YTD YTD %
DJIA 28,004.89 +323.65 1.17 +4,677.43 20.05
NASDAQ 8,540.83 +65.52 0.77 +1,905.55 28.72
S&P500 3,120.46 +27.38 0.89 +613.61 24.48
Russell 2000 1,596.45 -2.41 -0.15 +247.89 18.38
International 1,976.69 +0.04 0.00 +256.81 14.93
10-year bond 1.83% -0.10% -0.86%
30-year T-bond 2.31% -0.11% -0.71%
International index is MSCI EAFE index. Bond data reflect net change in yield, not price. Indices are unmanaged and you cannot directly invest in an index.


Find The Major Economic Trend Hidden In This Picture

Major economic trends are always in front of us, hidden in plain sight. The spectacular real retail sales growth trend is in this picture, but you won't see it unless you know to look for it.

Real retail sales are spectacular, adjusted for inflation. Since March 2019, real retail sales shot almost straight up in a short time and were already at a record territory for several years.

Retail sales are a proxy for consumer strength and consumers drive 70% of the economy. So, this is an influential trend. However, unless you know to adjust retail sales for inflation, you would miss the trend. That's how the media reported it.

After the U.S. Commerce Department released the latest monthly retail sales figures on Friday morning, the financial press and financial cable TV channels reported that October's three-tenths of 1% uptick over September allayed fears of a downturn, but it was nothing spectacular. They missed the hidden trend in the economic picture by not adjusting retail sales for inflation.

Inflation is at a long-term low and is not showing any sign of returning anytime soon to its past performance in the 1970s, 80s and 90s. A low inflation rate masks strong real growth in consumer spending. The trend is unfolding in the current investment picture. Spotting it requires a trained eye and the media and financial press may not always recognize such hard to read changes in the economic fundamentals.

Viewed from this perspective, the newly released retail sales data helps explain why stocks broke a new record for the third consecutive week, with the S&P 500 closing on Friday at 3,120.46.


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.


Retirement Income Alert: Do You Own A $1 Million Plus IRA In A High Income-Tax State?

If you own a $1 million IRA account and live in a state with a high income-tax rate, here's a financial planning tip that could save you thousands annually on state income tax. The strategy requires setting up a trust in a state with no income tax, which is probably not something you do every day. So, here's a primer.

This is a new way to legally reduce your taxes and comply with current tax law, and a key principle driving the strategy recently was affirmed by a Supreme Court ruling. Basically, the non-grantor trust you would set up creates a new taxpayer in a state with no income tax. Then, the non-grantor trust distributes income. If you live in a state with an income tax, establishing the trust outside the reach of the state in which you live eliminates the state income tax you'd otherwise owe.

A recent U.S. Supreme Court ruling upheld the key principle behind the strategy. The June 21st, 2019 majority opinion of the Court ruled against the state of North Carolina, which had argued that Kimberly Rice Kaestner, the beneficiary of a North Carolina trust, owed the state tax on income she received through the trust. The North Carolina trust had been set up by her father, Joseph Lee Kaestner III, a New York resident, in 1992, with Ms. Kaestner named as one of the beneficiaries. In 1997, Ms. Kaestner moved to North Carolina and many years later the state assessed an income tax on the trust, citing a law authorizing North Carolina to tax any trust income for the benefit of a state resident.

The Court rejected North Carolina's argument, saying it had violated the Fourteenth Amendment's due process clause, since the beneficiaries had no right to demand the income from the trust and are uncertain to receive it. In fact, the trust had paid no income to the beneficiaries in the years for which North Carolina claimed taxes were owed!

This strategy is particularly timely because of a looming reform to the federal tax law. The tax proposal, which is widely expected to be signed into law by the end of 2019, requires that distributions of income from IRAs you leave to non-spouse beneficiaries— your children and other loved ones— be distributed over 10 years. This would prevent your heirs from taking minimum annual distributions based on their life expectancy on inherited IRAs— a popular strategy known as a "Stretch IRA." By utilizing a trust to move the IRA distributions to a state with no income tax, your beneficiaries avoid state income tax on those required distributions of income on inherited IRAs.

Why does this advisory merit urgent attention of individuals with IRAs exceeding $1 million in high income tax states, even though the proposal may not be signed into law until the end of the year? The answer: Because both chambers of Congress and President Trump have expressed support for the reform.

This aspect of retirement income planning is fraught with complexity. New York and California recently enacted laws adversely affecting non-spouse beneficiaries residing in states with an income tax. Please contact us with questions about this topic, as this strategy requires personal advice from a qualified tax professional.


The above referenced information was obtained from reliable sources, however Lantern Investments, Inc. and Lantern Wealth Advisors, LLC cannot guarantee its accuracy. Opinions expressed herein are subject to change. Past performance is no guarantee of future results. Asset allocation and diversification do not assure a profit or protect against losses in declining markets. Any information given on the site is informational and illustrative but does not recommend actions as the information may not be appropriate to all situations. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. Links to other sites are provided for your convenience. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not endorse, verify or attest to the accuracy of the content of the web sites that are linked and accept no responsibility for their use or content. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not provide tax, accounting or legal advice.