Category: Financial and taxes in retirement
February 15, 2022 -- Everybody knows some things about Social Security, the benefit that changed retirement for the good when it was signed into law in 1935. Unfortunately, some of the items many people think they know either aren't true, or are just plain wrong. This misinformation could have a serious and negative impact on the decisions they make, and their ultimate retirement well-being. One of the sources used in this article are the results from our 2020 Social Security IQ Quiz , where we looked at the answers that people tended to get wrong the most.
How many years you work doesn't really affect your Social Security benefit that much.
Only 49% of people who took our 2020 quiz got this answer correct. The choices for how many earning years are used to calculate your benefit were 25, 30, or 35 – and the correct answer is that Social Security calculates your benefit on your highest 35 earning years (adjusted for inflation). While that might not seem that important a detail, it is, because every year you had no earnings counts as a zero!
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Published on February 14, 2022
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Category: Financial and taxes in retirement
January 16, 2022 -- A significant number of workers underestimate their financial needs in retirement, and that includes calculating how much they will receive from Social Security. As a result they often retire too early and start taking their Social Security before they maximize their benefit. The end result is that they face an income shortfall in their retirement years. A new study from the Boston College Center for Retirement Research has concluded that taking a non-traditional job late in one's career can help retirees avoid a serious shortfall in replacement income, and thus have a more comfortable retirement. Replacement income is defined as the ratio of a worker’s retirement income to pre-retirement income.
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Published on January 15, 2022
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Category: Financial and taxes in retirement
January 5, 2022 -- With inflation going up and just about everything getting more expensive, retirement is getting even more difficult than ever. So the beginning of the year seems like a great time to come up with some ideas to help everyone spread their income a little further, possibly even increasing it, and not forgetting to have fun and enjoy life.
Some of the best ideas we have ever seen have come from Topretirements Members. Two previous articles (see Further Reading at end) generated over 200 Comments with many great suggestions. So in this article we provide some broad based tips, then encourage you to go over the Comments already made and mine them for things that could help improve your budget outlook.
Nextavenue.org recently profiled a couple, Joan and Steve Reid, who retired and moved from the affluent New York City suburb of Pearl River, N.Y., to Vero Beach on Florida's East Coast. They had a very limited budget, $30,000, most of which was from Social Security and some small pensions. By attending to the basics the couple was able live surprisingly well in a great Florida town. We love their attitude, shown best by a quote from Joan: "We are not rich except in friendships, our art, our families and our souls" .
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Published on January 5, 2022
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Category: Financial and taxes in retirement
December 24, 2021 — The clock is running out for people who must take their yearly Required Minimum Distributions (RMDs) from their 401(k) or IRA plans. An RMD is the minimum amount you must withdraw from your account each year after you reach a certain age. December 31 is the…
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Published on December 24, 2021
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Category: Estate Planning
November 30, 2021 -- It is amazing how many times this question comes up, usually from people who we consider very proactive about their retirements. There are no easy answers to the question, but there are some guidelines. Adding to the mix, if the provision of the Build Back Better plan concerning Roth conversions is included in any final bill that gets congressional approval, there might never be a better time to consider it than right now.
The legislation being considered would prohibit the conversion of after-tax assets from traditional IRAs and employer-sponsored retirement plans into Roth accounts after December 31, 2021. No one knows what will happen in congress these days. But, if you think that law has a chance of passing, this could be your last chance to convert.
What is a Roth IRA?
Basically, in a Roth IRA you contribute after-tax income into a tax friendly retirement account. The money you contribute and future income and gains are shielded from future taxation. Unlike regular IRAs, you don't have to withdraw anything from it during your lifetime. And if you do, you won't pay taxes on those withdrawals. The SECURE Act changed the law on how long a period your heirs (except spouses, minor children, etc.) have to withdraw the money - it now has to be completed over 10 years. Unlike contributions to a regular IRA or employer-sponsored retirement plan, you cannot deduct the initial contribution from your current income.
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Published on November 29, 2021
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Category: Financial and taxes in retirement
October 13, 2021 — Social Security and Supplemental Security Income (SSI) beneficiaries will receive a record 5.9 percent Cost of Living Adjustment (COLA) for 2022. It is the largest COLA since 1982. The increase is based on the Consumer Price Index (CPI-W) from the third quarter of 2020 through the…
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Published on October 13, 2021
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Category: Financial and taxes in retirement
September 8, 2021 — The latest Trustees report for Social Security shows that the COVID-19 pandemic and the 2020 recession are affecting the future of this popular program, but no one is certain exactly how that will play out. One thing the report does lay out is that the Trust…
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Published on September 7, 2021
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Category: Family and Retirement
August 24, 2021 -- The assumption has always been that you would bring up your children and they would go on to raise their own families. Empty nesting and retirement would follow for you, bringing relaxation and less stress. But for the 2.3 million baby boomers who are raising an estimated 2.7 million children, the days of child care are not over yet. These "Grandcarents" are often in need of "Grandfamily" Housing, and the economic and other pressures are usually enormous. This article will discuss some sources of help if this is the situation for you or someone you know.
The ways that older adults become responsible for young children vary. Often it can be pinned on a drug epidemic like crack or opiods. Adult children get hooked, have children of their own, and the grandparents or uncles and aunts have to step in to avoid foster care and neglect. In other cases there might be psychological problems, the inability to hold a job, or incarceration. The pandemic has contributed to the problem too. Whatever the cause, assuming responsibility for young children when you are in your 60s and 70s is a forbidding challenge. We even know some people in their 80s who are raising their great-grandchildren.
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Published on August 24, 2021
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Category: Baby Boomer Retirement Issues
Note: This article has been updated to include vote totals as of August 10. However, you may still take the poll and the results will continue to change. August 4, 2021 — There seems to be more than a good natured rivalry going on with the baby boomer generation vs.
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Published on August 3, 2021
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Category: Active adult communities
July 21, 2021 - So you managed to get lucky. It looks like you might win the bidding to buy that condo, or a home in an active adult community. But before you submit the winning offer and break out the champagne, here are 4 things you need to do first. Your new community's financial picture deserves some extra looks, particularly in light of the collapse of the Champlain Towers South condo building in Surfside, FL. A community might look healthy, but until you have examined its financial reserves you really don't know.
This week we listened to an insightful interview on NPR with Robert Nordlund, founder and CEO of Association Reserves. An expert on reserves and the financial health of communities, he lists four things things you need to do before you invest your hard-earned money in a condo or home in a community. We have added some of our own commentary to his questions.
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Published on July 21, 2021
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