Social Security Filing Strategies
Making the right decision of when to turn on your social security benefit is critical. The wrong decision could cost you tens of thousands of dollars over the long run. Given all the variables surrounding this decision, what might be the right decision for one person may be the wrong decision for another. This article will cover some of the key factors to
Making the right decision of when to turn on your social security benefit is critical. The wrong decision could cost you tens of thousands of dollars over the long run. Given all the variables surrounding this decision, what might be the right decision for one person may be the wrong decision for another. This article will cover some of the key factors to consider:
Normal Retirement Age
First, you have to determine your "Normal Retirement Age" (NRA). This is listed on your social security statement in the "Your Estimated Benefits" section. If you were born between 1955 – 1960, your NRA is between age 66 – 67. If you were born 1960 or later, your NRA is age 67. You can obtain a copy of your statement via the social security website.
Before Normal Retirement Age
You have the option to turn on social security prior to your normal retirement age. The earliest you can turn on social security is age 62. However, they reduce your social security benefit by approximately 7% per year for each year prior to your normal retirement age. See the chart below from USA Today which illustrates an individual with a normal retirement age of 66. If they turn on their social security benefit at age 62, they would only receive 75% of their full benefit. This reduction is a permanent reduction. It does not increase at a later date, outside of the small cost of living increases.
The big questions is: “If I start taking it age 62, at what age is the breakeven point?” Remember, if I turn on social security at 62 and my normal retirement age is 66, I have received 4 years of payments from social security. So at what age would I be kicking myself wishing that I had waited until normal retirement age to turn on my benefit. There are a few different ways to calculate this accounting for taxes, the rates of return on other retirement assets, inflations, etc. but in general it’s sometime between the ages of 78 and 82.
Since the breakeven point may be in your early 80’s, depending on your health, and the longevity in your family history, it may or may not make sense to turn on your benefit early. If we have a client that is in ok health but not great health and both of their parents passed way prior to age 85, then it may make sense to for them to turn on their social security benefit early. We also have clients that have pensions and turning on their social security benefit early makes the different between retiring now or have to work for 5+ more years. As long as the long-term projections work out ok, we may recommend that they turn on their social security benefit early so they can retire sooner.
Are You Still Working?
This is a critical question for anyone that is considering turning on their social security benefits early. Why? If you turn on your social security benefit prior to reaching normal retirement age, there is an “earned income” penalty if you earn over the threshold set by the IRS for that year. See the table listed below:
In 2016, for every $2 that you earned over the $15,720 threshold, your social security was reduced by $1. For example, let’s say I’m entitled to $1,000 per month ($12,000 per year) from social security at age 62 and in 2016 I had $25,000 in W2 income. That is $9,280 over the $15,720 threshold for 2016 so they would reduce my annual benefit by $4,640. Not only did I reduce my social security benefit permanently by taking my social security benefit prior to normal retirement age but now my $12,000 in annual social security payments they are going to reduce that by another $4,640 due to the earned income penalty. Ouch!!!
Once you reach your normal retirement age, this earned income penalty no longer applies and you can make as much as you want and they will not reduce your social security benefit.
Because of this, the general rule of thumb is if you are still working and your income is above the IRS earned income threshold for the year, you should hold off on turning on your social security benefits until you either reach your normal retirement age or your income drops below the threshold.
Should I Delay May Benefit Past Normal Retirement Age
As was illustrated in first table, if you delay your social security benefit past your normal retirement age, your benefit will increase by approximately 8% per year until you reach age 70. At age 70, your social security benefit is capped and you should elect to turn on your benefits.
So when does it make sense to wait? The most common situation is the one where you plan to continue working past your normal retirement age. It’s becoming more common that people are working until age 70. Not because they necessarily have too but because they want something to keep them busy and to keep their mind fresh. If you have enough income from employment to cover you expenses, in many cases, is does make sense to wait. Based on the current formula, your social security benefit will increase by 8% per year for each year you delay your benefit past normal retirement age. It’s almost like having an investment that is guaranteed to go up by 8% per year which does not exist.
