Social security

Three Indicators That It’s Time To Claim Your Social Security Benefits

April 21, 2024 /by marvin dutton

Deciding when to file for Social Security benefits is one of the most significant retirement decisions, so make it wisely.

It might cost you later if you rush it and file your claim before you’re ready. However, if you wait too long to file for benefits, you may regret not claiming sooner. There’s no one-size-fits-all answer for when to file a claim. However, there are a few indicators that you’ve done your research and are ready to apply for Social Security right now.

1. Your savings are in good condition.

Social Security benefits are intended to replace only around 40% of your pre-retirement income. That implies that you’ll need to supplement your income unless you can dramatically lower your costs once you retire.

The amount you should have saved depends on several criteria, including your projected costs and the number of years you plan to spend in retirement. Your intended retirement lifestyle may also influence your expenses, and you may wind up boosting your spending levels when you retire.

If you don’t know how much to save or if you expect Social Security to be your primary source of income, you should postpone your claim for the time being.

2. You understand how your age affects your benefit amount.

The age at which you claim your benefits directly impacts how much you get each month. If you file a claim at your full retirement age (FRA), which is 66, 66, and a few months, or 67, depending on the year you were born, you’ll get the entire benefit amount based on your work record.

You’ll get a reduced amount if you file your claim before your FRA (as early as 62). Delaying benefits will give you a bonus for each month you wait until you reach 70. In theory, you can postpone benefits over 70, but that won’t result in any additional money per month.

The age at which you begin claiming is a personal choice, and there is no right or wrong answer. However, knowing how that age would impact your monthly payments can make it easier to plan for retirement.

3. You and your husband have developed a plan.

If you’re married and your spouse is also eligible for Social Security, you should plan when each of you will file a claim.

You may choose to file simultaneously, regardless of your age. Or perhaps one of you will file your claim first while the other waits. That way, you may get some additional cash sooner in retirement while still benefiting from the larger amounts you’ll receive by deferring.

Also, while it may be unpleasant to ponder, it’s essential to examine both of your lifespans. If one spouse dies, the surviving spouse may be entitled to the deceased spouse’s entire benefit amount in survivors benefits. If you have reason to expect that one of you will outlast the other, you should consider how survivors’ benefits fit your strategy.

It might be challenging to choose when to collect Social Security, but the more you plan ahead of time, the better off you’ll be in retirement. If you’ve thought about these three considerations, you might be ready to file for Social Security as soon as possible.

Contact Information:
Email: [email protected]
Phone: 2129517376

Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].

Medicare and Social Security Benefits May Not Provide Enough Income in Retirement

April 20, 2024 /by jason anderson

While most retirees will need to pay for their retirement expenses independently, you can count on Social Security and Medicare for some support. These retirement essentials have helped retirees meet their expenditures for decades. But you can’t rely on them alone for retirement.

Medicare gaps.

Medicare is a health insurance program funded by the government for people aged 65 and older. Parts A and B of Original Medicare cover hospital stays and medical visits. Medicare Part D, generally known as prescription medication coverage, can also be added. However, there is no coverage for vision care, dental, assistive devices, or long-term care in the original Medicare terms. Seniors are responsible for paying for these items.

Medicare also offers deductibles, co-payments, and premiums, similar to commercial health insurance. Therefore, even Medicare recipients need savings and investments to offset these costs.

According to data from Fidelity, a regular 65-year-old couple retiring in 2022 will need approximately $315,000 after taxes to pay their out-of-pocket healthcare costs, and this estimate does not include dental bills or long-term care.

Medicare Part A covers skilled nursing, inpatient hospital care, home health care, facilities, lab tests, surgery, and hospice. Speak to a doctor or qualified healthcare professional about why you require specific services or materials. Determine whether Medicare will cover them so you can plan ahead of time.

Is Social Security Heading for Insufficiency?

Social Security’s financial dilemma is not new, but it is becoming a more significant concern, with the most recent projections indicating that its trust assets will be exhausted by 2035. That does not mean the program is being discontinued. Most of its revenues come from the annual Social Security taxes enrollees pay. However, this revenue is inadequate to pay for all eligible American benefits.

Once the trust funds are gone, the Social Security Administration would be able to pay out no more than 80% of planned benefits. If the administration cannot devise a solution, benefit sanctions are possible. This is difficult to hear, given that Social Security already falls short of covering most people’s daily expenses.

What You Can Do

Medicare and Social Security leave a gap in your retirement plan, but you can still take steps to fill it. The essential thing you can do at any stage of your life is to prioritize your retirement savings. Even when you’re young, making regular monthly contributions is crucial to developing the nest egg you’ll need in retirement.

You can also choose to investigate additional health insurance options. Private insurers offer extra coverage to fill the gaps left by Medicare. Consider a Medicare Advantage plan as well. You’ll have only one monthly fee to worry about, including all the same benefits as Original Medicare plus some extras. You can utilize the Plan Finder tool on Medicare’s website to locate one of them.

Regarding Social Security, you can endeavor to increase your salary today to increase your Medicare benefits tomorrow. However, you should also consider your claim approach. The age at which you enroll considerably influences the check size you get.

You should wait until you attain full retirement age (FRA) to begin receiving the benefit you’ve earned, depending on your work history. That’s between 66 and 67, depending on your birth year.

Applying earlier than this will result in more years of smaller checks. You can also delay benefits until age 70, when your monthly payments will increase.

The appropriate age to file for Social Security depends on your life expectancy and financial status. Those with low life expectancies typically enroll as early as they become qualified at age 62. Also, many people who defer their benefits to 70 or beyond do so by preference or because they require help with their bills, even though deferring Social Security would likely increase their lifetime income.

Bottom line

Even if you’re still many years away from retirement, it’s a great idea to consider these issues now. But be prepared to change. Social Security could undergo significant adjustments in the coming years, and so could your retirement plans. When these developments occur, evaluate your retirement plan and make any necessary adjustments.

Contact Information:
Email: [email protected]
Phone: 3234811328

Bio:
For over 13 years, Jason Anderson has served as a Personal Financial Advisor, Estate and Retirement Planner, helping to educate individuals from all walks of life and income levels on wise money investment and planning for a comfortable lifestyle and retirement.

Over time, Jason Anderson has become the ‘Go-To’ leading authority on personal financial advising, financial planning, and analysis, as well as retirement planning and financial planning for SMALL BUSINESS OWNERS. He also provides HIGHLY Popular financial education seminars for groups. These financial seminars empower people to more effectively budget, plan, manage their money, and achieve their personal financial goals. As a result of the excellent results, praise, and feedback that their financial seminars have received, the City of Los Angeles, The AFL-CIO union groups, as well as several other organizations, have decided to partner with Jason to more effectively accomplish their mission. He was also honored to be showcased in the November 2014 issue of Forbes Magazine “Americas Financial Leaders” and has been dubbed by the media as ‘The Financial Educator.’

Jason is passionate about the work he does because it brings him joy to help his financial planning and advising clients reach their financial goals. He finds excitement in assisting families in saving and paying for their children’s college education without stress, thanks to the financial plans he designs for them. He also takes pride in witnessing clients reach retirement and enjoy it precisely the way they desire.

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

Disclosure:
All annuity and life insurance products are designed to supplement securities as part of an overall plan. The recommendation of annuities and life insurance is not designed to eliminate the need for securities in any way.

The Drawback Of Retirement That No One Discusses

April 9, 2024 /by marvin dutton

Retirement is a stage of life everyone aspires to reach as quickly as possible because there is freedom in not having to work any longer. Many believe it will be a golden time of being able to do whatever they want. However, there are many financial considerations to make before actually retiring. Below are a few of the issues with retirement that are not often discussed, as well as helpful solutions.

1. Your net worth becomes meaningless when you retire.

You may have meticulously saved money in the future and currently have a sizable nest egg fund. However, if you reside in a place with a high cost of living, then $1 million might not be enough to support you during retirement.

