Social security

You and Social Security: There’s a purpose for everything

October 9, 2023 /by jason anderson

How to Apply for Social Security Benefits as a Child

Children who qualify can get Social Security benefits based on the work history of their parent(s). The Social Security earnings of the parent(s) must be sufficient. If they meet the following requirements, biological, adoptive, or stepchildren can qualify for Social Security benefits:

They have a parent who qualifies for Social Security payments due to a disability or retirement.
They are single
They are high school students enrolled full-time, and under 18 or between 18 and 19 years old.
They are disabled and older than 18 (as long as the disability began before they turned 22).

The following illustrations will help you better understand social security benefits for children.

1: Student benefits end after they graduate and turn 19 years old.

Williams turned 18 in March and finished his secondary education in May. His benefits expired in June because he has no intention of continuing his enrollment in a program at the secondary level.

2: When a student completes high school before turning 19 and enrolls in FTA for a secondary-level course. Her student benefits expire before the age of 19.

Emma turns 18 in April and completes her secondary education in June. She intends to continue her FTA work at a secondary school from September through December after taking a vacation in July and August. She is no longer in the FTA. Thus, her benefits expire in January.

3: The student completes high school before turning 19 and enrolls in FTA for a secondary-level course. Her student benefits expire when she turns 19.

Emma turns 18 in April and completes her secondary education in June. She enrolled in FTA for a secondary-level course in September and will remain enrolled until June. Emma will get benefits based on her FTA in a secondary-level program through March. She has already completed secondary school, so her benefits end in April when she turns 19 years old.

4. The student turns 19 years old after missing a month of class.

Benjamin completes his junior year of high school in May, takes two months off for vacation, turns 19 in July, and intends to start secondary school again in August. His benefits are still in effect through June, but they stop in July because he turns 19 during that month of absence.

5. If a student turns 19 during an FTA month and the school is a 12-month institution, the student’s advantages end on the first day of the third month after the month of turning 19.

Amy turns 19 years old in February. Her school operates on an annual schedule, with the academic year lasting from September to June. Amy receives payments through April, and after that, her benefits end in May, the third month after she turns 19.

6. The student reaches the age of 19 during an FTA month; the school is a 12-month institution. The student’s benefits end on the first of the month following the month in which the student completes the academic year in which they are enrolled.

Amy turns 19 in April and continues her high school education through May. She’s on vacation in June and July and will be back in August to start her senior year. Her benefits last until May, when she finishes the academic year for which she is registered in the age 19 attainment month, ending in June.

7. The student turns 19 during the FTA month, the school works on a semester or quarterly schedule and requires re-enrollment, and the course ends on the first day of the third month following the student’s 19th birthday.

Joseph turns 19 on September 3. His school operates on a semester system, and enrollment is required each semester, according to the SSA-1372. The semester runs between September 18 and November 30. When Jacob turns 19 and two months old in November, he’ll still receive benefits until December, when it’s terminated.

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.

Stay Away From These States To Protect Your Social Security Benefits.

September 27, 2023 /by jason anderson

Should you stay away from specific states due to benefit taxes? Some people aim to save enough money so that Social Security is no longer a concern for them – that is, they don’t care what benefit they receive when they retire. However, Social Security is a lifeline for many seniors, so doing everything you can to maximize your payout is critical.

You can now take a variety of steps to increase your benefits. For one thing, you can put off filing for Social Security until you’re 70 years old. Waiting that long will pay off handsomely, and the boost you get is yours to keep for the rest of your life.

Another thing you may do to get better benefits is to avoid residing in a state that taxes them. Although most states do not tax Social Security benefits, 13 do, and knowing what states are on that list can help you keep more of your money.

You might want to avoid these states.

These 13 states tax Social Security benefits:

Colorado
Connecticut
Kansas
Minnesota
Missouri
Montana
Nebraska
New Mexico
North Dakota
Rhode Island
Utah
Vermont
West Virginia

However, this list does not tell the complete story. Many of these states provide an exemption for low- and even moderate-income taxpayers. As a result, if Social Security accounts for the majority of your retirement income, you may not be subject to state taxes regardless of where you choose to live.

But what if you’re counting on your retirement assets to provide a constant source of income? If you retire in one of the states listed above, you may face taxes on your Social Security income. Even if this is the case, you might not want to dismiss them.

Several of these states have other advantages, such as a low cost of living. Furthermore, even if you can avoid paying state taxes on your Social Security benefits, that income may be subject to federal taxation.

The income levels for federal taxes on Social Security benefits are quite low. So, if you’re already planning to pay them, state taxes might not be a deal-breaker.

Prepare yourself.

Some seniors are astonished to find that some states tax Social Security benefits. However, many people are surprised to learn that such benefits are subject to federal taxes as well.

You don’t have to retire in one of the 13 states that tax Social Security benefits. However, you should investigate that tax rate to see if you are eligible for an exemption.

Reading up on the costs you’ll face in retirement will help you plan ahead of time, and you’ll be better prepared to prevent financial stress and make any living arrangement work.

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 Avoid These 5 Common Social Security Mistakes in Your Golden Years

September 15, 2023 /by jason anderson

An increase in monthly benefits for almost 70 million Social Security recipients is expected in 2022 due to the agency’s decision to include a 5.9% Cost-Of-Living Adjustment (COLA).

However, there are other misunderstandings about Social Security benefits that many individuals do not know about. As a result, seeking the advice of a fiduciary financial counselor is critical. These finance experts can evaluate your retirement plan and assist you in determining how the benefits from Social Security fit into your overall strategy.

According to a 2021 Northwestern Mutual poll, 71% of Americans see the need for better financial planning. However, just 29% of Americans have a financial counselor working for them.

As a result of this study, individuals who work with a financial adviser feel more at peace about their finances and have an additional 15% more money to spend in retirement, which is based on the fact that advisers are legally banned from guaranteeing returns.

Over 25 years, an investment of $500,000 from Vanguard would increase to over $3.4 million on average, whereas the predicted value from self-management would be half that at $1.69 million. An advisor-managed portfolio would increase at a rate of 8% per year over 25 years, whereas a self-managed portfolio would only grow at an annual rate of 5%.

With the help of SmartAsset’s free service, choosing a financial adviser is no longer a laborious task. An easy-to-fill-out questionnaire lets you connect with up to three local fiduciary financial advisers who are legally required to act in your best interest. Advisors are screened and subjected to our due diligence requirements throughout a brief procedure that takes no more than a few minutes.

Your Social Security payments will be available shortly if you’ve reached Full Retirement Age (FRA). Avoid these common mistakes, which might significantly affect the compensation amount you receive.

Not making the most of your money

Earning as much money as possible during your career to maximize your Social Security benefits is crucial. The employees will be taxed 6.2% in 2021 on salaries up to $142,800.

Worked less than 35 years

To arrive at your ultimate benefit, the government looks at your total earnings during the 35 years you worked the hardest. The Social Security Administration (SSA) uses the Average Wage Indexing Series but adds zeros for every year you are younger than 35 years old since wages vary over time.

Adopting Early Acceptance of Benefits When They Are Made Available

Social Security payments may begin before age 62, but you’ll forfeit 30% of your benefits for that year. However, the benefits you get when you’re 62, 66, or 67 years old aren’t your maximum benefits. Every year you delay receiving benefits until you reach the maximum benefit at age 70, your benefits will rise by 8%.

Ignoring your spouse’s financial needs

If you and your spouse have been married for at least ten years, you may defer filing for your benefits and get half of your spouse’s benefit (although several conditions may apply). A higher-earning spouse may benefit you since spousal benefits are calculated depending on the spouse’s wage. As a result, widows and widowers might also benefit from a spouse’s increased income.

