Category: Financial and taxes in retirement
September 29, 2015 -- Earlier this month we ran an article about starting your own business in retirement. This will continue the series, but this time we will concentrate on other ways to make extra money once you retire. With so many baby boomers concerned about their retirement finances (only 46% of members in our recent survey say that their expected retirement income will allow them to continue their pre-retirement lifestyles), we expect it is a topic many of you will be interested in.
There are generally 2 ways to put the extra money in your pocket that affords a worry-free retirement. You can either work for someone else, or you can be your own boss. Each of them has their particular advantages and disadvantages. Let's look at both.
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Published on September 28, 2015
Comments 8
Category: Financial and taxes in retirement
September 21, 2015 -- We thought this topic would be easy. Do some basic research, then come up with a list of the worst states for taxes on retirement. But after looking at the research we had to say - not so fast! There are so many considerations depending on your individual circumstances that any cut and dried, one size fits all approach is not going to be useful. All of these factors, for example, will have a major effect on your tax bill from one state to another: your income, the value of your home, the type of retirement income you get (and where it comes from), and whether you file singly or jointly. Yet we will try to come up with such a list, thinking of a prototypical couple that might, or might not, be similar to your situation. In this case we are focusing on worst states for retirement income taxes, and ignoring other taxes like those on property.
Back in 2011 we ran a similar exercise. In that one we had a hypothetical retirement couple (both over 65) who derives their income from a roughly equal combination of social security, (non-government) pension, and investment income. At that time we arbitrarily computed income taxes for 2 income levels: $60,000 and $100,000. We then applied all the standard, personal, and over 65 exemptions we could find. These income levels are obviously
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Published on September 23, 2015
Comments 40
Category: Financial and taxes in retirement
September 9, 2015 -- Have you been wondering how your retirement income stacks up to that of other retired people in your situation. Or whether it will be enough to provide your pre-retirement lifestyle? Well, thanks to the almost 1500 community-minded members who took the time to contribute their valuable data and insights to last week's "How Much Do You Expect to Receive in Retirement" survey, now you will know. If you didn't complete it you owe these folks a big thank you.
As promised, here is a detailed report on what the survey turned up. It includes links to hundreds of individual comments to various questions on the survey. Those include the one about your retirement budget preparations, and how confident you are that the income level you EXPECT to receive will be enough to maintain your pre-retirement standard of living. You will find a list of our previous survey reports at the end of the article.
Background
This is the first time we have asked you for data about your retirement income expectations, and how that agrees with what you think you will need. We were also intrigued with the question about whether you intend to move out of state, and if finances are related to that
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Published on September 8, 2015
Comments 17
Category: Financial and taxes in retirement
August 31, 2015 — Charles, one of our members, recently asked an interesting question: “Is 5000/month enough to live on”? To help answer it we have prepared a Retirement Income Survey. We had a great response to this survey, with almost 1500 people taking it. You can see our detailed…
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Published on August 31, 2015
Comments 28
Category: Financial and taxes in retirement
August 18, 2015 -- Many of us don't have the interest, the background, or the perseverance to do a great job managing our retirement money. As a result, we often turn to a financial advisor for help with planning and making smart investment choices for the retirement funds that are so important to our retirement security. But before you sign up with someone from the yellow pages, that fabulous guy the boss recommends, or your brother-in-law, here are some things you should be doing to protect and maximize your nest egg.
1. Don't get fleeced
The sad fact is that there are many unethical people out there who would love to separate you from your hard earned retirement savings. They very often come with glowing references, testimonials, track records, advertising, and impressive credentials. And thanks to those weapons, thousands of
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Published on August 17, 2015
Comments 16
Category: Financial and taxes in retirement
July 28, 2015 -- If you were hoping for great news in the annual report from the Social Security Trustees, you will be disappointed - the program's trust funds will still be exhausted in less than 20 years. However if you were looking for a doomsday report, you won't find that either. Even when the Social Security trust funds are exhausted at the current projection date of 2034, current revenues will still be able to fund about 75% of promised benefits. But to avoid significant cuts to benefits, the program needs to be reformed sooner rather than later.
Here are some other facts from the Trustees Full Report:
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Published on July 28, 2015
Comments 12
Category: Financial and taxes in retirement
May 30, 2015 — One of the most important subjects about retirement is how much you can take out of your retirement funds. Withdraw too much too soon, and you run out of money for your old age. Take out too little, and you shortchange your fun - plus leave more than you intend to your relatives and/or the government. This article will explore some new competing theories to the popular 4% rule, which has long been viewed as the gold standard for retirement withdrawals.
One of the key assumptions about the 4% rule, which theorizes you can almost always withdraw 4% of your retirement savings every year without danger of exhausting them, was that your investments would at least earn something close to 4% over the long haul. The so called 4% rule is credited to
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Published on May 29, 2015
Comments 55
Category: Financial and taxes in retirement
March 27, 2015 -- So you are pretty sure you are financially literate and no one could scam you - better watch out! A recent study by researchers at DePaul University and the Rush University Medical Center came up with this scary result: Seniors who got financially related answers wrong, but were the most confident they got them right, were more often victimized by fraud. Fraud victims scored 5.39 on the overconfidence scale, vs. 4.21 for non-fraud victims. The authors of the study believe that this overconfidence, combined with declining cognitive skills, is a underlying reason for an alarming
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Published on March 26, 2015
Comments 13
Category: Financial and taxes in retirement
March 23, 2015 -- It is no secret that there are millions of baby boomers who are wondering how on earth they are ever going to have enough money to retire. From many comments made on this site we know that a lot of you have those worries, so we thought we would help with some examples of reasonable place to retire, along with why it makes sense to downsize.
First, how a cheaper place to live puts money in your pocket
Your home is almost always your biggest expense, usually about 30% of your income. Anything you can do to reduce that is going to help you have a more comfortable retirement. The first thing you need to do in this process is to complete a retirement budget, keeping in mind any potential income sources, including savings or pension (if any), work, and Social Security. If you’re considering additional avenues to supplement your funds, be aware that online casinos no connected with gamstop, while often touted as a quick fix, can carry significant financial risks. You also have to understand what
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Published on March 23, 2015
Comments 39
Category: Financial and taxes in retirement
March 20, 2015 -- If you have a 401(k) and/or an IRA, and you turned 70 and 1/2 last year, you have a very big deadline coming on April 1. That is the date by which you must have taken your first Required Minimum Distribution (RMD), or face significant penalties. A surprising number of people fail to take these distributions. You must also take your regular annual distribution by December 31 this year. All of the money taken from regular
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Published on March 20, 2015
Comments 27