Solution: Establish an income plan.

Start by not assuming that your retirement spending will be significantly lower. You might need to change your expenditures if you’re already retired and didn’t figure out how much income you’d need to fund your monthly expenses. It’s essential to separate your necessities from your wants to determine what you’ll need to survive each month as opposed to how much you spend on your desires.

2. Taxes can significantly reduce retirement income.

A larger-than-expected tax burden on their retirement income is another significant issue that retirees deal with. Everyone believes their tax rate will decrease once they retire, but that’s not true.

You’ll be responsible for paying taxes on withdrawals at your ordinary income tax rate if you have saved most of your cash in a tax-deferred pension plan, such as a 401(k).

Solution: Establish tax-free income sources.

If you want to bring down your tax burden and keep much more of your money, you need to have money saved up that you can access tax-free. You can achieve this by investing in either a Roth IRA or a Roth 401k because retirement withdrawals from these accounts are tax-free.

Ask your HR if you have a Roth alternative or would like to add one to your account.

3. Your income in retirement may be impacted by inflation.

Inflation impacts our ability to buy things, and it’s crucial to realize that this impact can be subtle.

Expect to pay more over time as the cost of living increases if you want to retain your current standard of living in retirement.

Solution: Invest in stocks.

Investing in assets with a greater rate of return is essential if you don’t want inflation to erode your purchasing power and want to prevent running out of cash in retirement.

The answer is to incorporate stocks into your financial portfolio since you’ll need the savings to increase during retirement.

4. You might live longer than your savings.

Most people would most likely respond that their goal is to live a long and healthy life if asked. However, for individuals who have insufficient savings, this may be a drawback to retirement.

The Social Security Administration estimates that one in four 65-year-olds will live above the age of 90 in the current population.

Solution: Plan for a lengthy retirement.

The future cannot be predicted. However, the Social Security Administration has a life expectancy calculator that can estimate how many years you can expect to live on average based on your age and date of birth. However, your plan must offer you enough money to cover your expenses for a minimum of 30 years and possibly longer.

5. The cost of long-term care could eliminate your savings.

If you don’t have a plan to pay for long-term care, you could still run out of money even if you have a sizable nest egg and won’t outlive your assets. According to the U.S. Department of Health and Human Services, your chances of requiring long-term care are around 50/50 after you reach the age of 65.

According to Genworth Financial, the median yearly cost of an assisted living home is $54,000 in 2021.

Solution: Get long-term care insurance.

Expect Medicare or health insurance to not cover the expense of long-term care. The Administration for Community Living says these only offer a small amount of coverage for some forms of long-term care.

Consider purchasing long-term care insurance or getting a life insurance policy with a long-term care benefit.

6. Maybe you are not ready for high healthcare costs.

If you don’t have the funds set aside to pay for medical expenses in retirement, you might be in for a surprise. According to Fidelity Investments, a 65-year-old couple who retired this year will require $315,000 to cover medical costs. Even the expenditures of long-term care are not included in that.

Solution: Reduce costs and increase health savings.

You might profit from working more hours to continue obtaining subsidized health insurance through your company to deal with escalating healthcare expenditures in retirement. If you’ve got a high-deductible health plan, you can also contribute to one while you are still at work. Retirement HSA withdrawals for eligible medical costs are tax-free.

Contact Information:
Email: [email protected]
Phone: 2129517376

Plan Early – How to Get Credit for Active Duty Service

April 2, 2024 /by ali el-sayed

In this article, we’ll talk about how military service may be used to enhance your years of service and enable you to retire earlier – and with a larger annuity – than if you only used your time as a FERS or CSRS employee.

Who is eligible for the credit?

You can earn credit for time spent in the United States military services if it was 1) active duty that ended honorably and 2) completed before retiring from your civilian career. The Army, Navy, Marine Corps, Air Force, and Coast Guard are all considered “armed forces,” as are the service academies. It also includes service in the Public Health Service’s Regular or Reserve Corps and as a National Oceanic and Atmospheric Administration commissioned officer.

General guidelines for obtaining credit

By depositing to the Civil Service Retirement and Disability Fund (CSRDF), you can get credit for any time of active duty service – barring weekend exercises. That deposit will be calculated as a percentage of your basic pay while on active duty. If the deposit is made within two years of the date you first became an employee, no interest will be charged. Following that, interest will be charged.

If you’re a reservist, making a deposit won’t affect your eligibility for reserve retirement pay. On the other hand, if you’re getting military retirement pay, you cannot normally continue to earn that benefit while still collecting credit for your service in your civilian annuity.

The exceptions are if you were granted military retirement pay for a service-connected disability sustained in combat with a U.S. enemy or sustained in battle in the line of duty during a war caused by an instrumentality of war. If you don’t meet one of the exclusions, you can maintain your military retired pay and have your FERS or CSRS annuity calculated solely on your civilian service, or you can forgo the military retired pay and make a deposit to the CSRDF to receive credit for your service toward a FERS or CSRS annuity.

Specific guidelines for obtaining credit

If you’re a FERS employee who served in the military after 1956, the only option to earn credit for that period is to submit a payment to the CSRDF. The deposit is typically 3% of your base salary while on active duty, plus interest.

CSRS workers with post-1956 military service are divided into two groups: those employed after October 1, 1982, and those hired before that date. If you were employed after October 1, 1982, you’d be treated the same as FERS workers, except for having to make a bigger deposit. Generally, a 7% deposit (plus interest) is required to have that service counted for civilian retirement reasons.

You would have two options if you were employed before October 1, 1982. You have the option of paying the 7% deposit for any post-1956 military service or not. The consequence of failing to pay the deposit is obvious. If you become eligible for Social Security at age 62, those years of non-deposit service will be deducted, reducing your CSRS annuity. That won’t affect only you but also your survivor, who will have their annuity recalculated based on your reduced annuity.

If you have any post-1956 military service and have not yet made a deposit but are considering doing so, you should contact your personnel office. The benefits specialists there may show you what your annuity (and, if applicable, your survivor’s annuity) would be with and without that service.

Contact Information:
Email: [email protected]
Phone: 8132032515

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.

Are You Having Difficulty Saving for Retirement?

March 27, 2024 /by marvin dutton

Did you know that on average most people need over $1 million to afford a comfortable retirement? Are you one of 75% of all Americans who worry they cannot afford to retire? Less than 22% of surveyed individuals feel confident they have adequate savings for their retirement years. Just a little half of all retirees have less than $250,000 put away, further highlighting the importance of a diversified retirement portfolio.

Most of America’s aging workforce is now facing a scarcity of retirement funds. The current belief among citizens is that they have failed to accumulate enough savings to retire altogether, which motivates them to increase funds for savings. Younger workers, who will statistically enjoy a longer lifespan, will have more time to grow said savings.

By taking a moment to delve into the numbers, we find a higher level of angst surrounding retirement, with only 3% of all retirees saying they are living the dream.

On the other hand, 37% of retirees feel they are living comfortably, with the remaining 37% feeling uncomfortable with their financial situation. Expenses are undoubtedly on the rise, which has led to nearly half of all retirees feeling as though they are paying too much in their golden years due to inflation.

If you are one of the many workers planning to fund retirement through a 401(k) or IRA plan, you won’t have to rely on Social Security payments. By making strides to save early, and often, you are poised to feel more confident in your tax-advantaged retirement savings accounts rather than risk playing catch-up. As a big, long-term goal, retirement usually requires individuals to focus on regularly occurring goals rather than the final goal.

Due to various standards of living, as well as the cost of inflation, Social Security often falls short of providing throughout retirement. Even though getting started is the most challenging step, there are many ways to begin saving for retirement. By creating a budget, you are more likely to prioritize retirement savings overall, with a figure you can stick to. You can begin to amass your retirement account savings by tracking expenses and simply living by a budget.