The failure to consult a financial counselor in advance

Some financial experts specialize in Social Security preparation and can assist you in deciding when to take your benefits and how to avoid tax pitfalls. They may also be able to aid you in determining exactly how the benefits you get go into the computation of your income in retirement. This may reduce your reliance on the tax-advantaged accounts, enabling your savings to continue to grow tax-free.

Your neighborhood is likely home to several highly competent financial advisers. However, choosing one might prove to be complicated.

You can quickly and easily locate an experienced and trustworthy financial adviser using our no-cost service. You may now be connected with up to three verified and subjected to our due diligence standards fiduciary investment advisers that service your region. To finish the whole process of matching, you’ll only need a few minutes.

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]

The Hazards of Working After Retirement

September 14, 2023 /by joe carreno

When they reach retirement age, some individuals’ top priority is to give up any and all types of employment for the remainder of their life. On the other hand, some could wish to try a different tactic.

Working after retirement may be beneficial in a number of different ways. To start, there’s the financial aspect. If you work and add extra cash to your income, you may supplement those benefits well. This is because Social Security does a lousy job of keeping up with inflation on a regular basis.

In addition, many people cannot bring a sizeable amount of funds into retirement. It is in your best interest to increase your income by working if your 401(k) or IRA balance isn’t something to write home about.

What To Do?

Working also has the potential to provide benefits to one’s social life and mental health. It might be challenging not to have any routine to guide your days, but if you have a job, you’ll have somewhere to go regularly. Working might provide you with a welcome social outlet at a time when you would otherwise start to feel isolated from the outside world.

Even though continuing to work after retirement brings with it many apparent advantages, doing so also brings with it the possibility of facing some disadvantages. The following are several things to bear in mind:

You May Wind Up Paying More In Taxes

There is no standard tax rate that everyone must adhere to while filing their returns. Instead, the top earners have a more significant proportion of their income subject to taxation, which applies to their most considerable dollar amounts of earnings.

In this regard, your entire income will be considered, including withdrawals from your retirement savings and Social Security payments. If you continue working after retirement, you might find yourself in the position described above.

You May Lose Social Security Benefits

Several individuals decide to begin collecting Social Security benefits before the traditional retirement age (FRA). If you do the same thing I did and then decide to get a job, you may find that some of your benefits are reduced or eliminated, depending on how much money you make.

You are allowed to earn up to $19,560 without affecting the advantages you receive this year. From that point on, however, you will have one dollar deducted for social security for every two dollars of income you bring into the country.

If you hit FRA this year, you can earn up to $51,960 more income before reducing your benefits. After that, you will have one dollar deducted from social security for every three dollars of income.

Should You Maintain Your Current Job After Retiring?

Even if you do end up in a higher tax bracket as a result of working during retirement and even if you do end up having some of your Social Security income withheld if you apply for benefits before your full retirement age (FRA), having a job in retirement could still end up being a very positive thing for you in the long run. You should be aware of these traps and plan around them – or make decisions to avoid them – to prevent getting caught.

In the case of the latter, this may imply delaying filing a Social Security claim until the FRA if you are aware that you would wish to continue working in some manner after retirement. After you achieve your FRA, you are free to earn as much money as you like without fear that it would in any way affect the benefits you receive from the government.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants.

We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.

Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.

Misinformation About Medicare Can Hurt Older Americans in Retirement

September 9, 2023 /by marvin dutton

When you retire, healthcare may become your single largest recurrent cost. That’s especially true if your home is paid off by the time your career ends.

That’s why it’s critical to understand what to expect from Medicare when the time comes to begin receiving coverage. However, according to new Fidelity research, older Americans aged 58 to 76 lack a critical understanding of Medicare coverage and enrollment. And this might lead to a world of financial hardship.

Closing a Huge Knowledge Gap

When Fidelity questioned Baby Boomers about when Medicare enrollment starts, 57% said age 62. While seniors can join Social Security at that age, Medicare eligibility doesn’t start until age 65.

Early retirees may face difficulties if they’re unaware of this. If you decide to quit the workforce at age 62, assuming you’ll be covered by Medicare, only to find out that you won’t be for another three years, you may struggle to afford a new health plan.

Moreover, 41% of Baby Boomers polled by Fidelity claimed Medicare has out-of-pocket spending restrictions. However, enrolling in a Medigap plan is the only method to reduce out-of-pocket expenses (supplemental insurance). If you don’t know, you might be on the hook for a slew of medical bills you can’t afford.

Finally, 40% of Baby Boomers believe Medicare pays the cost of nursing home care. That’s incorrect. When it comes to healing from an injury or treating an actual sickness, Medicare will cover the cost of a stay in a skilled nursing facility. However, Medicare won’t cover custodial care or assistance with daily living. Long-term care insurance is required to obtain this coverage.

Don’t Set Yourself Up For Financial Stress

Not understanding how Medicare works might put you in a situation where you’re ill-equipped to cover your future healthcare costs, which is something you should avoid. And you may do so by spending some time researching Medicare before you decide to retire.

At the same time, it’s a good idea to set aside money for future healthcare costs, and a health savings account (HSA) is a smart way to do so. HSA funds never expire, so you may contribute to them during your working years, invest the money you don’t need right away, and carry a comfortable balance into retirement.

You may have heard that an HSA cannot be used to cover Medicare expenditures, but that’s not true. While you cannot contribute to an HSA once enrolled in Medicare, you can withdraw funds to cover Medicare deductibles and copays.

In fact, while you’re researching Medicare, you should also learn more about HSAs. Knowing such information may motivate you to make wise decisions that will help you to cover your future healthcare bills with less worry.

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].

Understanding the relationship between retirement and inflation

August 27, 2023 /by jason anderson

Inflation affects housing costs in a variety of ways. Home prices are at record highs and have increased significantly over the previous ten years. Higher home values make it more challenging to purchase properties, resulting in larger property tax assessments and, thus, higher tax liabilities. Insurance rates will also rise with material costs for replacement value. Appliances, furniture, and household energy have all been highly unstable.

Tax rates are unpredictable from a policy perspective; they are not directly impacted by inflation. The federal tax brackets and many other tax-related factors (deductions and credits) are adjusted for inflation to counteract the annual loss in purchasing power. The Tax Cuts and Jobs Act, which came into force in 2018, currently expires after 2025.

Healthcare costs have also increased significantly. Since this trend is likely to continue, it is reasonable to anticipate that future increases will be more than the inflation rate. Health insurance premiums can rise over time to reflect changing expenses.

The final message is that we may anticipate rising expenses, which can occasionally be highly unpredictable.

What happens to a FERS pension and Social Security income when inflation is high?

The good news is that cost of living adjustments (COLAs) are included in FERS Pension and Social Security for people already receiving payments.

The rises in Consumer Price Index (CPI-W) serve as the FERS pension COLA foundation. You receive the CPI increase if the CPI is 2% or less, a 2% COLA increase if the CPI is between 2% and 3%, and a CPI minus 1% if the CPI is beyond 3%. A retiree or surviving annuitant must have received payments for the entire year to be eligible for the full COLA. However, earlier retirement could cause issues because pension COLAs don’t begin until age 62. This is a fairly fantastic offer all around.

Additionally, COLA increases based on the CPI are included in Social Security income. The earliest you can apply for benefits is at age 62.

These increases offer a reasonable inflation hedge for these sources of retirement income, even though they might not precisely match the price increases associated with your particular expenses.

However, both sources of income perform best with a later retirement date.

How are you going to stay ahead?

When people talk about retiring, one of the first things they often say is, “I can’t afford to lose any money.”

While it makes total sense, this thinking can occasionally be harmful.

To stay ahead of the decline in purchasing power, we must grow more quickly, which requires investment. Stock investing can be a crucial weapon in the long run against inflationary forces.

