social security benefits Archives

Inflation In 2022 And The 2023 COLA

December 3, 2023 /by jeff boettcher

The yearly Cost-of-Living Adjustment (COLA) is calculated using a federal government index compiled by the Bureau of Labour Statistics (BLS). The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the index in question. Over the previous year, this metric has increased by 9.4%.

The COLA is calculated as follows:

• The Consumer Price Index (CPI-W) values are from the current year’s third quarter (Julyâ€“September).

• These figures are compared to the average CPI-W measurement from the prior year’s third quarter (2021).

• The average reading for this year’s (2022) third quarter is compared to the previous year’s third quarter (2021).

• The difference is what beneficiaries will get as an increase in 2023, rounded to the closest 0.1%.

How much inflation will rise, and how will the final COLA computation be calculated?

The answer to this question will be calculated and announced in mid-October.

As of last year, federal retirees earned a 5.9% COLA raise under the Civil Service Retirement System’s (CSRS) Social Security benefits and annuities in 2021. Moreover, an increase of 4.9% was implemented in January 2022 for Federal Employees Retirement System (FERS) annuities.

So far in 2022, the average CPI-W for the third quarter of 2021 has increased by 5.50%. The annual COLA is calculated by comparing the changes in the CPI-W from one year to the other. Average of the third-quarter July, August, and September are used.

According to the Senior Citizens League, inflation figures from last month predicted a 7.6% COLA in 2023.

Later this year, the Federal Reserve will begin to hike interest rates to contain inflation. It is still under probability how successful it will be. Inflation has continued to rise so far.

While no one knows what will happen with inflation, some federal retirees and Social Security recipients may receive an 8% COLA increase in January 2023.

Reported Rate Of Inflation vs. Inflation in Reality

For many years, price fluctuations in a fixed-weight basket of commodities were used to measure consumer inflation. In other words, it calculated the cost of living for an individual or a family to maintain a consistent standard of life.

However, rising inflation has political ramifications. Elections are sometimes won or lost based on inflation rates. However, throughout the 1980s and 1990s, a new theory of assessing inflation arose for whatever cause.

Inflation is calculated by comparing the cost of at-bone steak from one year to the next, using a fixed-weight basket of commodities. A new measurement was developed throughout time. In other words, comparing what a family spent on food from one year to the next may be similar, but only because the family shifted from steak to chicken. Despite eating less expensive meals, the consumer’s “level of satisfaction” may remain the same.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

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.

Is SSI And SSDI The Same Thing In Social Security?

November 27, 2023 /by jason anderson

The Social Security Administration (SSA) runs two programs that give benefits to those who are injured or blind: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). The SSI is more comprehensive than the SSDI and may be able to help seniors in need. While the programs appear to be fairly similar, they have different eligibility requirements.

SSDI assists persons who cannot work due to a disability and their dependents. To be eligible for SSDI, beneficiaries must meet the Social Security Act’s definition of disability.

SSA Disability

A person is classified as disabled by the Social Security Administration (SSA) if they cannot work owing to a severe medical condition that has lasted (or is likely to persist) for at least one year or is expected to result in death. The condition must also hinder individuals from returning to previous jobs or adjusting to new ones.

SSDI, like Social Security retirement payments, is an earned benefit, according to AARP. You become eligible by working and paying Social Security taxes into the system. Spouses and children of disabled workers may be eligible for additional payments. Disabled children may also qualify for SSDI benefits based on their parents’ records.

Past earnings determine payment amounts. According to AARP, the average monthly SSDI compensation is expected to reach $1,358 in 2022.

SSI Disability

SSI is a needs-based program created to distribute benefits to people who are disabled, blind, or 65 and older, as defined by the Social Security Administration (SSA). Recipients must have a meager income and assets that do not exceed a specific amount. Because SSI is not related to job history, you may be eligible even if you have never paid Social Security taxes.

According to AARP, the current maximum federal SSI payment for an individual is $841 per month and $1,261 per month for a couple receiving benefits jointly. Benefits may be reduced to those levels, and income exceeding those levels may disqualify you from the program. Individuals have a $2,000 resource limit, while couples have a $3,000 restriction.

