Category: Financial and taxes in retirement
July 20, 2016 -- The oldest baby boomers, those born in the first post WWII year, are turning 70 this year. To which the IRS is probably saying, "Happy Birthday Boomer", because the U.S. Treasury is about to get billions in tax presents. That's about to happen because Required Minimum Distributions (RMDs) from your retirement funds are required in the year you turn 70 and 1/2. To do the math for you, if you were born in 1946 and your birthday is prior to July 1, you will be 70 and 1/2 in 2016.
If that describes your situation, you must start taking your annual Required Minimum Distribution (RMD) from your IRAs and 401(k)s. This year (the year you turn 70 and 1/2) you could wait until April 1, 2017 to take it, but if you do you will also have to take your 2017 RMD by December 31, 2017.
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Published on July 19, 2016
Comments 5
Category: Financial and taxes in retirement
July 10, 2016 -- This is Part 2 of the results from last week's "How Much Do You Expect to Receive in Retirement" survey. In this installment we will report on the questions having to do with renting, financing, 55+ design features, and general comments about finding a place to retire. Here is where you can see the results from Part 1. Here is the link to the consolidated article of all results to the survey - Members Will Retire Out of State and More. The bottom of the article contains links to all 11 of our previous survey reports on a variety of topics.
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Published on July 9, 2016
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Category: Financial and taxes in retirement
June 23, 2016 -- The 2016 report of the independent Trustees of Social Security is out, and the news is nothing to be too happy about. Both Medicare and Social Security will soon be paying out more than they take in. The only small blessing for those currently receiving Social Security benefits is that it looks like there might be a small COLA (Cost of Living Adjustment) of 0.2% headed their way in 2017. Here are some other takeaways from the report, which make it clear that action is needed to keep benefits at least at current levels:
- Trust Fund reserves in the Social Security program that pays benefits to retirees, spouses, and their survivors (OASI) are projected to become depleted in 2035 (unchanged from last year's report). At that time income
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Published on June 23, 2016
Comments 12
Category: Financial and taxes in retirement
May 25, 2016 -- We've seen a flurry of studies articles over the past few months that suggest that empty nesters aren't doing a good enough job of saving. It seems like once the kids and the costs associated with them are gone, most people spend the extra money instead of save it. The overall findings are troubling, since so many people are expected to have a very hard time maintaining their pre-retirement lifestyles. We just hope you are among the folks who have saved enough!
Here are some of the articles and links:
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Published on May 24, 2016
Comments 43
Category: Financial and taxes in retirement
February 16, 2016 -- Even if you are not retired yet you have probably received several statements from the Social Security Agency over the years. That is because the Agency mails Statements to workers at ages 25, 30, 35, 40, 45, 50, 55, 60 and older. They go out three months prior to their birthday (but not if they receive Social Security benefits or have a my Social Security account).
The statement contains an amazing amount of helpful information. Unfortunately, that info is often ignored or misunderstood. In fact one survey found
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Published on February 16, 2016
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Category: Financial and taxes in retirement
February 10, 2016 -- The sad truth is that millions of baby boomers are ending up retired well before their target age, which is usually around 65. In fact a 2015 study from the Employee Benefit Research Institute found that 50% of retirees stopped working earlier than they had planned. Layoffs or health issues are usually the culprit. This usually produces unpleasant results for the newly, and unexpectedly, retired: Four or five years of planned retirement savings don't happen; and folks have to find a way to live without a steady income. A common result is that 41% of American workers were not too or not at all confident of having enough money for retirement in 2015.
The easy solution would be to find a new job. If only that were
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Published on February 9, 2016
Comments 19
Category: Financial and taxes in retirement
February 2, 2016 -- Social Security - so misunderstood. And unfortunately, that misinformation causes many people to make very costly decisions. This article will talk about how one of those decisions - filing early and deciding not to work any more because of fear that earnings will be taken away - can jeopardize financial health. We'll explain that mistake in detail, but first we have to give some background, including how concerns about Obamacare can complicate the decision making. Note: we are not accountants or financial experts. Before you make any important financial decision consider it carefully and get expert help.
Over the years Congress has tweaked Social Security to encourage people to work to at least Normal Retirement Age (66 for most boomers), rather than collecting sooner (the earliest you can claim is at age 62). The thought was to encourage folks to work longer and delay benefits so they have the opportunity to save more money for retirement. And, because they paid more into the SS system, they and their surviving spouses get higher benefits for the rest of their lives. Both factors result in
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Published on February 1, 2016
Comments 58
Category: Financial and taxes in retirement
December 28, 2015 -- You only have a few days left to do it, but you can now once again make a qualified charitable donation from your IRA in 2015, and not have that donation count as taxable income. The re-authorization of The IRA Charitable Rollover provision is one of many outcomes of the Congress's recent Omnibus spending bill (PATH Act of 2015). The provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA). The change is permanently reinstated. The payment must be made directly to the charity from the IRA or 401k.
The problem with this good news is that most
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Published on December 27, 2015
Comments 6
Category: Financial and taxes in retirement
Note: This article compiles information from a Social Security Office or Retirement and Disability Report: Taxation of Social Security Income. Note that we are not tax professionals - consult your accountant or other expert before you make any important decisions on this issue.
December 18, 2015 -- Many of our members are either not aware that they might have to pay taxes on their Social Security benefits, or if they are, not sure how much they might have to pay. This article will try to shed some light on the issue.
Social Security beneficiaries with total income exceeding certain thresholds have been required to claim part of their Social Security benefits as taxable income since 1984. The income thresholds for taxation of benefits have remained unchanged since Congress first established them but, because wages have increased, the proportion of Social Security beneficiaries who must pay federal income tax on their benefits has risen over
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Published on December 19, 2015
Comments 13
Category: Financial and taxes in retirement
December 6, 2015 -- If you have a 401(k) and/or an IRA, and you turned 70 and 1/2 in 2014 or earlier, you have a very big deadline coming December 31. That is the date by which you must take your annual Required Minimum Distribution (RMD), or face significant penalties. A surprising number of people fail to take these distributions. All of the money taken from regular
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Published on December 5, 2015
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