Also, for high-income earners, a majority of their social security benefit will be taxable income. Why would you want to add more income to the picture during your highest tax years? It may very well make sense to delay the benefit and allow the social security benefit to increase.
Death Benefit
The social security death benefit also comes into play as well when trying to determine which strategy is the right one for you. For a married couple, when their spouse passes away they do not continue to receive both benefits. Instead, when the first spouse passes away, the surviving spouse will receive the “higher of the two” social security benefits for the rest of their life. Here is an example:
Spouse 1 SS Benefit: $2,000
Spouse 2 SS Benefit: $1,000
If Spouse 1 passes away first, Spouse 2 would bump up to the $2,000 monthly benefit and their $1,000 monthly benefit would end. Now let’s switch that around, let’s say Spouse 2 passes away first, Spouse 1 will continue to receive their $2,000 per month and the $1,000 benefit will end.
If social security is a large percentage of the income picture for a married couple, losing one of the social security payments could be detrimental to the surviving spouse. Due to this situation, it may make sense to have the spouse with the higher benefit delay receiving social security past normal retirement to further increase their permanent monthly benefit which in turn increases the death benefit for the surviving spouse.
Spousal Benefit
The “spousal benefit” can be a powerful filing strategy. If you are married, you have the option of turning on your benefit based on your earnings history or you are entitled to half of your spouse’s benefit, whichever benefit is higher. This situation is common when one spouse has a much higher income than the other spouse.
Here is an important note. To be eligible for the spousal benefit, you personally must have earned 40 social security “credits”. You receive 1 credit for each calendar quarter that you earn a specific amount. In 2016, the figure was $1,260. You can earn up to 4 credits each calendar year.
Another important note, under the new rules, you cannot elect your spousal benefit until your spouse has started receiving social security payments.
Here is where the timing of the social security benefits come into play. You can turn on your spousal benefit as early as 62 but similar to the benefit based on your own earnings history it will be reduce by approximately 7% per year for each year you start the benefit prior to normal retirement age. At your normal retirement age, you are entitled to receive your full spousal benefit.
What happens if you delay your spousal benefit past normal retirement age? Here is where the benefit calculation deviates from the norm. Typically when you delay benefits, you receive that 8% annual increase in the benefits up until age 70. The spousal benefit is based exclusively on the benefit amount due to your spouse at their normal retirement age. Even if your spouse delays their social security benefit past their normal retirement age, it does not increase the 50% spousal benefit.
Here is the strategy. If it’s determine that the spousal benefit will be elected as part of a married couple’s filing strategy, since delaying the start date of the benefits past normal retirement age will only increase the social security benefit for the higher income earning spouse and not the spousal benefit, in many cases, it does not make sense to delay the start date of the benefits past normal retirement age.
Divorce
For divorced couples, if you were married for at least 10 years, you can still elect the spousal benefit even though you are no longer married. But you must wait until your ex-spouse begins receiving their benefits before you can elect the spousal benefit.
Also, if you were married for at least 10 years, you are also entitled to the death benefit as their ex-spouse. When your ex-spouse passes away, you can notify the social security office, elect the death benefit, and you will receive their full social security benefit amount for the rest of your life instead of just 50% of their benefit resulting from the “spousal benefit” calculation.
Whether or not your ex-spouse remarries has no impact on your ability to elect the spousal benefit or death benefit based on their earnings history.
Consult A Financial Planner
Given all of the variables in the mix and the importance of this decision, we strongly recommend that you consult with a Certified Financial Planner® before making your social security benefit elections. While the interaction with a fee-based CFP® may cost you a few hundred dollars, making the wrong decision regarding your social security benefits could cost you thousands of dollars over your lifetime. You can also download a Financial Planner Budget Worksheet to give you that extra help when sorting out your finances and monthly budgeting.