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.

Federal Retiree COLA 2023; The Highest Since 1981

November 21, 2023 /by marvin dutton

COLA at 8.7% in 2023

The Bureau of Labor Statistics (BLS) inflation data are utilized annually to create an automated cost-of-living adjustment (COLA) for employees (BLS).

Inflation has been growing in 2022, one of the most pressing concerns for Americans today. If you are retired or planning to retire, keep an eye on monthly inflation statistics because they impact the annual COLA adjustment for federal retirees and Social Security income. The additional payments will be made available to recipients beginning in January.

The CPI-W index is used to calculate the magnitude of the increase automatically.

COLA 2023, All-Time High Since 1981.

According to the Bureau of Labor Statistics’ most recent 2022 inflation report, inflation was 0.4% higher in September based on the Consumer Price Index for All Urban Consumers (CPI-U). According to the BLS, the all-items index (a different index from the CPI-U) climbed 8.2% during the last year.

The Consumer Price Measure for Urban Wage Earners and Clerical Workers (CPI-W) is the BLS index that many FedSmith readers are interested in. This index has risen 8.5% in the last year.

The CPI-W is the most important index for retirees who receive a federal employee annuity payment. It is also the amount computed for the 2023 COLA for Social Security payments.

It is now at 291.854 on the index.

The average CPI for the third quarter of 2021 was 268.421. This is critical because the yearly COLA is calculated by comparing the year-over-year growth in the CPI-W using the average of the third-quarter months of July, August, and September. This equals an 8.7% rise over the third-quarter average last year.

The greatest COLA rise in the last three decades was 14.3% in 1980. The 2023 COLA increase will be the highest since 1981, when it was 11.2%.

In 1981, inflation was 10.3%, and the annual COLA was 11.2% higher than the current amounts.

Since Obama assumed office, inflation has been on the rise. If the methods used to calculate it haven’t evolved, the current trend could be far more severe than the one observed during Carter’s tenure. In general, modifications in inflation calculations have resulted in lower reported inflation. The updated method shifted the CPI’s idea from assessing the cost of living required to maintain a steady level of life. The revised computation technique considers the cost of living rather than price increases.

According to one source that records this data, the current inflation rate would be around 17% if the earlier calculating technique had been utilized.

Are You Dissatisfied with the Cola Increase?

In 2022, inflation has remained high. As a result, retirees may be surprised by downward revisions to their 2023 COLA expectations, as earlier estimates in 2022 were 11% or higher. The bad news does, however, have a bright side.

COLAs do not fully offset inflation. As a result, the purchasing power of a retired person’s income decreases with time. For example, since 2000, the purchasing power of Social Security income has plummeted by more than 40%.

Retirees benefit financially with lower inflation and lesser COLAs. Because COLAs do not entirely replace the purchasing power of retirement income, lower inflation and lower COLAs usually better retain a retiree’s purchasing power. While huge COLA payments in response to high inflation deliver more funds, each dollar buys less than it did previously. In light of this, seniors should view lowering COLA estimates as great news.

Why Does Your Retirement System Affect Your 2023 COLA?

Retired federal employees who retired via the FERS system will get 1% less than those who retired under the CSRS system in 2023. This is because they receive the full COLA for Social Security while not the full COLA for their pension or annuity.

Beginning in 1987, CSRS was phased away. Less than 100,000 active government employees are still employed under the CSRS system. The majority of federal retirees receive CSRS benefits.

Social Security is not a benefit of the retirement plan for CSRS employees. Some CSRS employees earn Social Security benefits based on jobs other than working for Uncle Sam. However, this is not a mandatory component of the CSRS scheme.

During their federal government careers, FERS personnel can also invest for their future retirement through the Thrift Savings Plan (TSP). The federal government contributes an additional matching amount to the TSP to offer a higher income stream during retirement.

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].