Contact Information:
Email: [email protected]
Phone: 2129517376

Why Retirees are Returning to Work in Droves

March 26, 2024 /by kevin wirth

Currently, the American workforce has experienced a rate of resignation like never before. As companies brace against the Great Resignation, others embrace the Great Unretirement as retirees turn toward employment. More than 1.5 million American retirees who exited the workforce just one year prior have begun seeking employment once again. This number represents just 3% or more of our nation’s total number of retirees, and trends prove little evidence of a decline. But what was it exactly that caused senior citizens within retirement to decide to begin working again?

According to the AARP, the sheer increase in overall healthcare costs, among other necessities, has risen beyond 3.5% from years past. This burdensome requirement continues to come at a higher cost than ever before. On the other hand, qualified retirees who haven’t had the opportunity to retire have been opting to remain in the workforce simply for healthcare coverage alone.

Issues within the stock market directly impact retirement income, especially in terms of passive income and other investments. With the Dow falling nearly 10% and the S&P 500 slipping further behind, most retirees are witnessing the decline of their 401(k) balances. Prices have continued to skyrocket, leaving retirees with few options aside from continuing to work or remaining on the payroll.

An ever-increasing rate of inflation has affected every single US citizen, with retirees being no exception. Once you begin living on a limited income, especially in a time of inflation, it becomes increasingly difficult to even pay for simple necessities such as groceries, utilities, and more. Back in April, the rate of inflation hit 8.3% in the United States. The recent Social Security Cost-of-Living Adjustment, or COLA, was only 5.9%. Ultimately, this leaves retirees to manage less income than ever before.

While there are other reasons to justify coming out of retirement, including loneliness or an inability to manage not working, financial reasons remain the top concern. When retirement savings aren’t up to par, paired with individuals who hope to avoid delaying the receipt of Social Security, the need for health insurance and loss of value in investments may continue pushing retirees toward the workforce once again.

While for many retirees, working again after experiencing retirement has provided a sense of camaraderie, purpose, and accomplishment they had been missing, especially after COVID lockdowns. However, many are admittedly seeking employment for a better sense of financial stability. By planning early, and taking steps to avoid financial mistakes, saving for retirement through a number of avenues will pay off well into the future. However, if you are uncertain about the financial stability of your golden years, it is important to speak with a financial advisor before facing the consequences of an unstable income.

Contact Information:
Email: [email protected]
Phone: 9143022300

Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial planning.

[email protected]
914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Rules for Children’s Survivor Benefits

March 13, 2024 /by aaron steele

In some circumstances, the children of deceased federal employees and retirees are eligible for a survivor annuity. For retirees, this benefit is paid even if you didn’t choose a survivor annuity for your spouse when you retired.

Your child must be a dependent who is under 18 and not married to qualify. The following are included under “dependent”:

1) An adopted child

2) Stepchildren (but only if the child has lived with you in the typical parent-child relationship)

3) A recognized natural child

4) A child you lived with and for whom you filed an adoption petition, adopted by your surviving spouse after your passing

A dependent unmarried kid between 18 and 22 enrolled in a full-time course of study or training regularly is exempt from the age restriction. It is also waived for dependent children born with a mental or physical impairment that prevents them from supporting themselves, as long as they continue to be both unable to support themselves and unmarried.

You must give OPM information on your child’s schooling, residence, and work (if any) for your child to be eligible for such a benefit. Aside from that, the doctor for your child must disclose details about the child’s health. The OPM Form RI 25-43, accessible in agency personnel offices or online at www.opm.gov/forms, provides a summary of the required information. Additionally, the amount of the benefit paid to the child or children by the Social Security Administration is deducted for children of FERS or CSRS Offset employees or retirees.

The rules governing annuity payments to children are the same for both CSRS and FERS employees and retirees. However, the amount of the Social Security benefit payable based on the employee or retiree’s Social Security-covered federal employment will be deducted from the annuity payments made to a child of a CSRS-Offset or FERS employee or retiree.

Every time a retiree’s cost-of-living adjustment occurs, the annuity payable is based on a revised formula (COLA). Rates vary a little, but where a kid’s living parent was the deceased employee or retiree’s current or former spouse, the annuity benefit payable is the lesser of approximately $6,000 per month per child or approximately $1,800 per month divided by the number of eligible children.

The payment payable is the lesser of approximately $700 per month per kid or approximately $2,100 monthly divided by the total number of eligible children if there are no living parents of the child who were married to the deceased employee or retiree.

The rate will always be the lower of the two relevant numbers, whether there are one, two, or three qualifying children. The rate per child decreases correspondingly when there are four or more kids.

The annuity is enhanced if the employee/retiree’s married parent passes away before the child’s benefit ends. There may be other grounds for adjusting benefits. The pensions of the remaining eligible children are increased prospectively, for instance, if they are being paid to more than three children and one of them has had their annuity terminated for whatever reason – such as aging out of eligibility.

The survivor annuity payable to each eligible kid begins the day after the employee or retiree passes away and expires on the last day of the month before the child’s death, marriage, turning 18 years old, or, if over 18 and disabled, becoming self-sufficient.

What do you need to submit a child benefit application?

You’ll need the child’s birth certificate or another kind of proof of birth or adoption when applying for benefits for your child. You’ll also need the child’s and parent’s Social Security numbers. Other documentation can be requested, depending on the kind of reward involved. For instance, if you want to apply for the child’s survivor benefits, you’ll be asked to produce evidence of the parent’s passing. You must also present medical documentation to support your claim for assistance on behalf of a kid with a disability. Any other documentation you might need will be explained to you by the SSA representative assisting with your application.

Can benefits continue at age 18?

The benefits end when your child turns 18, unless they are still in school or have a condition. The SSA will send you a notice three months before your child turns 18 informing you that their benefits will stop if they are still enrolled in school. Benefits continue even if your child attends an elementary or secondary school full-time (grade 12 or below). It’s crucial to adhere to the guidelines if your child is less than 19 and still enrolled in an elementary or secondary school.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

The Complete Schedule for Social Security Checks

March 13, 2024 /by jason anderson

Social Security retirement benefits, like disability and survivor benefits, are generally paid in the month after the month in which they’re due. So, if you want to begin collecting Social Security payments in July, your benefits will be delivered in August.

However, the day of the month you were born determines your benefit payment. Here’s when you can expect to get your monthly paycheck.

If you were born:

From the 1st through the 10th, your check will be deposited on the second Wednesday of each month.

From the 11th to the 20th, your check will be deposited on the third Wednesday of each month.

From the 21st through the 31st, your check will be deposited on the fourth Wednesday of each month.

However, there are a few exceptions to this schedule. If your Social Security check is due on a holiday, it’ll be deposited the day before. Also, if you receive both SSI and Social Security payments, you’ll get your Social Security check on the third day of the month.

You should also be aware that Social Security payments are sent on the third day of the month to beneficiaries who began receiving benefits before 1997.

For a comprehensive list of payment dates in 2022, go to SSA.gov/pubs/EN-05-10031-2022.pdf.

Receiving Alternatives

You can get your income from Social Security in two ways. The most common one is direct deposit into a bank or credit union account since it’s simple, safe, and secure. If you don’t want this option or don’t have a bank account into which your payments may be transferred, you can purchase a Direct Express Debit MasterCard and have your benefits put into the card’s account.

This card may then be used to withdraw cash from ATMs, banks, or credit union tellers, pay bills online and by phone, make purchases at shops or places that accept Debit MasterCard and receive cash back, and purchase money orders at the U.S. Post Office. Your account is debited automatically when you spend or withdraw money. You may check your balance by phone, online, or at ATMs.

There’s also no cost to apply for the card, no monthly fees, and no overdraft fees. However, optional services, like multiple ATM withdrawals, have minor charges. Cardholders now receive one free ATM withdrawal per month; however extra monthly withdrawals cost 85 cents, plus a surcharge if you use a non-network ATM. For additional information, go to USDirectExpress.com or call 800-333-1795.