About Michael.........
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
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Social Security Loophole: Age 62+ With Kids In High School
There is a little known loophole in the social security system for parents that are age 62 or older with children still in high school or younger. Since couples are having children later in life this situation is becoming more common and it could equal big dollars for families that are aware of this social security filing strategy.
There is a little known loophole in the social security system for parents that are age 62 or older with children still in high school or younger. Since couples are having children later in life this situation is becoming more common and it could equal big dollars for families that are aware of this social security filing strategy.
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Second, if you are still working and your earned income exceeds certain thresholds this filing strategy may not be advantageous due to the earned income penalty. They reduce your social security benefit by $1 for every $2 earned over a given threshold ($16,920 in 2017). Not only is your social security benefit reduce but also the benefit to your dependents.
Due to these restrictions, this filing strategy yields that greatest benefit to parents that are either fully or partially retired, age 62 or older, with a child or children below the age of 18.
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
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This question comes up a lot when a parent makes a cash gift to a child or when a grandparent gifts to a grandchild. When you make a cash gift to someone else, who pays the tax on that gift? The short answer is “typically no one does”. Each individual has a federal “lifetime gift tax exclusion” of $5,400,000 which means that I would have to give
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How is my Social Security Benefit Calculated?
The top two questions that we receive from individuals approaching retirement are:
What amount will I received from social security?
When should I turn on my social security benefits?
The top two questions that we receive from individuals approaching retirement are:
What amount will I received from social security?
When should I turn on my social security benefits?
Are you eligible to receive benefits?
As you work and pay taxes, you earn Social Security “credits.” In 2015, you earn one credit for each $1,220 in earnings—up to a maximum of four credits a year. The amount of money needed to earn one credit usually goes up every year. Most people need 40 credits (10 years of work) to qualify for benefits.
When will I begin receiving my social security benefit?
You are entitled to your full social security benefit at your “Normal Retirement Age” (NRA). Your NRA varies based on your date of birth. Below is the chart that social security uses to determine your “normal retirement age” or “full retirement age”:
For example, if you were born in 1965, your NRA would be 67. At 67, you would be eligible for your full retirement benefit.
Delayed Retirement or Early Retirement
You can claim benefits as early as age 62, but your monthly check will be cut by 25% for the rest of your life. The way the math works out, for each year you take your social security benefit prior to your normal retirement age, you benefit is permanently reduce by 6% for each year you take it prior to your NRA.
On the opposite end of that scenario, if you delay claiming past your NRA, you will get a delayed credit of approximately 8% per year plus cost of living adjustments.
There are a number of variables that factor into this decision as to when to turn on your benefit. Some of the main factors are:
Your health
Do you plan to keep working?
What is your current tax bracket?
The amount of retirement savings that you have
Income difference between spouses
What amount will I receive from social security?
Social security uses a fairly complex formula for calculating social security retirement benefits but the short version is the formula uses your highest 35 years of income. If you have less than 35 years are income, zeros are entered into the average for the number of years you are short of 35 years of income. They also apply an inflation adjustment to your annual earnings in the calculation.
You can obtain your Social Security statement by creating an account at www.ssa.gov. Your statement contains lots of valuable information, such as:
Your estimated benefit amount at full retirement age
Eligibility for benefits
A detailed history of how much you've earned each year
Keep in mind that the figures in your statement are just estimates, and your eventual benefit amount could be quite different, especially if you're relatively young now.
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
Qualified Charitable Distributions are an advanced tax strategy used by individuals who are age 70½ or older who typically make annual contributions to their church, charity, or other not-for-profit organizations. QCDs allow individuals who have pre-tax IRAs to send money directly from their IRA to their charity of choice, and they avoid having to pay tax on those distributions. However, a client recently asked an excellent question:
“Can you process a qualified charitable distribution from an Inherited IRA? If yes, does that QCD also count toward the annual RMD requirement?”