The Social Security Benefits Calculation Guide for 2022

November 14, 2023 /by todd carmack

Social Security benefits may be a significant component of your retirement strategy. The amount of Social Security payments you will receive is determined using a three-step method.

Step 1: Determine your average earning history

Step 2: Determine your primary insurance amount (PIA)

Step 3: Determine your actual Social Security benefit

Calculate your average earning history

The first stage is to evaluate your average lifetime income. It’s not as easy as just averaging your profits after summing up all your earnings. The calculation must take into account several constraining factors.

Only earnings that you paid Social Security taxes on will be counted against your lifetime earnings. The computation will not consider incomes that, for instance, were not subject to Social Security taxation throughout your lifetime.

The yearly cap for Social Security taxes is $147,000 in 2022 ($142,800 in 2021). Only $147,000 of your 2022 employment income, for instance, counts in the computation of your lifetime Social Security earnings. The sum over $147,000 is not subject to taxation or factored into the computation of lifetime earnings.

Calculate your primary insurance amount

You’ll include your average indexed monthly earnings (AIME) into a formula to get your main insurance amount, or PIA, after calculating your AIME. The foundation of this formula is a concept known as “bend points.”

The PIA is the value that your Social Security payment would be if you applied for benefits to start at precisely the time when you would be eligible for retirement (FRA). Your PIA is multiplied by a growing or decreasing factor at any other age, even a month before or a month beyond your full retirement age, to calculate your benefit amount.

We must first determine which bend points, based on your age, apply to you in order to compute your PIA. Bend points are chunks of your AIME, and your PIA is calculated by multiplying the sum of each bend point by a particular percentage.

Based on numbers that were first calculated in 1977, bend points are calculated for each year. The bend points in 1977 were $180 and $1,085. Over the years, these bend points have been adjusted annually; as a result, the bend points for 2022 are $1,024 and $6,172. The bend points for 2021 were $996 and $6,002. The year you turn 62 represents the beginning of your situation’s curve.

Calculate your actual Social Security benefit

We can determine your actual Social Security benefit using the PIA. The age you are when you start receiving Social Security payments in relation to your full retirement age, or FRA, is the additional element besides the PIA.

Your benefit will be the same as your PIA if you petition for Social Security payments to begin at your FRA. Your Social Security income will be deducted from your PIA for each month before your FRA. In contrast, your Social Security pension will be enhanced from your PIA for each month following your FRA, up to the age of 70.

The reductions for filing early are in relation to your FRA. The PIA is decreased by five-ninths of 1%, or 0.556%, for each of the 36 months leading up to your FRA. The decrease is 20% if benefits are started a full 36 months before FRA.

A further five-twelfths of 1%, or 0.417%, is subtracted from the PIA for each month that is more than 36 months before the FRA. Therefore, the extra reduction is 5% for every full year (12 months) that you submit less than 36 months before the FRA.

For each month that Social Security benefits are delayed beyond FRA, the delayed-filing increases (two-thirds of 1%) are computed. Your Social Security payment is determined by adding 8% to the PIA for each full year of delay.

Your FRA is defined by your birth year. Your FRA is 66 if you were born between 1946 and 1954. The FRA is extended by two months for each year following 1954. The FRA is 67 for those born in 1960 or after.

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.

Is It Ideal To Wait Until Age 70 To File For Social Security?

November 9, 2023 /by jason anderson

Preschoolers at Stanford’s Bing Nursery School had a choice more than 50 years ago. Either they could consume one marshmallow right once or wait twenty minutes and consume two marshmallows. The children were then monitored for many years. Those who waited performed better in many areas, including obtaining increased SAT scores and feeling more valuable.

The marshmallow test is applied differently to American people who are approaching retirement. At age 62, they can make an early benefit claim. They could wait until their full retirement age or hold off until they are 70. The benefits increase with waiting time.

It might seem obvious to put off doing something as long as possible. But is it essential to delay filing for Social Security payments until age 70? Here are the results of the statistics.

