Optimism Builds America

Let me start with five facts about America today:

1. By most standards we are physically safer than we have ever been. Violent crimes are well below the peaks of the late 80s and early 90s. The long-term trend has been toward a safer society in almost every crime category.
2. Material living standards are as high as they have ever been. Americans have access to technology, medical care, communication and consumer goods that would have seemed almost fictional a few decades ago. What your smartphone does for you daily would have required multiple devices costing tens of thousands of dollars just 30 years ago.
3. Unemployment remains historically low. The U.S. unemployment rate averaged 6.2% in the 70s, 7.3% in the 80s, and around 6.2% in the first decade of the 2000s. As of April 2026, the unemployment rate was 4.3% which would have been considered exceptional over the last 50 years.
4. Americans are living longer. The average American life expectancy in 1980 at birth was 73.7 years. Today is approximately 79 years. Even more to the point, life expectancy after reaching age 65 is currently 19.7 years. That’s the highest level on record.
5. American retirement savings and home values have surged. Ten years ago, U.S. household net worth was roughly $100-110 trillion, and in 2025 it was about $175-184 trillion. That’s a 75% increase in a decade.

Setting aside politics, it’s curious that despite these amazing accomplishments over the last several decades we as Americans still hold a negative view as to the state of our country.  A recent survey by the federal government found that Americans are doing okay, but their view of the national economy has fallen sharply. Almost 75% of Americans say they are “doing okay” or “living comfortably” but only 25% rate the national economy as good or excellent.

This is not to downplay the fact that there are many Americans, including children, who are suffering and need lots of financial and emotional support. They can’t be forgotten. But the pessimistic attitude of Americans in general doesn’t help things in my opinion. The explosion of social media and targeted stories and video clips put a lot of focus on the negatives. Additionally, after a few clicks on some of this negative information, the algorithms on your phone continue to direct you to even more negative stories and videos.

All this concerns me because optimism and creativity are the most important elements of American society. About 5 million new business applications are filed annually in America. Every one of those applications started with someone’s idea and confidence that they can make things better for themselves in the future. I know that with the two businesses I started from scratch, I held onto the belief that I could make it work and that I could create something of value for my family and for others. There were some challenging times early on when the only things I could grab on to were my optimism, unwavering confidence, and a stack of bills that I needed to pay.

When you’re scrolling through all the news on your phone, take a minute to find a quote or a video on something optimistic. As management consultant and business author Peter Drucker once said, “The best way to predict the future is to create it.” Let’s create the best future we can for our society.

Fun Fact: Before building one of the world’s most successful companies Walt Disney was fired from a newspaper job because the editor reportedly felt he “lacked imagination and had no good ideas.” Then his first animation company went bankrupt and he struggled financially. Despite losing the rights to a successful cartoon character he had developed, he remained optimistic and while riding the train home he began to develop a new character: Mickey Mouse. Optimism is the secret sauce for almost all success.

Ever Wonder How Michigan Taxes Your Retirement Income? The Answer Isn’t Simple.

Many people assume pensions, IRAs, 401(k)s, and Social Security are all treated the same under Michigan tax law. Historically, that was not always the case, although recent law changes have simplified things for many retirees.  The good news is that Michigan has become much more retiree-friendly in recent years. The bad news is that the rules are still surprisingly technical beneath the surface.

Here is the simplified version:

• Social Security benefits are not taxed by Michigan.
• Historically traditional pensions have generally received the most favorable treatment, especially many public pensions.
• IRA withdrawals and 401(k) distributions now generally qualify for Michigan retirement-income deductions for most retirees under the newer phase-in rules.
• Roth IRA and Roth 401(k) withdrawals are usually Michigan tax-free if they are federally tax-free.

One area that still occasionally creates confusion involves older rollover situations. Historically, Michigan law drew technical distinctions between certain pension benefits, IRAs, and defined-contribution plans. As retirement laws evolved and rollover transactions became more common, some older Treasury guidance was never fully updated, which can still create questions in unusual cases involving lump-sum pension rollovers and commingled retirement accounts.

In most ordinary situations involving IRAs, 401(k)s, employee contributions, and employer matching, most tax practitioners today treat the distributions as qualifying retirement income under Michigan’s newer rules. The more difficult cases usually involve older pension-style plans, governmental plans, or unusual rollover histories.

The practical lesson is simple:

• Keep good rollover records.
• Preserve old pension and 401(k) statements.
• Coordinate major retirement distributions with a knowledgeable CPA.

Michigan retirement taxation today is far more favorable than it was a decade ago, but it still serves as a reminder that retirement tax rules can evolve over time and sometimes the administrative guidance struggles to keep up.

Fun Fact: Michigan did not broadly tax retirement income until 2011. Before that, most retirement income was largely exempt from Michigan income taxes.

The Danger of Planning Too Far Ahead

When I first started drafting estate planning documents in the 1990s, the federal estate tax exemption was only $600,000 per person. Even life insurance death benefits were included in your taxable estate. As a result, many middle-class families needed fairly complicated estate plans just to avoid estate taxes.

Today, the federal estate tax exemption for a married couple is nearly $30 million. That’s a remarkable change in a relatively short period of time — and a reminder that tax laws can change dramatically.

Years ago, I attended an estate tax planning class at Emory University taught by a respected trust and estate law professor. He advocated intentionally paying some estate tax at the death of the first spouse, even though the law allowed families to defer the tax until the second spouse’s death. His math was sophisticated and convincing. The problem? He never anticipated Congress drastically increasing the estate tax exemption. Some families who followed his advice ended up paying estate taxes they ultimately may never have owed.

We saw something similar with the Tax Cuts and Jobs Act of 2017. Because the law was originally scheduled to expire in 2025, many wealthy families rushed to make very large gifts to family members before the exemption potentially dropped. Then the law changed again. With the return of President Donald Trump and the passage of the “One Big Beautiful Bill,” many of those larger exemptions did not expire, but instead became permanent. Some families later realized they may not have needed to move assets so aggressively after all.

The lesson is not that tax planning is unimportant. Taxes matter enormously. The lesson is that predicting what tax laws will look like 10 or 20 years from now is incredibly difficult.

Good planning often means preserving flexibility and keeping your options open — because sometimes the world changes faster than the plan. Whenever you are considering a tax planning technique that’s related to estate or income taxes and the benefits that are touted are many years in the future, make sure you add in a healthy dose of flexibility to the strategy. As the Danish physicist Niels Bohr once said: “Prediction is very difficult, especially if it’s about the future.”

Fun Fact: For those of you who might remember me warning about private equity getting involved in youth sports, local news is reporting that a $3 billion youth sports campus is being planned in Romulus. The proposed development would reportedly span 452 acres and include an 11,000-seat arena, dozens of basketball and volleyball courts, and four hockey rinks. Youth sports are clearly becoming big business for those who can afford it!