Squarespace Excerpt: As individuals approach retirement, they often begin reviewing their annual expenses, looking for ways to trim unnecessary expenses so their retirement savings last as long as possible now that their paychecks are about to stop for their working years. A common question that comes up during these client meetings is “Should I get rid of my life insurance policy now that I will be retiring?”
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Self-employed individuals have a lot of options when it comes to deducting expenses for their vehicle to offset income from the business. In this video we are going to review:
1) What vehicle expenses can be deducted: Mileage, insurance, payments, registration, etc.
2) Business Use Percentage
3) Buying vs Leasing a Car Deduction Options
4) Mileage Deduction Calculation
5) How Depreciation and Bonus Depreciation Works
6) Depreciation recapture tax trap
7) Can you buy a Ferreri through the business and deduct it? (luxury cars)
8) Tax impact if you get into an accident and total the vehicle
The Social Security Administration recently announced that the cost-of-living adjustment (COLA) for 2025 will only be 2.5% for 2025. That is a much lower COLA increase than we have seen in the past few years, with a COLA increase of 3.2% in 2024 and an increase of 8.7% in 2023. According to the Social Security Administration, the 2.5% increase in 2025 will result, on average, in a $50 per month increase to social security recipients.
When you separate service from an employer, you have to make decisions with regard to your 401K plan. It’s important to understand the pros and cons of each option while also understanding that the optimal solution often varies from person to person based on their financial situation and objectives. The four primary options are:
1) Leave it in the existing 401(k) plan
2) Rollover to an IRA
3) Rollover to your new employer’s 401(k) plan
4) Cash Distribution
Picking the right stocks to invest in is not an easy process but all too often I see retail investors make the mistake of narrowing their investment research to just stocks that pay dividends. This is a common mistake that investors make and, in this article, we are going to cover the total return approach versus the dividend payor approach to investing.
There is a sea change happening in the investment industry where the inflows into ETF’s are rapidly outpacing the inflows into mutual funds. When comparing ETFs to mutual funds, ETFs sometimes offer more tax efficiency, trade flexibility, a wider array of investment strategies, and in certain cases lower trading costs and expense ratios which has led to their rise in popularity among investors. But there are also some risks associated with ETFs that not all investors are aware of……..
While pre-tax contributions are typically the 401(k) contribution of choice for most high-income earners, there are a few situations where individuals with big incomes should make their deferrals contribution all in Roth dollars and forgo the immediate tax deduction.
The Fed cut the Federal Funds Rate by 0.50% on September 18, 2024 which is not only the first rate cut since the Fed started raising rates in March 2022 but it was also a larger rate cut than the census expected. The consensus going into the Fed meeting was the Fed would cut rates by 0.25% and they doubled it. This is what the bigger Fed rate cut historically means for the economy
The most common questions that I receive when clients are about to purchase their next car is “should I buy it or lease it?” The answer depends on a number of factors including how long do you typically keep cars for, how many miles do you drive each year, the amount of the down payment, maintenance considerations, or do you have any teenagers in the family that will be driving soon?
A question I’m sure to address during employee retirement presentations is, “How Much Should I be Contributing?”. In this article, I will address some of the variables at play when coming up with your number and provide detail as to why two answers you will find searching the internet are so common.
There are special non spouse beneficiary rules that apply to minor children when they inherit retirement accounts. The individual that is assigned is the custodian of the child, we'll need to assist them in navigating the distribution strategy and tax strategy surrounding they're inherited IRA or 401(k) account. Not being aware of the rules can lead to IRS tax penalties for failure to take requirement minimum distributions from the account each year.
When you are the successor beneficiary of an Inherited IRA the rules are very complex.
A common mistake that beneficiaries of retirement accounts make when they inherit either a Traditional IRA or 401(k) account is not knowing that if the decedent was required to take an RMD (required minimum distribution) for the year but did not distribute the full amount before they passed, the beneficiaries are then required to withdrawal that amount from the retirement account prior to December 31st of the year they passed away. Not taking the RMDs prior to December 31st could trigger IRS penalties unless an exception applies.