Opportunity Of Waiting

Let’s say you consistently received the optimum Social Security benefit amount throughout your employment and decided to file for benefits in January 2022 at 62. According to Social Security Administration, your monthly retirement pension would be $2,364.

Suppose you wait until you are 67 years old to file for benefits. Your new paycheck would be worth $3,568 per month. However, if you waited to apply for Social Security payments until you were 70, you would be paid a staggering $4,194 monthly.

This isn’t as good a deal as the 20-minute wait for double as many marshmallows for toddlers. However, delaying when applying for Social Security retirement benefits has financial benefits.

If you wait until age 67 instead of 62 to file for Social Security benefits, your monthly allowance will be about 51% higher. Your monthly payment would increase by more than 17.5% if you waited until age 70 instead of applying for benefits at 67.

Is it wise to wait until age 70 to file for Social Security benefits?

Your monthly check will indeed be greater if you wait. However, it’s crucial to consider your overall financial gain.

The cumulative benefits for receiving Social Security at ages 62, 67, and 70 were studied. The estimates were based on the highest Social Security payment levels.

The cumulative rewards for filing at age 67 will be greater at age 76 than those for filing at age 62. The total benefits for filing at age 72 will surpass those for filing at age 67 by the time you are 87.

Here are perhaps the most significant statistics.

In the United States, males live an average of 75 years. For women, it is 81. So, according to statistics, most Americans wouldn’t gain more from delaying Social Security benefits until age 70 since they won’t live long enough to make it profitable.

The value of money and time has also not been taken into consideration. Even if you didn’t require benefits from Social Security at age 67, you could still apply for them and use the money to buy Treasury bonds or another low-risk investment. Doing so would push out just how long it will take to vindicate the delay in receiving benefits even further.

According to Social Security Administration data, only 5% of men and 7% of women wait until they are 70. About half of Americans get Social Security benefits before reaching full retirement age, frequently due to financial necessity. Moreover, a quarter of males and just under a third of women begin collecting benefits when they become eligible for Social Security at age 62.

The Statistic Is Not You

Is it unquestionably true that you shouldn’t wait to apply for Social Security benefits in light of this analysis? No. You are not a number.

You might live a life that is significantly longer than typical. You may be able to collect substantially more overall benefits than you would have if you had done so earlier in life y delaying your Social Security claim.

Regardless of your choice, feel free to indulge in a few marshmallows. There isn’t a psychologist present.

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 FERS Annuity Is A Great Deal

November 9, 2023 /by marvin dutton

Whenever it comes to ensuring your financial security in retirement, the FERS annuities are a comparative steal.

What is a FERS annuity?

In 1986, Congress explicitly created the Federal Employees Retirement System (FERS) for federal civilian employees. Benefits are available under the FERS retirement plan from three main sources:

Basic Benefit Plans
Social Security
Thrift Savings Plan (TSP)

Two of the three benefits under FERS (TSP and Social Security) will go with you if you leave the federal government before retiring, according to the Thrift Savings Plan (TSP).

What’s the value of your FERS annuity?

The government and you must make mandatory contributions to the FERS defined benefit plan. You spend less money on this benefit than Uncle Sam does. Your service history (measured in months and years and high-3 yearly pay) determines your FERS annuity.

If you retire before age 62 and have completed at least 20 years of service, you will earn an annual annuity based on 1%. If you retire after the age of 62 with at least 20 years of service, you will earn an annuity based on 1.1% per year. The 1% component is used for individuals who are 62 years or older but also have fewer than 20 years of service. Employees in particular categories (such as firefighters, police officers, air traffic controllers, etc.) would be paid a larger proportion.

How much money would you have needed to accumulate on your own to obtain a payout similar to what you will receive from your FERS annuity?

A lot of it! Consider the scenario where you have 30 years of total federal employment and retire before age 62. Your top three salaries are $100,000 annually. Once you turn 62, your FERS pension will be $30,000 per year with a cost-of-living adjustment. The COLA begins to apply when a special category employee retires.

What amount would you have to save to earn a $30,000 annual inflation-indexed income?