Your portfolio must also contain a blend of cautious and growth-oriented investments. The ideal combination is unique to you, and preparing ahead of time for income requirements may be a wise strategy for building your portfolio.

Having you ready?

Hopefully, your calculations will reveal that you have more money than you need. But more often than not, it’s close. That’s because we tend to raise our standard of living as our careers and income growth over time, and it’s typically challenging to turn back on something like this.

If you’re younger than 62, inflation can be problematic. You will depend on assets and other sources of income to keep up the pace until FERS COLAs start, and you decide to file for Social Security. In addition, there is a longer time frame to account for in your planning.

If working longer than wanted or anticipated, it can assist if things get too close for comfort.

This is not the preferable response, but let’s think outside the box! Seek opportunities to accept a more accommodating position, permitting telework or shorter hours. Your current high-3 remains in place even if you keep working toward the 1.1% multiplier, get paid, and make investing contributions.

Inflation has been roughly 2.5% per year on average during the past 30 years. A 65-year-old retiree who needs $50,000 in income to pay daily costs would have to spend around $80,000 in 20 years to retain their purchasing power. So inflation is a significant factor in retirement, and it’s essential to plan for it despite the prospects of COLAs.

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]

Are Women Less Influential When it Comes to Investments?

August 15, 2023 /by marvin dutton

According to a study conducted by Bank of America, while they are superior at making investment decisions, the rate at which women make investments remains low compared to their male counterparts. Time and time again, the data proves the advantage of women in self-control, conducting research, and even determining risk aversion when it comes to investing. With only 46% of women feeling as though they have a small degree of influence over investing, it’s no wonder they are held back by obstacles. What are some of these roadblocks, and how are younger women pioneering future generations toward an open conversation about finances?

Financial freedom is dependent upon both short-term and long-term financial planning and the confidence to progress in that direction. Long-term finances happen to be one of the biggest issues faced by women of today. Up to 94% of women feel they will become solely responsible for finances within their lifetime, with only 28% of said women feeling empowered enough to succeed. Among the women within this study, 44% struggle to pay down debt, with other issues including emergency funds, retirement savings, and the ability to build wealth.

When it comes to financial independence, though, just 47% of women recognized paying off debt as the cornerstone of financial freedom. Additional concerns include unexpected expenses, funding education for future generations, and caring for aging parents. Putting money away for retirement is another concern for men and women alike, with over 40% of women feeling uncertain about enjoying a comfortable retirement. Unfortunately, most women beginning to reach retirement age have already resigned themself to relying solely upon a fixed income through Social Security benefits.

As pioneers toward open conversations regarding finances and investing, younger women may be the key to changing the course of history for themselves and future women. Women between the ages of 22 to 39 feel more comfortable conversing over finances with others, such as financial advisors, than their aging counterparts. Could this be the cause behind upwards of 65% of younger women freely willing to discuss new investment opportunities, whereas 59% are more confident in requesting raises throughout the workplace?

This isn’t just a problem in the United States, but a worldwide struggle for women alike. Words such as â€œmale-dominated,â€ â€œpatronizing,â€ and â€œuntrustworthyâ€ are just a few of the more prominent phrases used by women with a strong aversion to the stock market. Shockingly enough, although most of the women who participated in another British-based study were solely responsible for the majority of the household finances, not one had ever invested in stocks. Ultimately, more than one-third of the women who chose to participate in either study noted the availability of a trustworthy source for financial advice could mean a world of difference.

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

TSP Strategies- Are You in Control of the Market or are You Being Played?

August 15, 2023 /by jason anderson

What do a Las Vegas gambling trip and stock (or bond) market timing have in common? Frequently, the same thing. Most people at a casino or home watching Wall Street let their emotions rule. People that are nervous zig when they should zag. They were lost before they even got out of the starting gate.

So, how should you handle what matters most in these exciting timesâ€”your retirement nest egg, the TSP? It’s an uncertain time with issues ranging from the Ukraine war to record inflation and soaring gas costs, which are expected to deteriorate even further. Perhaps even worse! In difficult times, most federal TSP accounts are vulnerable. Remember that it might provide anything from one-third to one-half of your retirement funds. And the greater the sum and the later you begin spending it, the better.

The 100,000-plus TSP millionaires (as of December 20, 2021) shared a few characteristics.

Except for a few politicians, political appointees, and federal judges, the vast majority were not already millionaires.

Most invested in the TSP stock funds regularly for an average of under 30 years, particularly during difficult times (2008-2009) when the markets were down. As it turned out, market timers sold low, while steady-as-she-goes investors acquired equities at low prices.

When things are going well, many investors know what to do. The fight-or-flight response occurs when things go wrong, which they frequently do in times like these. So we’ve asked a few financial planners what they’re advising their active and retired clients these days.

Here’s what they said.

The TSP has a double-down dose.

Except for G, the value of all TSP funds fluctuates. That includes both down and up. And, except for G, the stock and bond funds both fell in the last quarter.

How bad did it get? The first-quarter returns for the five traditional funds are explained here.

First of all, all L Funds, including L Income, fell in the first quarter.

According to the Wall Street Journal, on April 1, 2022, bond markets fell at a rate not witnessed in over 40 years, while equities had their worst quarter in two years. Among the reasons are:

The Federal Reserve raising interest rates,
inflation skyrocketing to its highest level in forty years,
Russia’s invasion of Ukraine, and
a downturn in the Chinese economy.

During the first week of April, both the bond and stock markets continued to fall.

So, that’s unsettling. However, what does it mean for TSP participants?

It indicates that participants must focus on longer-term returns for funds needed in five years or later. However, past performance is no guarantee of future results, long-term returns for US stock funds strongly outpaced bonds and overseas equities.

Employees not nearing retirement should be aware of two investment risks: volatility and market drops. However, the drops provide an opportunity to “buy low” with bi-weekly contributions.

Retirees supplementing their Annuity and Social Security benefits with TSP withdrawals should aim to withdraw from their G Fund holdings until the other funds recover. Unfortunately, participants in the TSP cannot withdraw from only one of the funds they’re currently invested in. Withdrawals are made from each of the funds in proportion to the participant’s current allocation. If you have 50% in G and 50% in C, half of your withdrawal will come from G and half from C.

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]

Stay Alert — Nine Indicators You’re Being Scammed for Social Security

August 15, 2023 /by michael crowe

Your Social Security number (SSN) is one of the most crucial pieces of personal information you have. The Social Security Administration (SSA) distributes Social Security payments to you using your unique nine-digit number, which is also necessary when applying for employment or enrolling in federal government programs. Due to its significance, safeguarding your Social Security number is critical.

However, Social Security numbers make you vulnerable to identity theft, and a thief can exploit your SSN for various illegal objectives. In addition to attempting to deceive the SSA, an identity thief can apply for jobs in your name, empty your bank accounts, start an account in your name, sign up for false credit cards, make purchases, conduct tax fraud, and seek medical help.

According to AARP, about 312,000 Social Security frauds were recorded during the five years ending December 31, 2021, with total losses exceeding $95 million. As per AJ Monaco, a special agent in charge of the big case team at the SSA’s Office of Inspector General, Social Security imposters have stolen up to $1 million from victims.

Scammers are deceptive, but they may also be convincing and appear “official,” so you must remain vigilant. Be cautious if you receive unsolicited communication from someone claiming to work for the SSA, someone requesting your Social Security number, or someone threatening you with consequences such as suspension of your SSN, loss of benefits, or arrest if you don’t make an immediate payment – these are common indicators of a scam. The SSA won’t phone, email, or text you unless you have already communicated with the agency.