In July 2024, the IRS released its long-awaited final regulations clarifying the annual RMD (required minimum distribution) rules for non-spouse beneficiaries of retirement accounts that are subject to the new 10-year rule. But like most IRS regulations, it’s anything but simple and straightforward.
The Fed made a significant policy error last week by deciding not to cut the Fed Funds rate and the stock market is now responding to that error via the selloff we have seen over the past week. Unfortunately, this policy error is nothing new. Throughout history, the Fed typically waits too long to begin reducing interest rates after inflation has already abated and they seem to be on that path again.
Investors have to be ready for many surprises in 2024. While the US economy was able to escape a recession in 2023, if anything, it has increased the chances of either a recession or a market pullback in the first half of 2024.
Individuals who experience a hurricane, flood, wildfire, earthquake, or other type of natural disaster may be eligible to request a Qualified Disaster Recovery Distribution or loan from their 401(k) or IRA to assist financially with the recovery process. The passing of the Secure Act 2.0 opened up new distribution and loan options for individuals whose primary residence is in an area that has been officially declared a “Federal Disaster” area.
With student loan payments set to restart in October 2023, the Biden Administration recently announced a new student loan income-based repayment plan called the SAVE Plan. Not only is the SAVE plan going to significantly lower the required monthly payment for both undergraduate and graduate student loans but there is also a 10-year to 25-year forgiveness period built into the new program. While the new SAVE program is superior in many ways when compared to the current student loan repayment options, it will not be the right fit for everyone.
In the past, companies have been allowed to limit access to their 401(k) plan to just full-time employees but that is about to change starting in 2024. With the passing of the Secure Act, beginning in 2024, companies that sponsor 401(K) plans will be required to allow part-time employees to participate in their qualified retirement plans.
There has been a lot of confusion surrounding the required minimum distribution (RMD) rules for non-spouse, beneficiaries that inherited IRAs and 401(k) accounts subject to the new 10 Year Rule. This has left many non-spouse beneficiaries questioning whether or not they are required to take an RMD from their inherited retirement account prior to December 31, 2023. Here is the timeline of events leading up to that answer
If you are a W2 employee who makes over $160,200 per year and you have multiple employers or you switched jobs during the year, or you have both a W2 job and a self-employment gig, your employer(s) may be withholding too much FICA tax from your wages and you may be due a refund of those FICA tax overpayments. Requesting a FICA tax refund requires action on your part and an understanding of how the FICA tax is calculated.
401(K) plans with over 100 eligible plan participants are considered “large plans” in the eyes of DOL and require an audit to be completed each year with the filing of their 5500. These audits can be costly, often ranging from $8,000 - $30,000 per year.
Starting in 2023, there is very good news for an estimated 20,000 401(k) plans that were previously subject to the 5500 audit requirement. Due to a recent change in the way that the DOL counts the number of plan participants for purposes of assessing a large plan filer status, many plans that were previously subject to a 401(k) audit, will no longer require a 5500 audit for plan year 2023 and beyond.
Toward the end of 2022 and for the first half of this year, many economics and market analysts were warning investors of a recession starting within the first 6 months of 2023. Despite those widespread warnings, the S&P 500 Index is up 16% YTD as of July 3, 2023, notching one of the strongest 6-month starts to a year in history. So why have so many people been wrong about their prediction and off by so much?
Parents that are used to completing the FAFSA application for their children are in for a few big surprises starting in 2023. Not only is the FAFSA application being completely revamped but the FAFSA calculation itself is being changed which could result in substantially lower financial aid awards for many college-bound students.
It’s not an uncommon occurrence when a retiree turns on their social security benefits, but then all of a sudden take on either part-time or full-time employment, begin making more income than they expected, and they start searching for options to suspend their social security benefits until a later date.