When and how to apply

The SSA advises applying for benefits three months before you expect to begin receiving payments. That’ll give you sufficient time to ensure you have all the information required to complete the application. A checklist of everything you’ll need may be found at SSA.gov/hlp/isba/10/isba-checklist.pdf.

You can apply for Social Security benefits online at SSA.gov, over the phone at 800-772-1213, or at your local Social Security office. Be sure to schedule an appointment first.

Contact Information:
Email: [email protected]
Phone: 3234811328

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

Do you want to apply for Social Security benefits now or wait?

March 6, 2024 /by devinder kumar

You must choose what to do with Social Security if you are approaching retirement or have already done so. You may file for checks anytime between 62 and 70, but not if you quit your job.

Here’s what to consider when deciding when to file for Social Security.

How old are you now, and when will you fully retire?

The most crucial information to understand before applying for Social Security is your full retirement age (FRA) and how it relates to your present age.

The Social Security Administration sets your full retirement age, and yours can fall in between the following depending on the date you were born:

If born between 1943 and 1954, your FRA is 66.
If born in 1955, your FRA is 66 and two months.
If born in 1956, your FRA is 66 and 4 months.
If born in 1957, your FRA is 66 and six months.
If born in 1958, your FRA is 66 and 8 months.
If born in 1959, your FRA is 66 and 10 months.
If born in 1960 or after, your FRA is 67.

You can file a claim at your FRA to get your regular benefit, often known as your Primary Insurance Amount (PIA). Your PIA is determined by considering your 35 greatest earning years to derive a proportion of average wages. However, most people do not apply for benefits at their full retirement age.

If you’re considering filing an early claim, you should be aware that doing so will result in a permanent 5/9 of 1% reduction in your normal benefit for a period of up to 36 months. Benefits are then further cut by 5/12 of 1% per month. Therefore, the penalty would only lower a person’s monthly income by a maximum of 30% if they had an FRA of 67.

On the other hand, filing a claim after your FRA allows you to delay filing until age 70, which will permanently boost your payment. If you wait past FRA, your check will grow by 2/3 of 1% per month, for a yearly benefit increase of 8%.

What other earnings do you have, if any?

Since benefits from Social Security only replace approximately 40% of pre-retirement income, they won’t be sufficient to support you on their own. You must have a strategy involving additional revenue streams. You might wish to delay starting Social Security if you haven’t determined how much your investments or pension will offer to ensure you have enough money to live on.

Of course, it is feasible to work and receive retirement benefits simultaneously. However, if you work while receiving benefits and have not yet reached FRA or won’t reach FRA at any point in the year, you will forfeit $1 in payments from Social Security for every $2 earned over $19,560 in 2022. And if you work before hitting FRA but do so later in the year, you will forfeit $1 for every $3 made beyond $51,960.

Suppose you need to work to complement your benefits and earn enough to lose a sizable percentage of your retirement income. In that case, filing for Social Security isn’t much benefit.

How is your overall health?

Your health is a significant consideration when determining when to begin your checks. You can forfeit checks you are entitled to if you delay filing for benefits in the hopes that you will eventually receive enough money to compensate for the lost income.

However, if your health is poor, you risk dying before you receive much compensation. Applying for Social Security early is a wise decision to maximize the lifetime value of your benefits in those circumstances.

What impact will your action have on your spouse?

Last but not least, consider your partner. If you earn more money than your partner, survivor benefits may be available to them after your death. These may be bigger than their retirement benefits, but your partner will have less money each month if you’ve taken your benefits early and paid the associated penalties.

You can decide whether to file your claim right away or wait so that you can enhance your benefit and any survivor’s benefit your spouse may wind up receiving.

Contact Information:
Email: [email protected]
Phone: 9671114235

Bio:
Remote work is reshaping the future of modern business, offering new opportunities for flexibility, efficiency, and talent acquisition. By embracing remote work, modern businesses can unlock new levels of productivity, collaboration, and innovation, while also addressing the evolving needs and preferences of employees

Disclosure:
John James O’Grady

Three Reasons Why You May Receive Less Social Security Income Than Expected

March 5, 2024 /by devinder kumar

You don’t want to be startled if you receive less money than expected.

If you plan to rely on Social Security as a retiree, it’s critical to understand how much money your benefits will provide. Unfortunately, many seniors overestimate the amount of money they’ll get, and as a result, many individuals overestimate the role Social Security may play in supporting them.

You don’t want to wind up with less than you expected and a financial gap, so be aware of the three main reasons why you can end up with payments that are less than you expected.

1. If you file early, your benefits may be reduced.

One of the main reasons your benefits may be less than you expected is if you have to claim them early.

You can begin collecting Social Security at age 62, but each year you wait until you reach 70 increases the amount of your monthly payout. Many people wish to postpone their benefits claim to benefit from the increased income. Still, they’re often unable to do so because they must quit working sooner than expected and rely on Social Security to help them make ends meet.

If you’re compelled to file an early benefits claim due to health concerns, job loss, or other situations that require you to leave your employment sooner than intended, your monthly Social Security payout might be reduced by hundreds of dollars.

2. Medicare premiums are deducted from your monthly payout.

When you apply for benefits, you may be shocked by the size of your payment for another reason: Medicare premiums are often deducted from your Social Security check.

These premiums provide crucial coverage, but they’ll cost roughly $170 per month in 2022, with most years seeing price rises. Because your Social Security payout isn’t huge at this point, losing $170 or more of it to Medicare expenses might have a significant impact.

3. Working may reduce your benefits

Finally, if you have not yet achieved your full retirement age (FRA), which is between 66 and four months and 67, you may mistakenly reduce or eliminate benefit payments if you work to supplement Social Security.

If you work before reaching FRA in 2022, you’ll lose $1 in benefits for every $2 earned beyond $19,560 if you’re under FRA the whole year. If you expect to reach your FRA anytime during the year but work before then, you lose $1 in benefits for every $3 earned beyond $51,960.

Finally, the Social Security Administration accounts for the benefits withheld due to your excess earnings, and your monthly payment amount is recalculated at FRA. As a result, you gradually recoup the lost benefits. However, in the meantime, your yearly Social Security income may be lower than anticipated and may not complement your earnings as much as you had intended.

Knowing that a payout may be lower than expected might help you develop more accurate retirement plans.

Contact Information:
Email: [email protected]
Phone: 9671114235

Disclosure:
John James O’Grady

How Does Early Retirement Affect Social Security benefits

February 22, 2024 /by devinder kumar

With the Great Resignation and many individuals pursuing FIRE (Financial Independence, Retire Early), many people are leaving the workforce or following lower-paying pursuits.

You may believe these people are giving up a lot of Social Security income due to how benefits are calculated, but it’s not that bad.

That’s because Social Security payouts are regressive. When you quit your six-figure career at age 40, you may have only earned Social Security earnings for 20 years (in many cases, 15), so most of your subsequent earnings won’t boost your future benefit. If your age-40 earnings were the last that applied to your Social Security, like if you opted for volunteer work and lived off your savings, the impact on your benefits may surprise you.

Social Security uses “bend points” to calculate your Primary Insurance Amount or your Full Retirement Age benefit. 2022 bend points are $1,024 and $6,172. The first $1,024 of your indexed average lifetime earnings are weighted at 90%, amounts between $1,024 and $6,172 at 32%, and amounts exceeding $6,172 at only 15%. Log on to the Social Security website to discover how bend points affect you and how to get your Primary Insurance Amount (PIA).

When an early retiree has fewer than 35 years of earnings (for example 20 years), Social Security will still average their earnings (indexing the earlier years to your age-60 year) as if there are 35 years to calculate. In this example, 15 years are zeros, lowering your lifetime average.

Adding more years of high earnings doesn’t necessarily improve Social Security benefits because the weightings are highest at the lower end of the average earnings scale. You’re taxed at the same rate (up to the annual maximum), but your benefit doesn’t rise as much.