Impersonators frequently contact about a reported problem with your Social Security number, alleging that it has been related to a crime. They’ll ask you to validate your phone number so that it may be reactivated or replaced for a charge. Or a call may arrive with good news in the shape of a higher benefit in exchange for your private information and SSN (and possibly a small fee). If you provide them with your phone number, a scammer might quickly steal your account and reroute your benefits.

The SSA-OIG website provides nine warning indications of a Social Security fraud. If someone calls, emails, texts, or messages you on social media, assume it’s a scam:

1. Threatens to suspend your SSN, even if they know a part or all of it

2. Warns of arrest or legal action

3. Demands or asks for urgent payment

4. Requires payment using a gift card, prepaid debit card, electronic currency, or by sending cash.

5. Demands personal information from you

6. Requests confidentiality

7. Threatens your bank account with seizure

8. Guarantees that your Social Security benefit will increase

9. Attempts to earn your trust by presenting fake documents, false proof, or the name of a legitimate government person.

If you have had communication with a Social Security impersonator or suspect someone of perpetrating fraud or abuse, please report it to the SSA-OIG complaint submission portal, which you may find here. Monaco also advises keeping a “security attitude” and sharing scam information with individuals you know to help them protect themselves.

Contact Information:
Email: [email protected]
Phone: 6023128944

Bio:
Mike was born in Chicago, Illinois on August 13, 1946. He was brought up in the
suburb of Skokie on Chicago’s northwest side and graduated from Niles Township (
East ) high school In 1964. Two years later he joined the US Air Force in November of
1966. After 2 years of Intense training he volunteered for Viet Nam and was sent to
Bien Hoa Airbase, which was 25 miles from Saigon, the nation’s capital. He
volunteered for a number of especially dangerous missions on his days off, such as
flying as a door gunner on a US Army helicopter and as a technical assistant on a
psychological operation on an Air Force O-1E observation aircraft. Capping off his
impressive accomplishments was winning the coveted Base Airman of the Month for
March 1969, a feat which was featured in the Pacific Stars And Stripes newspaper
read by every service man stationed in the Pacific theater of operations. After his
Viet Nam tour of duty he was stationed at Luke Air Force Base in Glendale, Arizona
where he met and married his wife, Lequita.
He graduated from Arizona State University in May, 1973, and after a 30-plus year
career as a financial advisor he joined a number of service organizations including
Easter Seals and Valley Forward, sponsor of EarthFest. He was also involved with the
National Federation of Independent Business and became the longest-serving
chairman of the Leadership Committee ever. He spoke before the ( AZ ) House Ways
and Means & Senate Finance committees. He then joined Disabled American
Veterans ( DAV ) in September of 2015. He rose quickly through the ranks and
became Chapter 8 Commander in May of 2019 where he served with Distinction for 3
years before being “ termed out”. The next year, as Vice Commander, he won the
title of National Champion Recruiter!

Why Should Seniors Expect a Smaller Social Security Increase in 2023?

August 14, 2023 /by joe carreno

It’s no secret that inflation is wreaking havoc on many people’s budgets. Many customers are trying to make ends meet as the cost of everything rises, from petrol to utilities to clothing to groceries.

Senior citizens are in a similar situation. Many retirees who rely on Social Security for most of their income struggle to keep up with living expenses, despite the program’s most generous cost-of-living adjustment (COLA) in decades.

Recent estimates indicate seniors on Social Security may be eligible for an 8.6% COLA in 2023. Of course, it’s too early to predict the COLA for next year because that figure is based on inflation data from the third quarter of the year, and we’re just not there yet.

In any case, it appears that Social Security payouts for seniors will increase significantly in 2023. However, whether or not this is a positive thing is debatable.

Why seniors shouldn’t expect a massive pay raise

Employers frequently hand out two types of raises. One is a merit raise, and the other is a cost-of-living boost. Merit raises are the more generous of the two, based on performance. After all, the purpose of a cost-of-living raise is to raise wages just enough to allow workers to keep up with rising costs, whereas a merit raise may help a person advance financially.

There is no such thing as a merit-based COLA in the context of Social Security. COLAs, on the other hand, are based on inflation data, and their goal is to help seniors keep their purchasing power when their living expenses rise.

However, when COLAs grow significantly, it is only because living costs are rising simultaneously. Even when Social Security receives a large COLA, it is sometimes insufficient to keep seniors afloat.

That is why, in 2023, Social Security recipients should not expect a substantial COLA. Even if the 8.6% increase is implemented, rising living costs will likely leave seniors in a financial bind, even if their benefits are increased.

The way COLAs are computed is one of the reasons for this. COLAs are calculated using information from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, the CPI-W does not accurately reflect seniors’ regular prices.

Senior advocates have urged for years that COLAs be calculated using a senior-specific index, the CPI-E, or Consumer Price Index for the Elderly, to make them more egalitarian. However, that concept has yet to gain traction and become a reality.

Seniors have been losing purchasing power for a long time

Since 2000, seniors on Social Security have been rapidly losing purchasing power. And a huge COLA in 2023 is unlikely to do much, if anything, to alleviate the problem. That is why hoping for a huge COLA is a waste of time. Instead, seniors should expect that policymakers alter the way raises are computed in the first place.

Contact Information:
Email: [email protected]
Phone: 8139269909

We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.

Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Tax Breaks for Retirement Savings Do Not Help the Workers Who Need Them Most

August 9, 2023 /by michael crowe

Tax breaks meant to increase retirement savings are expensive for the federal budget, disproportionately benefit upper-income households, and do nothing to help people at risk of poverty in retirement.

Most of these incentives’ advantages accrue to high-income households, who would save even without them and have the lowest risk of retirement insecurity. In 2019, 60% of the income tax incentives for retirement savings accounts went to the highest-income 20% of households and 1.5% to the lowest-income 20%. Social Security offers a necessary foundation, but research reveals that financial security in retirement depends on numerous income streams.

The Secure Act 2.0 expands and alters retirement tax incentives. The proposed law, which recently passed the U.S. House of Representatives, expands automatic enrollment in retirement savings plans and strengthens protections for part-time workers, but it doesn’t address the flaws in the current incentives that make them useless to low- and middle-income families.

This research explores failed retirement savings incentives and Secure Act 2.0 limitations. It then presents policy proposals to promote retirement security for individuals who gain little from the bill.

Costly, ineffective retirement incentives

The capacity to exempt pension contributions from income and payroll taxes is the second-largest federal tax expenditure, costing $276 billion in lost federal revenues in 2019.

Currently, there are two main forms of tax preferences for retirement savings. First, 401(k) and regular IRA contributions reduce a person’s taxable income. Both contributions and investment earnings aren’t taxed until withdrawn. In a Roth IRA, contributions are made with taxed income and withdrawals are tax-free. Complex rules regulate tax-favored retirement plan contributions and early withdrawals. The saver’s credit, explained below, is a modest incentive accessible to fewer taxpayers.

Higher-income households are more likely to use retirement tax breaks. In 2019, 77% of top-income quintile households received a benefit, compared to 19% of bottom-income quintile households and fewer than 50% of middle-income quintile households. In 2018, the most recent year for which data is available, 41.7% of wage earners contributed to a DC account.

High-income households have more retirement accounts and have bigger average balances than lower-income savers. Families in the top 10% of the income distribution had average accounts worth $692,800, while those in the poorest 50% had average accounts worth $57,400. While federal spending on savings incentives doubled between 2004 and 2020, retirement insecurity rose. The percentage of households in danger of not having enough retirement income climbed from 41% in 2004 to 49% in 2019.