The good news is there are “do-over” options for your social security benefit that exist depending on your age and how long it’s been since you started receiving your social security benefits. The are two different strategies:
I recently published an article called “Don’t Gift Your House To Your Children” which highlighted the pitfalls of gifting your house to your kids versus setting up a Medicaid Trust to own your house, as an asset protection strategy to manage the risk of a long-care care event taking place in the future. That article prompted a few estate attorneys to reach out to me to present a third option which involves gifting your house to your children with a life estate. While the life estate does solve some of the tax issues of gifting the house to your kids with no life estate, there are still issues that persist even with a life estate that can be solved by setting up a Medicaid trust to own your house.
Do I Have to Pay Taxes on my Social Security Benefit?
If your “combined income” exceeds specific annual limits, you may owe federal income taxes on up to 50% or 85% of your Social Security benefits. The limits for federal income tax purposes are listed in the chart below.
If your “combined income” exceeds specific annual limits, you may owe federal income taxes on up to 50% or 85% of your Social Security benefits. The limits for federal income tax purposes are listed in the chart below.
The federal income thresholds are not indexed for inflation, so they are the same every year. “Combined income” is defined as adjusted gross income plus any tax-exempt interest plus 50% of your Social Security Benefit. Some states tax Social Security Benefits, whereas others do not tax them. See the chart below:
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
A common financial mistake that I see people make when attempting to protect their house from a long-term care event is gifting their house to their children. While you may be successful at protecting the house from a Medicaid spend-down situation, you will also inadvertently be handing your children a huge tax liability after you pass away. A tax liability, that with proper planning, could be avoided entirely.
On December 23, 2022, Congress passed the Secure Act 2.0, which moved the required minimum distribution (RMD) age from the current age of 72 out to age 73 starting in 2023. They also went one step further and included in the new law bill an automatic increase in the RMD beginning in 2033, extending the RMD start age to 75.
Not many people realize that if you are age 62 or older and have children under the age of 18, your children are eligible to receive social security payments based on your earnings history, and it’s big money. However, social security does not advertise this little know benefit, so you have to know how to apply, the rules, and tax implications.
It’s becoming more common for retirees to take on small self-employment gigs in retirement to generate some additional income and to stay mentally active and engaged. But, it should not be overlooked that this is a tremendous wealth-building opportunity if you know the right strategies. There are many, but in this article, we will focus on the “Solo(k) strategy
A 529 account owned by a grandparent is often considered one of the most effective ways to save for college for a grandchild. But in 2023, the rules are changing………
If you are age 65 or older and self-employed, I have great news, you may be able to take a tax deduction for your Medicare Part A, B, C, and D premiums as well as the premiums that you pay for your Medicare Advantage or Medicare Supplemental coverage.
When you retire and turn on your pension, you typically have to make a decision as to how you would like to receive your benefits which includes making a decision about the survivor benefits. Do you select….
More and more retires are making the decision to keep their primary residence in retirement but also own a second residence, whether that be a lake house, ski lodge, or a condo down south. Maintaining two houses in retirement requires a lot of additional planning because you need to be able to answer the following questions:
Many individuals that have long-term care insurance policies are beginning to receive letters in the mail notifying them that that their insurance premiums are going up by 50%, 70%, or more in some cases. This is after many of the same policyholders have experienced similar size premium increases just a few years ago. In this article I’m going to explain……
The order in which you take distributions from your retirement accounts absolutely matters in retirement. If you don’t have a formal withdraw strategy it could end up costing you in more ways than one. Click to read more on how this can effect you.