Here’s an example:

John, born in 1962, is 60 this year. John was ahead of the FIRE curve because he earned enough during his career to stop working altogether at 40 in 2002. John maxed out his Social Security earnings every 20 years since he hasn’t paid any tax into Social Security. His income beyond age 40 came from passive investments made with his high income earned during his 20 working years.

What if John had kept earning his high income up to this point? John’s age-67 benefit would be $3,377 if he made the maximum Social Security taxable amount for 40 years. $9,400 (30%) more per year, but John would have had to get up at 2 a.m. for 20 years to bake doughnuts.

That’s an extreme example, so let’s look at another one. John’s twin brother Jake made $40,000 each year over the same 20-year span. Jake is eligible for an FRA benefit of $2,141 if he last worked at age 40. If Jake had kept working in the same position (with no pay increases) until he was 60 in 2022, the additional years of earnings would only increase his benefit to $2,661 at age 67.

That amounts to $520 extra per month ($6,240/year), a 24 percent raise, in exchange for mopping the floor at 3 a.m. for 20 more years.

But neither of these was Jake’s actual outcome; he began his own bicycle business in his 41st year and has run it ever since. It wasn’t as lucrative as wiping doughnut shops, he made around $20,000 per year, but it helped him get by. When combined with the passive investment income that John helped Jake organize, Jake’s modest needs were met.

Jake is due a Full Retirement Age payout of $2,453 per month with this extra 20 years of income from following his passion in life – nearly as much as John earned with his very high salary over 20 years.

So, yes, retiring early affects your Social Security payment, but not as much as you think. Partial retirement, like pursuing a passion as a “new chapter,” may not affect Social Security as much as you’ve been led to believe.

If your earnings record was at the lower end of the scale, the benefit of continuing to add to your earnings record could be significant. However, the influence is less pronounced at the middle and upper-income levels.

Note: A 60-year-old was used in the examples because there are existing indexing data, bend points, and maximum earnings amounts. If a 40-year-old were used in this example, there would have to be several assumptions made about the next 20+ years. These are made-up examples to show how early retirement affects Social Security.

Contact Information:
Email: [email protected]
Phone: 9671114235

Disclosure:
John James O’Grady

Signs You’re Being Scammed for Social Security

February 19, 2024 /by jason anderson

Your Social Security number is one of the most crucial pieces of personal information you own. With just a nine-digit number, you could save your fortune.

Therefore, it is a requirement to provide this unique number when applying for federal government jobs or programs. So you must safeguard your Social Security number due to its significance.

How to Spot a Government Imposter Scam

Because of the importance of Social Security numbers, scammers are posing as government personnel to steal people’s hard-earned money. They threaten and demand immediate payment to prevent arrest or other legal action.

These thieves are constantly adapting and finding new ways to steal your money and private information. Don’t be fooled! For your safety, we want you to know how you can keep yourself and your loved ones safe!

Stay Alert

The Social Security Administration (SSA) will send you a letter with payment choices and an appeals process if you owe money. They only accept checks, money orders, electronic payments made through Online Bill Pay, or in-person by check or money order. They are not going to:

Threaten you with arrest or legal action if you don’t pay quickly.
Will never promise monetary compensation or make a benefit promise.
Will never promise gift cards, prepaid debit cards, or wire transfers via the U.S. Postal Service.

Social Security has implemented an upgraded safety measure to prevent unauthorized access to your personal Social Security account. However, they will never ask for a return call to an unknown number or request personal information from you by email or text message.

How to Protect Your Account from Fraud

A Social Security scam has nine telltale signals. Someone contacting, texting, or emailing you on social media should be considered a scam as they will:

Requires anonymity
Warns of legal action or arrest
Demands or asks for an immediate response
Requests that you divulge private information
Ask your bank account or be threatened with a seizure.
Use a gift card, prepaid debit card, virtual currency, or check to cover the cost.
Promise your Social Security benefit will be increased
Give fake names to prove their legitimacy as government personnel to gain your trust.
Threats to cancel your SSN, even if they already have your SSN in their possession

How To Handle SSN Scam

Before giving vital information or making a financial choice, seek the counsel of a trusted friend or family member. Please don’t be ashamed to come forward if you’ve been the victim of identity theft or you think you’re targeted:

Take a deep breath and hang up if you receive a weird phone call or text message.
Do not answer any calls, texts, or emails from unknown numbers.
Keep your cash and private details to yourself.
Contact the Inspector General’s Office and inform them about the fraud.
Don’t reply or engage with a caller or sender who asks for your Social Security number or emails you about a problem with your account if you think they are suspect.
Scams involving the Social Security Administration (SSA) can be reported using our online form.

Whether you’ve been a victim of SSN fraud or scams or want to know more, the AARP Fraud Watch Network will help you and provide you with the resources you need to identify better and avoid scams.

Contact Information:
Email: [email protected]
Phone: 3234811328

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

How Much Retirement Income Will Your TSP Provide?

February 14, 2024 /by todd carmack

Most people will need to take regular withdrawals from their TSP in retirement, but how exactly federal retirees can accomplish this is unclear.

It’s fantastic to have a sizable TSP by retirement. However, there is an issue. Federal employees are not used to making a living from a lot of money. A paycheck every two weeks is the norm for most. So how do you do that without running out of money to turn your TSP into a paycheck? This post will dive further into this specific query.

The biggest TSP Paycheck Mistake

A simple way to determine how much of a paycheck your TSP can provide without you having to worry about running out is to use the 4% rule. Most individuals are unaware of how the 4% rule works and don’t use it correctly.

Actual 4% Rule

Many think the 4% rule states that you can only withdraw 4% of your yearly TSP balance. However, this is untrue.

In reality, the 4% rule recommends that you withdraw 4% of your TSP balance at the start of retirement and then increase that initial withdrawal annually following inflation.

Here’s an example.

Let’s imagine you have $500,000 to retire on. You can withdraw $20,000 in the first year of retirement since 4% of that is $20,000.

Most people assume that in year 2, you must multiply 4% by your new TSP amount once more, but that is not what the 4% specifies.

According to the 4% rule, you should increase your withdrawal amount in year two by the amount of inflation that occurred that year.

Therefore, assuming inflation was 5%, your withdrawal in year two would be $21,000 ($20,000 x 1.05).

The graph below shows how a withdrawal, assuming a $20,000 initial withdrawal, would alter with various inflation rates over time.

Year	Inflation	Withdrawal
1	5%	$20,000.00
2	5%	$21,000.00
3	2%	$22,050.00
4	1%	$22,491.00
5	0%	$22,715.91
6	0%	$22,715.91
7	5%	$22,715.91
8	5%	$23,851.71
9	8%	$25,044.29
10	1%	$27,047.83

But you haven’t finished yet.

Do you get to keep the entire $20,000 if you have $500,000 in your TSP and plan to withdraw $20,000 in your first year?

Most likely not.

Uncle Sam comes in. We must not overlook taxes!

With a 20% effective tax rate, you may spend $16,000 of a $20,000 first-year withdrawal after paying $4,000 in taxes.

In addition, the type of retirement plan you are withdrawing funds from and your other income sources will determine your retirement tax rate.

For instance, you would pay no taxes if you withdrew the $20,000 from the Roth TSP.

Yes, that’s right-$0!

That is one of the many benefits of the Roth TSP.

Making TSP Paychecks

Once you know how much you can take out of your TSP each year, you should pick how often (monthly, quarterly, etc.) you wish to receive the payments and divide the annual amount accordingly.

You have many flexible options with the TSP (and other banks if you have IRAs) regarding how you wish to receive your money.

Because most payments (such as utilities, credit cards, etc.) must be paid each month, most individuals prefer a monthly payment.

As a result, a $20,000 annual withdrawal would be roughly $1,666 each month, or $1,333 after taxes.