Policies to promote retirement security should target persons with modest wages who are at risk of financial instability in old age. The current system of incentives gives high-income households huge tax breaks relative to middle-income households and little or no help to low-income families. This upside-down structure derives from factors that benefit high-income households, including:

In 2020, incentives allowed tax-sheltered savings of up to $57,000 per year in an employer-sponsored retirement plan.
That’s more than the average full-time worker’s $56,287 salary, but it helps higher-income households save more.
The greatest incentives are tax deductions or exclusions that benefit high-income savers. A $1 deduction saves a family in the highest tax bracket 37 cents, but just 10 cents in the lowest. People whose incomes are so low that they owe no tax before refundable credits like the EITC are considered will receive no tax benefits from a retirement savings plan.
Complex incentives and penalties for early withdrawals can discourage participation among low-income households without other emergency resources.
The saver’s credit, the one retirement tax incentive allegedly geared at helping lower-income households, is nonrefundable and hence delivers no or a very limited benefit to lower-income households that owe little or no tax to offset with the credit.

Despite their high and growing cost, existing retirement savings incentives have done little to reduce retirement insecurity. Current incentives cause higher-income people to move savings from non-tax-privileged to tax-advantaged accounts, but do nothing to boost total savings. The federal budget forgoes a large tax income amount each year to offer benefits to households that would have saved without an incentive, while failing to improve the retirement security of those who need it most. In recent decades, policymakers have increased the maximum amount that may be contributed to an account and delayed the age when minimum payouts must begin, along with other adjustments that generally benefit higher-income households.

Incentives worsen the racial wealth disparity

Existing incentives and retirement savings discrepancies aggravate the racial wealth disparity. Workers of color are disproportionately concentrated in positions and sectors with poor retirement plans. This, along with things like low intergenerational wealth transfers, makes it hard for families of color to save for retirement.

Two-thirds of Hispanic and half of black families lack a retirement plan in 2019. In comparison, one-quarter of white households and one-tenth of high-income families have no retirement savings account. White Americans have more retirement accounts and greater balances, thus they benefit disproportionately from current incentives. White households with IRAs and 401(k)s had average balances almost triple those of black and Hispanic families.

The Secure Act 2.0 has various costly downsides

Secure Act 2.0 would increase access to employment-linked retirement savings programs over time. Changes like mandating companies to automatically enroll workers in 401(k) plans and enabling employers to include student loan payments for matching contributions will certainly enhance participation, especially among low-takeup workers. Likewise, requiring companies to expand coverage for part-time workers would help many people get 401(k) plans.

However, these adjustments don’t solve the system’s fundamental faults, and other provisions would bias benefits toward the rich. It’s important noting that many workers don’t save since they need every dollar to survive. So, diverting earnings to limited savings accounts can diminish a family’s living standard and make it harder to take on costs that could eventually lead to better earnings or a higher standard of living before retirement.

Contact Information:
Email: [email protected]
Phone: 6023128944

Three Things You Can Do Right Now to Increase Your Social Security Checks

August 8, 2023 /by todd carmack

People are frequently warned not to rely too much on Social Security during retirement. The reason is that those benefits will only replace a fraction of your regular paycheck.

However, there’s a high probability you’ll rely on Social Security to some extent if your employment ends and you’re no longer receiving a paycheck from your employer. As a result, it’s critical to enroll in benefits at the appropriate time to guarantee that your paychecks are as generous as possible.

However, you don’t have to wait until you reach retirement age to make efforts to increase your Social Security income. Here are three things you may do right away that could result in more significant benefits later on.

1. Increase your earnings

Your earnings during your working years determine the amount of money you get from Social Security after retirement. If you can boost your income, you can position yourself for a greater monthly payout later in life.

How do you increase your income? You may, for example, concentrate on building competencies that will make you a more valued employee. That might easily result in a raise.

You might also try working a second job to increase your overall earnings. Even if you’re working as a freelancer, it counts for Social Security purposes as long as you declare it to the IRS (which you must do).

2. Advance your career

You may be reaching the end of your career and making more money than ever. If that’s the case, you have a great chance to increase your Social Security benefit.

If you prolong your career by a few years, you may use the Social Security formula to substitute a time of lower earnings with a period of greater earnings. Working a little longer at a higher salary may also allow you to add to your IRA or 401(k) plan, providing extra retirement income.

3. Review your annual earnings statements

Every year, Social Security releases a summary of all workers’ earnings and estimates their future benefits based on their income. Examining your annual earnings statement may result in a greater monthly benefit in the future.

Although earnings statements are frequently correct, this is not always the case. It’s conceivable that your income was underreported once or more.

If you examine your earnings statement each year and address any problems linked to underreported income, you may be able to get a larger benefit in the future. You may see your earnings statement at any time by visiting SSA.gov. In addition, if you’re 60 or older, you should get a copy of your earnings statement every year.

A greater benefit might be yours.

The more money you can get out of Social Security, the more comfortable your retirement. It pays to take these actions now to secure a greater monthly payout and have fewer financial problems later on.

Contact Information:
Email: [email protected]
Phone: 6232511574

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.

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.

The Installments vs. Annuity Dilemma When Using TSP for Regular Income

July 21, 2023 /by marvin dutton

The primary reason we contribute to our Thrift Savings Plan account is so that we can begin withdrawing from it at some point in the future. In addition, most of us view our TSP balance as a source of monthly income to augment our government annuity and Social Security (both of which are also paid monthly).

If we want to replace 80% of our pre-retirement income (as many financial advisers recommend), the great majority of us will fall short of that objective if we rely only on an annuity and Social Security. As a result, many retirees choose to receive TSP payments regularly.

In fact, over half of the separated employees choose a TSP withdrawal option that offers recurring income. Two income-generating withdrawal options are available: installment payments and a TSP life annuity. Installment payments can be made monthly (most common), quarterly, or annually. With installment payments, your money will stay in the TSP, where it’ll (hopefully) grow. A TSP life annuity involves withdrawing money from your TSP account and using it to buy a single premium immediate annuity (paid monthly) from MetLife; you can use all or part of your TSP balance to buy the annuity.

So, what’s the distinction between installment payments and a life annuity? Though both options allow us to collect recurring payments, the rules are significantly different. The most significant distinction is that a TSP Life Annuity is an irrevocable option, whereas installment payments can be altered frequently. Individuals who use installment payments can start and stop payments at any time and adjust the amount of the installments many times per year.

The TSP life annuity ensures that you won’t run out of money over your lifetime; you won’t have to look after your investments. But unfortunately, there’s no guarantee with installment payments, and you must watch after your withdrawals to verify that you continue receiving payments.

Both installment payments and life annuities allow you to receive payments based on a certain amount of money (level payments) or your life expectancy (increasing payments).

The Thrift Savings Plan has various calculators, including the TSP Payment and Annuity Calculator, with which we came up with the following examples. Due to the ongoing repercussions of the Thrift Plan’s new system, this calculator is no longer available on TSP’s website (as of July 2022). In our calculations (completed in April, before the new system’s implementation), we estimated that a 57-year-old retiree had $350,000 in their TSP when they started withdrawals upon retirement. We also assumed they would live to be 90 years old and that any money remaining in their TSP account would grow at a rate of 5% per year. The annuity interest rate index was 2.075% – the rate for TSP annuities in February 2022.

Level monthly payments of $1,750 would remain until death at 90, leaving a $4,244 balance in the TSP account.

Monthly benefits would begin at $1,045 and would have reached $2,247 at 90, according to the IRS life expectancy chart. As a result, $295,069 would stay in the TSP account.

A monthly annuity with a basic level payment would earn $1,394 and keep paying that amount throughout the individual’s life. At death, there would be no funds left.

A basic increasing payment annuity would have started at $998 and grown to $1,887 at 90. At death, there would be no money.

Which option is most popular among separated federal employees? Monthly payouts are significantly more common than life annuities. Separated employees appear to prefer the opportunities for continuous development and the freedom to adjust their payouts that monthly payments provide over the certainty of the Life Annuity.