Medicare has important deadlines that you need to be aware of during your initial enrollment period. Missing those deadlines could mean gaps in coverage, penalties, and limited options when it comes to selecting a Medicare
Social Security payments can sometimes be a significant portion of a couple’s retirement income. If your spouse passes away unexpectedly, it can have a dramatic impact on your financial wellbeing in retirement. This is especially
As you approach age 65, there are a lot of very important decisions that you will have to make regarding your Medicare coverage. Since Medicare Parts A & B by itself have deductibles, coinsurance, and no maximum out of pocket
The SECURE Act was passed into law on December 19, 2019 and with it came some big changes to the required minimum distribution (“RMD”) requirements from IRA’s and retirement plans. Prior to December 31, 2019, individuals
As you approach age 65, there are very important decisions that you will have to make regarding your Medicare coverage. Whether you decide to retire prior to age 65, continue to work past age 65, or have retiree health benefits,
Once there is no longer a paycheck, retirees will typically meet expenses with a combination of social security, withdrawals from retirement accounts, annuities, and pensions. Social security, pensions, and annuities are usually fixed amounts, while withdrawals from retirement accounts could fluctuate based on need. This flexibility presents
If you live in an unfriendly tax state such as New York or California, it’s not uncommon for your retirement plans to include a move to a more tax friendly state once your working years are over. Many southern states offer nicer weather, no income taxes, and lower property taxes. According to data from the US Census Bureau, more residents
Inherited IRA’s can be tricky. There are a lot of rules surrounding;
Establishment and required minimum distribution (“RMD”) deadlines
Options available to spouse and non-spouse beneficiaries
Strategies for deferring required minimum distributions
Special 60 day rollover rules for inherited IRA’s
Given the downward spiral that GE has been in over the past year, we have received the same question over and over again from a number of GE employees and retirees: “If GE goes bankrupt, what happens to my pension?” While it's anyone’s guess what the future holds for GE, this is an important question that any employee with a pension should
Whether you are about to retire or if you were just notified that your company is terminating their pension plan, making the right decision with regard to your pension plan payout is extremely important. It's important to get this decision right because you only get one shot at it. There are a lot of variables that factor into choosing the right option.
The number is higher than you think. When you total up the deductibles and premiums for Medicare part A, B, and D, that alone can cost a married couple $7,000 per year. We look at that figure as the baseline number. That $7,000 does not account for the additional costs associated with co-insurance, co-pays, dental costs, or Medigap insurance
When you turn 70 1/2, you will have the option to process Qualified Charitable Distributions (QCD) which are distirbution from your pre-tax IRA directly to a chiartable organizaiton. Even though the SECURE Act in 2019 changed the RMD start age from 70 1/2 to age 72, your are still eligible to make these QCDs beginning the calendar year that you
The SECURE Act was signed into law on December 19, 2019 which completely changed the distribution options that are available to non-spouse beneficiaries. One of the major changes was the elimination of the “stretch provision” which previously allowed non-spouse beneficiaries to rollover the balance into their own inherited IRA and then take small
Making the right decision of when to turn on your social security benefit is critical. The wrong decision could cost you tens of thousands of dollars over the long run. Given all the variables surrounding this decision, what might be the right decision for one person may be the wrong decision for another. This article will cover some of the key factors to
If you are turning age 72 this year, this article is for you. You will most likely have to start taking required minimum distributions from your retirement accounts. This article will outline:
There is a little known loophole in the social security system for parents that are age 62 or older with children still in high school or younger. Since couples are having children later in life this situation is becoming more common and it could equal big dollars for families that are aware of this social security filing strategy.
There are three key estate documents that everyone should have: Will, Health Proxy, Power of Attorney, If you have dependents, such as a spouse or children, the statement above graduates from “should have” to “need to
This question comes up a lot when a parent makes a cash gift to a child or when a grandparent gifts to a grandchild. When you make a cash gift to someone else, who pays the tax on that gift? The short answer is “typically no one does”. Each individual has a federal “lifetime gift tax exclusion” of $5,400,000 which means that I would have to give
Many of our clients own individual stocks that they either bought a long time ago or inherited from a family member. If they do not need to liquidate the stock in retirement to supplement their income, the question comes up “should I just gift the stock to my kids while I’m still alive or should I just let them inherit it after I pass away?” The right answer is