However, you can certainly modify your payment schedule based on your requirements.

Take a TSP Annuity

Another option you have when it comes to withdrawing your TSP is to take a TSP annuity. With this option, you would give your TSP balance, or at least a portion of it, to an annuity provider. They would promise you a set salary for a predetermined period. Your life expectancy will determine your monthly payment amount if you want to have the annuity generate payments for the remainder of your life.

The option’s limited flexibility and reversibility are its main drawbacks. Once you’ve made this choice, accessing any of your funds other than the monthly salary you receive from them will be incredibly challenging. Although this approach provides protection, it has very little flexibility.

Not to mention the fact that most fed employees already receive a sizable fixed income through their pension and Social Security. Although having a fixed income is fantastic, you still need to have enough savings and assets to deal with life’s uncertainties when they arise.

Contact Information:
Email: [email protected]
Phone: 7735026467

Bio:
Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.

How to Get the Most Out of Your FERS Pension

February 13, 2024 /by jason anderson

The federal government’s FERS has a three-legged stool of retirement benefits comprising the Basic Benefit Plan, the Thrift Savings Plan (TSP), and Social Security.

This article focuses on the Basic Benefit Plan, also called the federal government pension.

Pension Calculation for FERS

The FERS Basic Benefit Plan, or pension, is determined by multiplying the duration of creditable service by a percentage (typically 1% or 1.1%) and then multiplying by the “high-3” average wage. The 1% is used for those under age 62 at the time of separation for retirement and those over 62 with fewer than 20 years of service.

If a federal employee quits at 62 with at least 20 years of creditable service, the percentage rises to 1.1%. These three years are typically your last three years of service, but they might be earlier if your basic pay is more. Your basic pay is the basic salary you earn for your job.

As a result of evaluating the three years of your highest pay more heavily to maximize the pension benefit, it makes sense to retire after you have earned the highest salary in the federal government. Furthermore, if you work until age 62 and have 20 years of service, you will receive 10% extra in lifetime pension income!

Survivor’s Benefit

With the pension, the survivor’s benefit is equally essential to consider. That’s particularly important since you can leave the surviving spouse half of your pension if you die before them. The pension annuity is lowered by 10% if the survivor’s benefit is 50%.

The survivor’s benefit is sometimes overlooked when calculating your FERS pension benefit. You can offer your surviving spouse 50% of your annuity for a minor 10% reduction in your monthly payout.

Cost-of-Living Adjustments (COLAs)

COLAs are an essential part of the pension. When the cost of living rises for basic necessities such as groceries, gas, and so on, your purchasing power diminishes.

So, the FERS pension includes a cost of living adjustment. In general, it would be best if you were 62 to increase the cost of living. Inflation is currently near 40-year highs and is unlikely to fall for some time.

The cost-of-living adjustment (COLA) is an essential component of the pension since it is one of the major issues with many pensions that aren’t adjusted for inflation. As a result, your purchasing power erodes over time, and you must make up the difference elsewhere in your budget.

Maximizing FERS

The following are the top four ways to maximize your FERS pension:

1) Retire with at least 20 years of service and at least aged 62. Your monthly pension payment will grow if you can retire with more than 20 years of service. However, aim to maintain a minimum of 20 years and an age of 62.

2) Retire in your 60s with the highest three years of salary. Before you retire, work on achieving your large advancements in the federal government. In this case, your multiple is based on a greater last three years’ wage.

3) Defer taking the pension benefit until you reach 62 to maximize the COLA and then take advantage of it instead. Then, if possible, retire at 62 or later.

4) If married, consider the survivor’s benefit. You may cover your spouse with a 50% monthly annuity for a modest reduction in your monthly annuity.

These four basic guidelines don’t apply to all situations, so you should discuss them with a financial consultant for advice tailored to your situation.

Contact Information:
Email: [email protected]
Phone: 3234811328

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

Contact Information:
Email: [email protected]
Phone: 3234811328

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

How to calculate your social security benefits

February 13, 2024 /by ali el-sayed

You need to understand how Social Security functions, whether you plan to retire soon or not. Social Security is protected against inflation and lasts a lifetime. You should understand it now because it will be significant in retirement. You owe it to yourself to know how your benefits will be determined.

The method used by Social Security to determine your benefits

Benefits from Social Security are based on your earnings over your career. So how is the Social Security amount determined?

• The Social Security Administration adjusts your pay during your career to reflect salary growth. You are given credit for your wages up to a yearly “wage base limit.” The pay base ceiling is $147,000 in 2022.

• Next, the average monthly earnings over the 35 years when your wages were at their highest are used to compute your Average Indexed Monthly Earnings (AIME).

Then, you’ll get rewards equating to a portion of your AIME. Your income determines the precise percentage you get:

• 90% of AIME – up until the first “bend point.

• 32% of AIME – up to a second “bent point.

• 15% of AIME – up to the third “bend point.

Based on typical monthly earnings, the bend points represent various income levels. They change each year, and the rules that pertain to you are the ones that are in force as of your 62nd birthday. The first bent point is $1,024, while the second bend point is $6,172 for everyone reaching age 62 in 2022.

You will receive 90% of your profits up to $1,204, 32% of your profits within $1,024 and $6,172, as well as 15% of your profits beyond that amount, or 15% of $828, if your average monthly income during the 35 years you made the most was $7,000.

This computation would determine the primary insurance amount (PIA). That would be accessible to you once you reached your full retirement age, which, if you were born in 1956 or later, would be between the ages of 66 and 4 months and 67.

Your benefits would be increased if you waited past your full retirement age since you may accumulate delayed retirement credits between FRA (full retirement age) and age 70. However, if you filed your claim before the FRA, the early filing penalties would reduce your PIA.

Why is it necessary to understand the benefits formula?

So why is it important to know this formula? First, you can make better decisions by understanding how well the benefit formula works.

You may ensure that you work for a minimum of 35 years by keeping in mind that your payment is computed using an estimated 35 years of wages. You may also decide to put in more hours of labor to raise this average. If you start to earn a lot later in life, each additional year of high income will replace one year of low income in your formula.

You can also estimate the part your rewards will play more accurately. Unless your income is extremely low, you’ll only receive a small portion of your income benefits. Consequently, Social Security won’t even come close to restoring your preretirement income. Instead, it replaces, for the majority of people, around 40% of their pre-employment income.

By being aware of this, you can be sure that you have sufficient savings to add to your benefits. Finally, knowing that filing for benefits early will result in smaller monthly payments (but more checks) and that waiting will result in higher payments (but fewer checks) can help you make wise decisions about when to do so.

Knowing these facts enables you to make the best use of your rewards so you can live a more comfortable retirement because Social Security will become a significant source of your retirement income.

Contact Information:
Email: [email protected]
Phone: 8132032515

How to Handle Retirement Worries

February 7, 2024 /by mack hales

Most people’s visions of retirement don’t include lazy days on the beach in their favorite pair of flip-flops. For the vast majority of Americans, the most stressful aspect of their finances is the process of preparing for retirement.

Many people discover their retirement years are more financially difficult than they imagined. Owing to the ever-increasing costs of medical care, many seniors find that they need more money than they expected to cover their basic living expenses, including housing, food, and transportation.

Furthermore, many people make the mistake of putting aside a meager amount for retirement and instead rely on Social Security. However, these benefits are usually insufficient to provide a person with a decent living on their own. Therefore, they need to supplement their income with revenue from other sources and their current income to make a difference. According to recent figures, 41% of workers are anxious that they have not saved enough money for a comfortable retirement. If you find yourself in this circumstance, you must take the crucial steps below.

Delay Retirement

After decades of worrying about retirement savings, people in their 30s and 40s still have time to make a difference. However, the situation may be more problematic for you in your late 50s or 60s. In that case, extending your existing work by a few years is an alternative worth considering.