According to recent research, there are 1.2 million fewer workers than before the pandemic. However, it also said that if the pre-pandemic worker growth rate had remained, there would be 3.5 million more employees in the workforce today.

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

Social Security spousal, ex-spouse and widow’s benefits

May 26, 2023 /by aaron steele

For the elderly, retirement income often consists of a ‘three-legged stool’ comprising defined contribution plans [401(k)], pensions, and Social Security benefits. With roughly 40% of men and women dependent on Social Security for more than 50% of their retirement income, the government program helps many senior Americans protect from poverty.

Spousal and widow’s benefits were introduced in 1939 to help retired households. Spousal benefits allow those with no or little job history to earn money depending on their partner’s work history. In 2015, same-sex married couples and non-marital legal couples were eligible for spousal benefits.

These perks are beneficial for women who spend more time at home caring for children or parents. The National Institute on Retirement Security reports that 60% of caregivers are women.

Another Social Science Research Network research revealed that women with one kid received 16% less in Social Security benefits than women without children. However, spouse benefits helped to close the gap.

The motherhood penalty is minor for women receiving spousal benefits. In contrast, moms getting only their own Social Security benefits face considerably decreased Social Security income.

Jim Blair, principal of Premier Social Security Consulting, explains how spousal, ex-spousal, and widow’s benefits work.

Spousal benefits

The Social Security Administration (SSA) determines a worker’s monthly payments using a formula based on their 35 greatest earning years. To be eligible for worker’s compensation, one must have worked for ten years. Long-term employees tend to earn more benefits than those who have had several years of no or low pay.

Spouses can begin collecting spousal benefits at age 62 if the primary worker is already getting them and the couple has been married for 12 months or longer. If the spouse waits until full retirement age, spousal benefits can be worth up to 50% of the original worker’s payout.

The monthly spousal payment is lowered if someone collects benefits before the full retirement age (FRA). Blair notes that if a spouse is still working, their benefits might be reduced by up to 30%. Their payments may be reduced by up to 35% if they start receiving before the FRA of 67. The reduction depends on your FRA.

The average spousal benefit in February 2022 was $838.88. Remember that Social Security and spousal benefits are supposed to complement your retirement income, so you must also save for your retirement.

Your employer-sponsored 401(k) may not be the only option. Traditional IRA investors don’t pay taxes on their investments until they retire. A Roth IRA, on the other hand, is an after-tax retirement plan that allows investors to pay taxes upfront but grow tax-free over time.

The Social Security Administration (SSA) has an online calculator that shows how much spousal benefits would be based on when they are claimed. The SSA will automatically identify which is bigger, i.e., your own or your spouse’s, and pay the higher sum whenever you apply for benefits.

To provide the principal worker options, spouses should assess whether they should start collecting their own benefits before obtaining spousal benefits. The primary worker immediately transfers benefits to the spouse who is already receiving them by choosing to receive benefits. As a result, you can continue getting benefits until your spouse is ready. You can only accept your own or your spouse’s benefits, not both.

No matter when the primary worker collects benefits, the spouse is entitled to up to 50% of the primary insurance sum. In other words, the value of spouse benefits remains the same whether the primary worker receives them early or waits until 70.

If you have a disabled child or a child under 16, you may be allowed to claim benefits before you turn 62, but only if the primary worker is already collecting.

Ex-spouse benefits

Ex-spouse benefits are worth up to 50% of the primary worker’s benefits. They can be reduced if taken before the full retirement age (FRA).

Blair explains that there are two forms of ex-spouse benefits. To qualify for the regular divorced spouse benefit, you must be 62 years old, unmarried (the primary worker’s present marital status is irrelevant), have been married to the primary worker for at least ten years, and the primary worker also has to be getting their benefits.

The divorced spouse can obtain additional benefits based on their work record without the primary worker. The qualifications remain the same: you must be 62 years old, single, and married for at least ten years. If your ex-spouse is 62 or older and you’ve been divorced for two years or more, it doesn’t matter if they’ve claimed for benefits or not; you can still claim based on their work record.

On their Social Security application, applicants can state whether or not they had a prior marriage lasting at least ten years. The Social Security Administration (SSA) then evaluates eligibility for ex-spouse benefits.

If you aren’t qualified for the independently entitled divorced spouse benefit and your spouse hasn’t begun receiving it, Blair advises contacting the Social Security Administration (SSA) to check if your ex-spouse has started collecting.

Widow’s (or surviving spouse’s) benefits

Widow (or surviving spouse) benefits are worth 100% of what the late worker was getting, beginning at age 60. If you remarry before 60, you lose your eligibility.

Individuals can only get their own benefits or those of their widow (or surviving spouse), but not both. Blair points out that persons can claim widow (or surviving spouse) benefits first, then move to their own if those are bigger. Delaying collecting monthly payments for one year beyond full retirement age (FRA) increases its worth by 8%.

So SSA lets you take a smaller benefit, in the beginning, to receive a more considerable benefit later, explains Blair.

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.

Disclosure:
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 filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.

Don’t Fall Into This Social Security Trap

May 21, 2023 /by marvin dutton

Social Security can be confusing, but understanding how the program works will help you maximize your monthly payouts. While you don’t have to know everything about the program, there’s one crucial factor that almost half of Americans overlook â€” and it might result in a lower-than-expected benefit.

What effect will your age have on your benefits?

The age at which you file for Social Security substantially impacts the amount you receive. To get the full amount based on your work record, you must wait until you reach your full retirement age (FRA), which is either 66, 67, or anywhere in between, depending on the year you were born. You can file for benefits as early as age 62, but you’ll get lower monthly amounts.

However, many Americans fall into the trap of not realizing that this benefit cut is permanent. According to a 2021 Nationwide Retirement Institute poll, over 45% of respondents wrongly assume that if they file early, their benefits will increase after they reach their FRA.

In reality, if you file for Social Security early, your lower payments are usually fixed for life. In other words, you’ll keep receiving reduced monthly payments even after you hit FRA.

So, should you claim early or wait?

As a result, making an informed decision about when to claim benefits is vital.

Claiming Social Security early may be the best option for some people, but remember that the benefit cut is permanent. If you file with the expectation that your payments will be increased later, it could jeopardize your retirement.

When it comes to when to claim, there’s no right or wrong answer. Generally, though, deferring Social Security may be the best option if your funds are running low and you want to earn as much money as possible each month. Waiting until 70 to file may result in hundreds of extra dollars every month, which can go a long way in retirement.

On the other hand, claiming Social Security earlier may be a wise choice if you have a solid nest egg and are ready to forego some monthly income for the opportunity to retire early. Similarly, if you have reason to suspect you won’t live a longer-than-average life, filing your claim early may allow you more time to make the most of your benefits.

Maximizing your Social Security payments

Before you decide when to file your claim, run the figures to determine how much you would gain or lose each month.

You may check your statements online by creating a mySocialSecurity account. That’ll provide you with an estimate of your benefit amount based on your actual earnings and the amount you’ll get if you claim at your FRA.

If you claim at 62, your benefit amount will be lowered by up to 30% if you have an FRA of 67. If you wait until 70, you may be able to get your full benefit amount plus up to 24% more each month (again, assuming your FRA is 67).

It’s easy to decide when to file after understanding how your age affects your benefit amount. And the more deliberate your decision, the better off you’ll be in retirement.

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

Social Security: Forecast For 2023 COLA

May 20, 2023 /by todd carmack

With 2023 rapidly approaching, Social Security beneficiaries will soon learn how much their monthly payments will increase next year based on the current quarter’s inflation rate. According to The Senior Citizens League, a non-partisan seniors advocacy group, the predicted Social Security cost-of-living adjustment (COLA) for 2023 is 8.7%.