The consensus is that the answer is $750,000. This is based on the so-called 4% rule, which states that if you start taking withdrawals from a lump sum at 4% and adjust them for inflation each year, there is minimal risk of running out of money. The 50 years between 1926 and 1976, encompassing the Great Depression, were used to create this rule. Then, it was compared to withdrawal rates that would protect capital.

Bill Bengen, the financial planner who conducted the analysis, concluded that there wasn’t any possibility that a person who adhered to the 4% rule would’ve run out of cash in fewer than 33 years, even under exceptionally unfavorable market conditions. In reality, Bengen asserted that a 5% rate could be more practical, reducing the sum that must be amassed for the individual in our case to around $625,000.

According to a recent MetLife analysis, the average retirement fund amount is anticipated to be $450,000. However, for the individual in this scenario, that amount would not be sufficient to match the value of the FERS annuity.

Would you have been capable of replacing 30% of their pre-retirement salary with savings?

Whenever it comes to ensuring your financial security in retirement, your FERS annuities are a relative steal.

How your FERS annuity is computed

The first step is to find your current “high-3” – the highest average basic wage you have received during three consecutive years of employment. A federal employee’s high-3 pay is typically the sum of the three most recent years of compensation.

Divide your full creditable years of service by your high-3 average yearly salary, then multiply that result by 1%.

If your high-3 average is $85,000 and you’ve worked for the government for 30 years, then you qualify. Your FERS annuity would then be $2,125 per month or $25,00 per year. Your annuity will now receive a bonus if you retire after age 62 and have at least 20 years of service. You will multiply your service years and high-3 by 1.1% instead of 1%. As a result, instead of receiving $25,500 per year, as in our previous example, you would now earn $28,050 ($2,337 monthly instead of $2,125).

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

Here’s How to Get an Extra 24% Out of Social Security

October 27, 2023 /by marvin dutton

Don’t accept less when you might boost your benefit checks and create a more financially secure future.

The Social Security system is not designed to replace private savings, pension plans, and insurance protection. The individual’s own effort, planning, and prudence will provide him with a higher quality of life upon retirement. The system emphasizes thrift and self-reliance while preventing destitution in our national life.

Contrary to popular belief, Social Security is not a giveaway. It’s a system that working individuals contribute to throughout their careers in exchange for some needed assistance later in life.

Social Security, which provides, on average, approximately 40% of your pre-retirement income, is likewise unlikely to support you. Nevertheless, it’s worthwhile attempting to maximize your benefits, and there are specific methods to do so, so here’s how you may gain an extra 24 percent (or more!) from the program.

The fundamentals of Social Security

Several strategies can boost your Social Security payments, and we’ll focus on one of the most effective here. To set the scenario, everyone has a full retirement age when we can begin receiving the full benefits to which we’re entitled based on our earnings history. For the majority, the full retirement age is 66, 67, or somewhere between those ages.

However, we can begin receiving benefits as early as 62 and as late as 70 â€“ and when we start has a significant influence on the amount of our checks.

How to get an additional 24%â€“ or more

Each year that you postpone starting to receive your benefits after reaching full retirement age, up to 70, your checks will rise by roughly 8%. Delaying from 67 to 70 will increase your benefits by around 24%, enough to transform a $2,000 payment into a $2,480 check and increase yearly benefits from $24,000 to over $30,000. Meanwhile, starting to collect your checks early will diminish them.

Start Collecting at:	Full retirement age of 66	Full retirement age of 67
62	75%	70%
63	80%	75%
64	86.7%	80%
65	93.3%	86.7%
66	100%	93.3%
67	108%	100%
68	116%	108%
69	124%	116%
70	132%	124%

The table shows how some people may be able to increase their benefits by 24% or even 32%.

Think it through

Delaying may appear to be a no-brainer option, but think about the big picture:

If you start collecting later, you’ll get fewer checks overall. But conversely, those who begin early will receive many more checks.

When you start may not matter much for people who have average-length lives, except for your spouse, since the two of you could optimize benefits through a coordinated Social Security plan.