There are a few significant advantages to delaying retirement for even a year. You need not be concerned about instantly wasting your money. After that, you’ll be able to continue contributing to your savings. Finally, you’ll have the option of delaying filing your Social Security claim, allowing you to get a larger monthly payout and improve your overall income.

Saving and planning for your retirement years is critical so you don’t have to scrape by after a lifetime of hard work. If you are concerned about an income gap, take these crucial steps to enhance your financial future and retire with more confidence.

Life Insurance Coverage

Some choices exist if you’re worried that rising health care costs may deplete your retirement funds. Consider purchasing long-term care or other life insurance forms to safeguard your savings. Find out more about your options by talking to a financial advisor.

According to the AARP, you should consider long-term care options around the age of 45 to 50. And if you intend to purchase it, strive to do it by age 65 to balance expenses and benefits.

Health savings accounts (HSA) may be an option for those in high-deductible health plans, in addition to paying for extra insurance. HSAs, similar to IRAs, allow you to invest pre-tax funds. HSA contributions can be withdrawn tax-free if utilized for eligible medical expenses. As a result, HSAs are particularly well adapted to building funds over time for future medical bills.

Increase the percentage of your 401(k) or IRA contributions

You may contribute $4,000 to your IRA or $8,000 to your 401(k) each year (k). If you fear falling behind on your savings, you should try to catch up, even if it means temporarily putting an extra $20 per month into your retirement plan.

It will benefit you more if you can save additional money on top of what you already have. To accomplish this aim, go over your financial plan and select which costs you are willing to cut.

The sacrifice required will most likely be difficult. Consider this: would you rather retire and be forced to spend all of your time inside due to a lack of amusement, or be able to take a modest trip over the following few years?

Invest Your Savings

You shouldn’t just leave the money in your IRA or 401(k) account alone. Instead, invest that money to grow it into a larger sum over time â€“ this is especially important if you’re already falling behind on your savings goals.

If you have an IRA, you should invest in stocks rather than bonds because stocks tend to gain quicker than bonds. Because you usually cannot purchase individual stocks through a 401(k), broad market index funds are an ideal alternative to consider if you have one of these retirement savings accounts.

Don’t let your worries about retirement get the best of you

Everyone finds change difficult, and transitioning from working to not working is a significant concern. Many people have worked since their teens and understand how to manage a consistent influx of revenue. We’re talking about years of consistent behaviors and a way of life. The transition will almost always cause anxiety on a human and psychological level. Will I run out of money if my paychecks stop coming in? What will I do after my career and steady income cease? So, it’s normal that the adjustment will cause anxiety.

Worry comes in a variety of flavors. It exists for a variety of reasons. As you might expect, money is the basis of this phobia. The irony is that money may be a symptom or, at the very least, a symbol of the real issue.

Consulting with a financial advisor and devising an action plan may be the most effective strategy to alleviate retirement resource concerns.

There’s a lot of excitement and fear of the unknown when thinking about retirement. However, retirement is far more than a goal or a destination; it’s the start of a new journey.

Findings from Edward Jones show that preparing for this new journey consistently improves retirees’ quality of life in retirement, even in the face of a global health crisis.

Contact Information:
Email: [email protected]
Phone: 7705402211

Bio:
Mack Hales has spent the past 4 decades helping clients prepare for retirement and manage their finances successfully. He also works with strategies that help clients put away much more money for their retirement than they could in an IRA or even a 401k. We involve the client’s CPA and/or their tax attorney to be sure the programs meet the proper tax codes.

Mack works with Federal Employees to help them establish the right path before and after retirement. The goal is to help the client retire worry-free with as much tax-free income as possible and no worries about money at risk of market loss during retirement.

Mack has resided in Gainesville, GA since 1983, so this is considered home. Mack is married to his wife of 51 years, has two boys and five grandchildren.

Disclosure:
All materials contained in this article are licensed for use by Bedrock Financial Services, LLC and are the property of Bedrock Financial Services, LLC. Copyright and other intellectual property laws protect these materials. Reproduction or altering, distributing, copying or reproducing these materials is prohibited, without the express written consent of Bedrock Financial Services, LLC. Reproduction of the materials, in whole or in part, in any manner, without the prior written consent of the copyright holder, is a violation of copyright law of the United States. (17 U.S.C. 101 et seq.)

If you Want to Retire Stress-Free, you Need to Diversify Your Investments

February 5, 2024 /by kevin wirth

Twenty years ago, a dollar that you saved lost roughly half its value. Both seniors nearing retirement and those already retired are at risk from this kind of inflation. Since 2000, the buying power of the US dollar has dropped by an astonishing 44.2%. According to data from the government’s own Bureau of Labor Statistics (BLS), inflation seems to be worse than previously thought. While interest rates are at historic lows, the inflation-inducing practices of the Federal Reserve may work against them.

Retirees and pre-retirees, how does this affect you?

Your advisor or team has certainly brought up the concept of “diversification” at some point. Although it was formerly considered a “good notion,” diversity has become an urgent need since 2020. Diversification seems the only way to thrive in an increasingly turbulent investment market. A retiree’s worst nightmare is to outlive their funds. Thus, diversification or so-called “hybrid” retirement plans are vital.

Financial planning includes measures to reduce risk and increase return on investment (ROI), such as diversification. However, despite the advice of some financial gurus, there is no shortcut or “one size fits all” template that may decrease the time it takes to get started. Generalizing the best way to allocate a portfolio is impossible since every investor is different. In the opinion of some financial experts, diversification can only be achieved by investing in every asset class.

Possibilities and Hazards

What is the best way to diversify one’s portfolio?

Keeping track of and managing different assets is a hassle for many individuals. Therefore, they don’t want to distribute their money around. Retirees and those who are approaching retirement should consider several sources of income. Each of these assets has its own set of advantages and disadvantages, as well as development potential.

It is called the Social Security system!

Social Security is a reliable source of income for retirees, but they should not rely on it as their only source of retirement funds. Utilizing fixed-interest debt instruments, such as bonds, is a systematic way to establish a wide range of retirement plans. Interest in these types of investments is typically paid twice a year. Upon maturity, the investor receives a return on the initial investment. There is excellent potential for expansion, but recent volatility has shown that more significant dangers typically accompany this growth.

This alternative must be carefully weighed against the potential risks and the time it will take for any financial losses to be recovered. Considering the recent COVID-19 epidemic, Wall Street’s results have become increasingly shakier, which means that seniors who invest too much in the market may not recover for years. When stock prices fall, retirees may be forced to take more significant sums of their investments, contributing to quicker depletion of retirement resources.

Consider consulting a professional financial advisor to see whether you have enough money invested in equities. These are investment vehicles that are considered “safe money.” Permanent life insurance and annuities are the building blocks of a secure retirement. Making a portfolio centered on these tried-and-true items makes more sense than throwing them in as a last-minute addition. There are several benefits to investing in less risky and tax-friendly goods, many of which give guaranteed income streams.

Your ability to plan will improve since you know you have a reliable source of money. As a result of this, unlike stocks and other investments, your money is safe. Using these goods may also leave a lasting impression on the people you care about. In addition to the tax benefits that annuities and life insurance providers offer, these safe-money products are also an excellent way to save for the future.

Other options for diversifying your retirement portfolio exist, and they are based on your hunger for growth and your level of risk tolerance. Due investigation and study should be done before making any of these more “exotic” investments. To get straight answers concerning money, consult a reputable financial counselor who will not attempt to upsell you anything.

Financial blunders might hurt your happiness when you no longer have a job. Fortunately, feasible alternatives to conventional planning and a “hybrid” portfolio may help you avoid making these blunders.

Contact Information:
Email: [email protected]
Phone: 9143022300

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914-302-2300

Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.

Ways to Avoid Unnecessary Penalties in the event of the Death of a Spouse.

January 20, 2024 /by mack hales

As you get ready for retirement, double-check your Social Security benefits. The loss of a spouse is one thing that can have a significant financial impact on your retirement plans.