Its forecast was modified on September 13, 2022, in response to the Labor Department’s Consumer Price Index for All Urban Consumers (CPI-U) report. According to the report, overall inflation jumped 8.3% in August compared to the previous year, as monthly rises in food, lodging, and medical care offset a sharp decline in energy and gas prices. The August increase followed an 8.5% increase in July.

The Social Security COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which differs somewhat from the CPI-U. The COLA is determined using the year’s average inflation rate in the third quarter. When those results are released, the data from July, August, and September will be combined and divided by three to calculate the average. The third quarter 2021 average will then be compared to the 2022 figure to establish the percentage change for 2023.

The group’s most recent COLA projection is significantly lower than earlier estimates this year, which projected a Social Security hike of up to 10.5% in 2023. Even an 8.7% growth would be the greatest in more than four decades.

“A COLA of 8.7% is highly exceptional, and it would be the highest ever earned by the vast majority of Social Security pensioners alive now,” said Mary Johnson, Senior Citizens League’s Social Security and Medicare policy expert. “It was higher only three other times since the introduction of automatic adjustments (1979-1981).”

The Senior Citizens League and other senior advocacy organizations have frequently challenged the formula used to calculate the Social Security COLA since it does not account for increases in the Medicare Part B premium, which is 14.5% more this year than in 2021. This frequently results in Social Security payouts for seniors falling short of the real inflation rate.

According to The Senior Citizens League, the Medicare Part B premium and other fees are typically disclosed in mid-November. It does not anticipate a significant increase in premiums in 2023.

Even if you exclude this year’s higher Medicare costs, the 2022 COLA of 5.9% is already considerably below the total inflation rate. According to the Senior Citizens League, the August COLA fell short by an average of 48%.

What Does 8.7% COLA Imply?

According to The Senior Citizens League, an 8.7% COLA increase next year means that the average Social Security beneficiary would receive $1,656 in monthly payments, an increase of $144.10 per month. Retirees can calculate their exact increase by multiplying their current check amounts by .087.

“COLAs are supposed to help sustain the purchasing power of Social Security income when prices rise,” according to the Senior Citizens League’s estimate. They are permanent increases that will gradually boost retirees’ total Social Security benefits throughout their retirement. Without a COLA that keeps up with inflation, Social Security benefits buy less and less over time, which can be difficult, especially as older Americans live longer lives in retirement.

Medicare Part B Premiums May Fall in 2023

While costs for nearly everything has risen in line with inflation this year, it is obvious that Medicare premiums will fall in 2023.

It is the duty of The Centers for Medicare & Medicaid Services (CMS) to announce the 2023 Medicare Part A and Part B premiums, deductibles, and coinsurance amounts, as well as the 2023 Medicare Part D income-related monthly adjustment amounts.

The Social Security Act establishes the monthly Medicare Part B premium, deductible, and coinsurance rates. The regular monthly cost for Medicare Part B users in 2023 will be $164.90, a $5.20 drop from $170.10 in 2022. In 2023, the yearly deductible for all Medicare Part B participants is $226, a $7 drop from the previous year’s $233.

Contact Information:
Email: [email protected]
Phone: 6232511574

Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then 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, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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 filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

When it makes sense to suspend Social Security benefits

May 14, 2023 /by aaron steele

Social Security does not typically grant a “do-over,” although, in some circumstances, retirees may request one. For individuals who can make it through without their monthly paycheck, for the time being, delaying Social Security could lead to a greater payout in the future. However, this strategy shouldn’t be confused with removing Social Security benefits, which function under different circumstances.

Here’s everything you need to know regarding suspending your Social Security benefits, plus when you should do so.

What does it mean to suspend social security?

You can postpone your retirement benefits if you’ve achieved the full retirement age (FRA) and are younger than 70. The critical phrase is “if you’ve reached full retirement age.”

You can submit your request in writing or verbally and suspend your benefits for the next month. If you suspend your benefits, they will automatically restart when you reach age 70, but you can reinstate them anytime.

Social Security Withdrawal Do-over

If you’ve decided to receive Social Security payments, you can request a withdrawal at any age. You may terminate your benefits, formally known as your primary insurance amount (PIA), up to one year after becoming eligible.

The Social Security Administration will then regard you as if you never enrolled. Your PIA then continues to increase until you opt to begin receiving benefits once more.

This “do-over” permits you to accumulate a larger payout in the future, following Social Security’s standard benefit modifications. A withdrawal mandates you to reimburse any money earned, including benefits to a spouse or kid and money withheld for Medicare.

If you choose to remove your benefits, you must submit Form SSA-521 and explain why.

If you intend to file a withdrawal, you must do so within the 12-month time restriction. Otherwise, you may be unable to defer your Social Security benefits until you reach full retirement age.

When is it reasonable to terminate Social Security benefits?

There are numerous factors to consider before reapplying for Social Security benefits. However, some of the most significant factors include evolving demands for your longevity, a new financial condition (perhaps due to a change in employment), and a planning strategy with your spouse to maximize your benefits. All of these factors, however, center around maximizing the after-tax advantage of the program.

• Longer life: If you expect to live longer than anticipated, it may be prudent to defer your payments and try to accrue as much benefit as possible. You can conduct a break-even evaluation to determine what is most rational. However, if you are married, you should consider when your spouse will begin receiving benefits and how this would affect your total payout.

• Taxes: Especially if you pay your taxes early or are working while collecting Social Security, onerous tax regulations might consume a significant portion of your income.

• Misunderstanding: Individuals who begin collecting at a younger age may not realize that they are locking in a lower monthly benefit amount than what they are eligible for if they wait until they become older.

• Medicare expenses: Medicare premiums are often deducted from retirees’ benefits, so you will be responsible for any payments if you suspend or withdraw your benefit. You will be separately charged if you desire to continue Medicare Part B supplemental insurance coverage until your benefits are reinstated.

• Nobody on your record: It may make sense if no one else is seeking benefits on your record. Remember that if you suspend your retirement benefit, anyone who gets benefits on your records, except your divorced spouse, will not be allowed to collect benefits while your benefits are stopped. Any advantages you obtain on someone else’s record will be suspended.

• Capable of affording it: If you are waiting for a greater benefit, you must be able to meet your expenditures until your benefit begins again. And if you withdraw benefits, you’ll need to be able to cover both your living expenses and the payback of any money you’ve previously received, which is a tough order.

• Other conditions: Depending on the circumstances, a suspension or withdrawal of benefits may be appropriate when collecting survivor benefits for a widower or widow and their dependents and collecting on a spouse’s benefit as opposed to your own in the case of divorce or remarriage.

If you delay your payout, you can still benefit from the growth in your full retirement benefits and any cost-of-living adjustments (COLA) resulting from inflation.

Next year’s benefits are expected to increase by approximately 9% due to the rising cost of living. You will earn an 8% deferred retirement credit if you delay your benefits.

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.

Creating a Tax Strategy for a New Retiree

May 14, 2023 /by joe carreno

Retirement is the most significant objective that clients discuss with advisers during their professional relationship. One critical component is how taxes are paid. Creating a strategy simplifies this remarkable change for your clients.

Financial advisors, unlike tax advisors, don’t have to go too deeply into the waters of tax planning. Instead, they can adopt a high-level approach, providing value to the clients’ financial lives and directing them on the right path.

Let’s look at one hypothetical example. Assume our customer is a single woman who works as a program manager for a Fortune 500 company and earns $300,000 per year with no additional sources of income. We will discuss federal taxes because state taxes vary significantly across the country.

That’s a significant change.

The move from a job to retirement income will be the most significant change in a client’s financial life. For most of her working life, she had been accustomed to getting reliable biweekly payments from her job. Regardless of the strategy employed to replace it, that’ll be a significant adjustment.

