Kiplinger\'s Personal Finance 02.2020

02/2020 KIPLINGER’S PERSONAL FINANCE 7

Long-term-care claim battles.

I am handling the insurance

claim for my 94-year-old

mother, who now resides

full-time in a memory-

care facility (“Long-Term-

Care Claims: Avoid the

Obstacles,” Dec.). As a re-

tired insurance agent with

more than 30 years’ experi-

ence, rarely have I been

more frustrated than deal-

ing with the insurer han-

dling my mother’s claim.

I am having to battle and

appeal almost every step of

the way, while they seem to

interpret the policy as they

see fit and ignore policy lan-

guage if it doesn’t suit their

needs. I am convinced that

typical consumers without

my experience are unlikely

to understand what is hap-

pening and will receive less

than they are entitled to.

DAVID MASSEY

SAN ANTONIO

ESG fund performance. At the

end of “Should Shareholders

Share the Wealth?” (“Ahead,”

your values (and your poli-

tics), but the article ended

with a statement from the

International Monetary

Fund that “the performance

of socially responsible funds

was comparable to that of

traditional stock funds.” Not

so, according your May 2019

issue. The “ESG-Focused”

list of mutual funds showed

a category average for the

one-year total return sig-

nificantly below the annu-

alized total return for the

S&P 500. It also appears

that a “socially responsible”

investor must pay for the

privilege of lesser perfor-

mance, as the expense

ratios shown for the Top

10 ESG funds are in many

cases twice as much as

the expense ratios of well-

performing “traditional”

funds frequently recom-

mended by Kiplinger’s.

SAMUEL R. LEWIS

OAK HILL, VA.

The risk of hedging. James

K. Glassman’s advice about

protecting investments in

dangerous markets (“Street

Smart,” Dec.) left out two

things I have heard from

many advisers. First, risky

times can warrant selling

some stock and increasing

cash assets such as money

market funds and CDs that

offer predictable returns.

Second, most inverse funds,

such as ProShares Short

S&P 500 that Glassman

mentions, are more suited

to day traders and expert

investors. The prospectus

notes: “Investors in the

Fund should actively man-

age and monitor their in-

vestments, as frequently

as daily. An investor in the

Fund could potentially lose

the full principal value of

his/her investment within

a single day.”

MAUREEN M. SMITH

MINNEAPOLIS

Ta x i n g 4 0 1(k) l o a n s. Borrow-

ing from a traditional (non-

Roth) 401(k) has an addi-

tional problem you didn’t

address: double taxation

(“Millennial Money,” Nov.).

You must pay taxes on the

money you earn to repay

the loan, and you are taxed

again when you withdraw

your savings.

JIM MUZZIN

SHELBY TOWNSHIP, MICH.

CONTACT US

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Uber Law Ripple Effect

Regarding California Assembly Bill 5, which reclassifies a group

of independent contractors as employees (“Ahead,” Dec.): I do tax

returns for a number of individuals who work for Uber and Lyft. In

my experience, they end up with very little income once expenses

are subtracted from their payments. As self-employed contractors,

their small-business tax return (Schedule C) allows them to subtract

expenses such as cell-phone charges, fees and mileage in support

of their passengers. None of those unreimbursed employee ex-

penses will be deductible from their tax returns as W-2 employees.

The result will be much higher reported incomes and much larger

tax withholding, and thus a significant reduction in the cash they

can spend. As employees, they will still wear out their cars but won’t

get the benefit of expensing the wear and tear resulting from the

extreme mileage.

WILLIAM HICKS

GAITHERSBURG, MD.

Dec.), you wrote that “a

growing body of evidence ...

suggests you don’t have to

sacrifice returns to invest

in companies that align

with your values.” Obvi-

ously, that depends upon

Q READER^ POLL

How much do you expect

to spend in retirement?

32

For help

estimating

retirement

spending, turn

to page 44.

33 %

56 %

11 %

Less

than I

spend

now

About

the same

as I spend

now

More

than I

spend

now

READER FEEDBACK

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