If your retirement income includes Social Security payments, you should know that you cannot claim both your own and the benefits of a deceased spouse at the same time. Social Security pays out the larger of the two amounts.

3.7 million persons receive Social Security payments based on their deceased spouse’s work record, according to the National Academy of Social Insurance. Another 3.8 million persons are eligible for benefits, but they receive them as a surviving spouse because the amount is higher.

The surviving spouse usually receives the same amounts of Social Security benefits as the deceased spouse. The couple must have been married for at least nine months before death to be eligible for these benefits. Also, the surviving spouse would only be able to file once they reach age 60.

However, this isn’t always the case.

If your spouse passes away, you can take steps right now to avoid incurring excessive Social Security fines.

Make sure your spouse doesn’t start collecting benefits until they’ve reached Full Retirement Age (FRA).

Your spouse can increase the amount of their Social Security benefits and any survivor benefits you receive by waiting until they reach the age of 70 to file.

Also, wait until you’ve achieved FRA before applying for survivor benefits.

You can file for survivor benefits once you reach age 60 if you are disabled. However, this may not be the best decision if you want to avoid penalties. If you claim survivor benefits earlier before reaching FRA, your payments will be reduced by 71.5% to 99%.

Do not remarry till you are 60 years old. (If you’re disabled, it’ll be 50).

If your spouse dies before you turn 60, you may be eligible for survivor payments unless you remarried before then. You will not be entitled to survivor benefits if this is the case. After turning 60, you can keep your survivor benefits (or 50 if disabled) if you remarry.

If you’re still employed, be aware of your earnings limitations.

While you can collect survivor benefits while working, be aware that earnings limits will lower your monthly payments if you haven’t reached Full Retirement Age (FRA). Earnings caps are established by your age and alter every year.

If you are qualified for survivor benefits and have been receiving them due to your spouse’s job history, they will begin as soon as your spouse’s death is reported. You can call the Social Security Administration (SSA) and make an appointment to apply.

Contact Information:
Email: [email protected]
Phone: 7705402211

There’s So Much You Should Know About Retirement Planning

January 20, 2024 /by jason anderson

According to a survey, many workers misunderstand fundamental retirement income issues, indicating those plan sponsors should endeavor to improve participants’ understanding of financial and economic principles.

In the Insured Retirement Institute’s (IRI) “Retirement Readiness Among Older Workers 2021” survey, 26% of respondents were able to estimate the correct amount of annual income they would need in ten years to maintain their current living standards, accounting for a yearly 3% rise in inflation.

“Knowing how inflation will affect your spending power is vital for retirement planning,” says Frank O’Connor, IRI vice president of research. “Retirees must recognize the necessity of allocating a percentage of their retirement investment portfolios to risk assets, which have a better chance of keeping up with inflation than ‘safe’ investing options.”

Participants can offer themselves a constant stream of protected income for each month of their lives by putting a portion of their retirement assets into annuities while investing the rest of their resources to generate growth.

IRI also discovered that only around a third of respondents correctly assessed the monthly income that can be securely removed from an investment portfolio.

“Failure to comprehend the amount of monthly income that retirement savings might create could lead to unduly optimistic retirement income expectations, hastening the depletion of retirement funds. “This also highlights another advantage of annuities: using a portion of savings to lock in lifetime income is a disciplined method to invest assets and avoid overspending.”

Plan sponsors should consider incorporating exposures to a mix of asset classes, both within the suite of target-date funds and on the investment menu, for inflation protection.

According to the survey, nearly 70% of participants do not understand that when taking regular withdrawals for retirement income, it is preferable to endure a significant market correction late in retirement rather than in the beginning.

“Failing to consider the sequence of returns risk immediately before or during the early stages of retirement could have a significant negative long-term impact on retirement savings, resulting in the exhaustion of financial assets while income is still required.

When asked what the average monthly Social Security retirement payout is, 42% correctly stated $1,500. However, the average monthly benefit was overestimated by 40%.

Retirees should speak to a financial advisor to build a retirement plan that includes ways for earning protected income that cannot be outlived.

Contact Information:
Email: [email protected]
Phone: 3234811328

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

► Like to discuss your personal financial situation?
☏ Call Jason at (323) 481-1328 for a FREE Consultation
✉ Email him at [email protected]

Top 4 Social Security Mistakes That Could Cost You Your Retirement Savings

January 14, 2024 /by aaron steele

Social Security is the most effective federal program in the US. Almost 66 million Americans get monthly benefits, with payments totaling more than $1 trillion this year. Furthermore, another 182 million Americans presently work in positions covered by Social Security, implying that they will most likely get benefits in the future.

Like many federal programs, Social Security has nuanced regulations and limitations that make it challenging to comprehend. Here are four mistakes that can cost retirees and their spouses a lot.

Filing for Social Security Too Early

Your average earnings determine your monthly Social Security payment amount during your 35 highest-paying years of employment. Also, your age when you begin collecting benefits is still considered in factoring your average earnings.

Even if you are still working, you are eligible for Social Security at 62. However, you will not qualify for the full benefit (also known as the principal insurance amount, or PIA) until you reach full retirement age (FRA). Suppose you apply for Social Security before the FRA. In that case, you will face a permanent reduction in payments of up to 30%, though the exact amount varies on when you receive your first check.

Delaying Social Security beyond FRA, on the other hand, results in a permanent boost in payments of 8% per year. However, these delayed retirement credits cease accruing at the age of 70. In other words, retired workers can optimize their Social Security payments by deferring benefits until 70, but delaying any longer is pointless.

Ignorance of Social Security Spousal Benefits

The spouse of a retired worker may also be eligible for Social Security payments based on that person’s wages, but spousal benefits are calculated differently. Most significantly, spouses can receive up to 50% of a retired worker’s PIA. However, the amount spouses receive each month is determined by the age they apply for benefits.

Again, eligibility begins at age 62. Spousal benefits, like those provided to retired employees, are permanently reduced if spouses claim Social Security before FRA. However, this scenario has no credit for postponing benefits beyond FRA. Nonworking spouses can increase their Social Security income by beginning benefits in the month they attain FRA. Waiting any longer makes no sense.

Specific individuals lack the luxury of waiting until FRA.

Failure To Enroll in Medicare During the Open Enrollment Period

Medicare, or the Federal Medicare Program, is a health insurance plan for those over 65. When Social Security recipient reaches age 65, they are automatically enrolled in Medicare Part A (inpatient insurance) and Medicare Part B (outpatient insurance). Medicare applications must be submitted by 65-year-old seniors who have not yet applied for Social Security.

In that case, your Initial Enrollment Period (IEP) begins three months before your 65th birthday. It ends three months after your 65th birthday. For example, if your 65th birthday is in June 2023, your IEP will last from March 2023 to September 2023.

Medicare Part A is free for seniors who have paid Medicare taxes for at least ten years, while Part B requires a premium, which increases if you sign up late. If you miss your IEP, you’ll usually have to wait until the next General Enrollment Period. You’ll have to pay a 10% monthly late enrollment penalty (based on the average Medicare Part B premium) for each full year you don’t sign up. To make matters worse, you must pay the penalty for the duration of your enrollment in Medicare Part B.

Most Retirees Overlook The $18,984 Social Security Bonus.

Most Americans are behind on retirement savings for a couple of years (or more). However, a few little-known “Social Security secrets” could help you increase your retirement income. For example, a straightforward method might earn you up to $18,984 yearly! We believe that you can retire securely if you understand how to optimize your Social Security benefits.

Not considering Social Security Tax

Many Americans appear to be uninformed that the federal government may tax Social Security benefits. However, your total income will determine the total tax liability. Therefore, your Social Security benefits might be taxed regardless of your financial situation.

Conclusively, you must take note of these social mistakes to avoid ruining your retirement benefit.

Contact Information:
Email: [email protected]
Phone: 3604642979

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Tag: Social Security

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