Tax withholding was practically an afterthought in those bi-weekly payments. Each check had federal taxes deducted, and this was basically never discussed at semi-annual meetings.

During a mid-year assessment, the client announced that she would be retiring in three months. It’s now time to begin developing a tax plan that suits her requirements.

New income tax bracket

A new tax bracket has to be estimated because she’s no longer earning a steady $300,000 per year. That’s a two-step process. First, we need to determine how much total income she’ll receive, including pension income and Social Security retirement payments (this income might have different tax treatment). Then we compare that figure to her spending requirements. We’ll take the larger of the two figures.

The client’s annual income decreased from $300,000 to $100,000 due to her expenses. Based on the 2022 tax table, her federal tax bracket dropped from 35% to 24%. Her flexibility within that bracket enables her to earn an extra $70,050 in ordinary income before pushing up to the next bracket.

Now we can begin new discussions and devise new strategies. Depending on various factors, we can consider Roth conversions or further eligible withdrawals to mitigate the impact of large RMDs in the future.

Putting a strategy into action

After doing the legwork and making sure the client understands how their taxes will alter in retirement, we can determine how to pay taxes proactively.

The most straightforward answer is to describe the importance of distribution withholdings. We’ve discussed our client’s expected yearly income, and we have a good idea of their federal tax bracket. We may then make an educated choice on how the withholding should be structured. We may recommend withholding 15-20% on the federal level for customers with $100,000 in regular income in 2022.

It’s ultimately up to you how far you want to go with tax preparation. If the client has an ongoing relationship with their CPA, the tax expert will be delighted to have a discussion now that will make things simpler for them come tax season.

Financial advisors will be viewed as offering enormous value as long as we’re proactive in high-level tax planning and encourage engagement with a client’s CPA.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.

Minimize Your Medicare Costs and Social Security Taxes with Roth IRA Conversion

May 14, 2023 /by todd carmack

Suppose you are using a tax-deferred account like 401(k); you can have more money by converting your 401(k) funds to a Roth IRA before claiming your social security. Converting your tax-deferred money to Roth IRA funds helps you reduce taxes. Still, this process may be challenging when deciding the amount to convert.

Roth conversion occurs when you convert your pre-tax deferred accounts like the traditional IRA to an after-tax account that is tax-free. Your money will be taxed like your regular income once you convert it. This means you have decided to prepay taxes that will not be due for many years. Making a Roth conversion will also benefit your relatives and beneficiaries in the future.

Roth conversion is good if the expected marginal tax rate when you withdraw money from a tax-deferred savings plan is higher than the current tax rate. Suppose you retire and have not started collecting social security benefits. In that case, you have a higher chance to do a Roth conversion due to your lower tax bracket.

Roth conversion can also benefit employees with low-income or high-income earners with a temporary lower tax bracket. Roth conversion will be more advantageous if you have enough money to cover the taxes. This money should not be from a tax-deferred account.

It is necessary to estimate the future tax rate before making a Roth conversion because this will determine your social security taxes and Medicare premium costs.

When you convert your money to Roth IRA funds, you should estimate the amount to convert through a process known as conversion optimization. You can optimize your Roth conversion using mass-market programs such as TurboTax or other software.

You can have higher retirement savings when converting your tax-deferred money and delaying your social security claims. With this approach, you can stay within the lower tax bracket through your retirement period.

Contact Information:
Email: [email protected]
Phone: 6232511574

Four Social Security Tips to Get Even Larger Checks

May 9, 2023 /by marvin dutton

The average Social Security payment isn’t that large, but it will be a significant source of income in retirement. You can have a more secure retirement if you receive higher Social Security benefits. After all, the program includes cost-of-living adjustments to help prevent the loss of purchasing power due to inflation. Sadly, the average Social Security payout is only $1,661 per month, which is relatively small.

Thankfully there are strategies you may use to increase your perks and receive larger paychecks overall. Here are some Social Security tips that will help you achieve that.

1. Maximize your monthly paycheck by filing it later.

Many people are unaware of how your age at the time you apply for social security benefits influences the amount you get. But compared to practically any other choice, this one could be more significant.

A full retirement age (FRA) is given to each retiree. The FRA age ranges from age 66 to 67 for people born in 1956 or after. You can file for social security once you clock age 62, but it’s optional.

Your monthly benefit amount decreases each month you receive a check before your FRA. On the other hand, you can postpone your FRA, and your benefits will increase for every month you wait until age 70.

The effects of filing early or late are significant. Your monthly benefits may be as much as 30% less than your normal benefits would have been had you waited if you began collecting benefits at age 62 and your FRA is 67. However, if you file at 70, it could rise by as much as 24% compared to your current benefit.

So simply delaying your Social Security benefits for an additional year or more will result in substantially larger checks and a higher monthly income for the rest of your life.

2. Increasing your benefits by working longer and earning more money.

Not only are benefits based on your age when you apply, but also your wages. Your average inflation-adjusted earnings over the 35 years when your salary was highest will be used to determine your standard benefit when you reach full retirement age.

You must work for a minimum of 35 years to avoid adding years of $0 wages when determining your average earnings, reducing your Social Security benefits. However, if your wage has increased over the years, it may be advantageous to continue working.

Your benefits calculation will disregard one of your work years for every year you continue to work after 35 years. You can therefore replace some lower-earning years in the calculation used to determine your check amount by working longer at a job that pays more.

3. Working together with your spouse can help you maximize your benefits.

If you’re married, you might be shocked to learn how much your spouse’s cooperation might affect the amount of your Social Security payment.

You can use your spouse’s retirement benefits in place of your own. Up to 50% of your partner’s normal pension at full retirement age may be covered by spousal benefits. However, you can only get them if your spouse has already applied for retirement benefits.

As such, you must decide if the higher earner should start checks as soon as possible so that spousal benefits can also start.

However, there are several situations where it makes sense for the higher earner to put off filing so they can maximize their larger benefit. This would also result in additional survivor benefits since the last living spouse in your marriage gets to keep the higher of the two checks either partner was getting.

The higher earner could postpone if a lesser earner can claim some funds to support the family. This might be the wiser decision for some families.

4. You can keep more of your Social Security benefits if you choose the right retirement plan.

Finally, consider the type of retirement account you use to save money. Social Security benefits are taxed once countable income reaches a particular level. However, withdrawals from Roth accounts do not count when assessing whether benefits are taxed; only distributions from standard IRAs or 401(k)s do.

Consider investing in a Roth throughout your career if you want to be able to withdraw as much money as you like from your investment accounts without worrying about making Social Security taxable. As a result, you might receive higher Social Security payments since you won’t have to pay the IRS a portion of your benefits.

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

Tag: Social Security

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Social Security spousal, ex-spouse and widow’s benefits

No matter when the primary worker collects benefits, the spouse is entitled to up to 50% of the primary insurance sum. In other words, the value of spouse benefits remains the same whether the primary worker receives them early or waits until 70.

If you have a disabled child or a child under 16, you may be allowed to claim benefits before you turn 62, but only if the primary worker is already collecting.

Ex-spouse benefits

If you aren’t qualified for the independently entitled divorced spouse benefit and your spouse hasn’t begun receiving it, Blair advises contacting the Social Security Administration (SSA) to check if your ex-spouse has started collecting.

Widow’s (or surviving spouse’s) benefits

Don’t Fall Into This Social Security Trap

Social Security: Forecast For 2023 COLA

When it makes sense to suspend Social Security benefits

Creating a Tax Strategy for a New Retiree

Minimize Your Medicare Costs and Social Security Taxes with Roth IRA Conversion

Four Social Security Tips to Get Even Larger Checks

TSP & Retirement