Many individuals just can’t wait until they’re 70 because they need the money now, whether due to a job loss, a health setback, needing to care for a loved one or a lack of savings. Those in bad health may benefit from starting sooner as well.

Delaying your full retirement, if possible, might pay off in ways other than increasing your Social Security payment. You’d be able to save and invest for retirement for a few more years, for example, and your nest egg will have more time to develop. But, of course, it will also have to support you for fewer years.

Delaying Social Security can be accomplished by withdrawing more from other retirement funds, such as IRAs or 401(k)s until the Social Security income stream begins.

Everyone’s situation and decision-making process will be at least slightly different. Therefore, spend some time learning more about Social Security so you can make informed decisions and get the most out of the program.

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

Ages at which Social Security and Medicare will deplete their reserves have been postponed

October 10, 2023 /by michael crowe

According to the latest projections from the yearly basis Medicare and Social Security administrators’ report released on June 16, the Social Security program will no longer be able to provide full benefits at the start of the year 2035, a year later than the previous projection. The current forecasts estimate that Medicare’s inpatient hospital treatment trust fund would be depleted in 2028, instead of 2026.

The good news for the predicted actuarial status of the trust funds is that the 2020 downturn’s economic recovery has been greater and quicker than expected in the previous year’s reports.

President Joe Biden stated in a speech that the study predicts that the successful economic growth fueled by vaccination and economic programs has reinforced programs that a huge number of Americans depend on and has placed our country in a stronger budgetary condition.

The paper’s authors say that the ongoing COVID-19 epidemic will not significantly affect the accuracy of their long-range projections. They did, however, point out that the report’s assumptions were created back in February before cases started rising again nationally and inflation spiked even higher.

More than 65 million people in the United States are eligible to receive benefits from Social Security, including retirees, those with disabilities, and the relatives of workers who have passed away. There are approximately 64 million people in the US who are eligible for receiving Medicare benefits.

The hospital insurance fund of Medicare is likely to receive more money than anticipated for the current budget year. Payroll taxes are one major source of funding. About 183,000,000 persons will have made such tax payments in 2021.

The analysis estimates that the monthly fee for Medicare Part B (outpatient coverage) will remain the same indefinitely at $170.10. However, administration officials have stated that the estimate, based on data from earlier this year, disregards a predicted drop caused by an incorrect estimate of the price of administering Alzheimer’s treatment Aduhelm.

Both programs are managed by trustees consisting of the Social Security commissioners and the ministers of Finance, Public Health, and Labor. There should also be two public trustees; however, seats have been empty since 2015.

The White House did not respond to an email asking if the president planned to appoint new public trustees. While trying to deal with historically high inflation, pandemic recovery, and the war in Ukraine, the United States government’s financial woes are further highlighted by the trustees’ report.

AARP CEO Jo Ann Jenkins said in response to the news that the money people earned and the account they contributed to is essential, despite the temporary rise, immediate and long-term protection of the benefits. “For their financial and health security, a considerable number of Americans depend on Medicare and Social Security, and the risks are too high,” Jenkins said. This year, the cost-of-living adjustment for the recipients of Social Security was the largest in 39 years, increasing recipients’ payouts by 5.9%.

Committee for a Balanced Federal Budget president, Maya MacGuineas, said in a statement that the benefits may be increased by 8% in 2019 due to this year’s strong inflation. According to a Treasury Department official, “Legislators have to take their heads out of the sand and stop expecting these vital programs’ budgetary issues will solve themselves.”

According to a recent analysis by the Congressional Budget Office, growing interest expenses and spending for Medicare and Social Security are the primary causes of debt growth relative to GDP. They are the result of an aging population.

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!

Retirement COLA? Here’s What To Do

October 9, 2023 /by marvin dutton

Millions of current and retired federal employees pay attention to the magnitude of the federal pay boost and the retiree inflation catchup every year. As a result, they are even more vital to the communities where they reside, vote, shop, and raise children.

Therefore, in his State of the Union address, President Joe Biden made a particular point of announcing that federal employees who are now working remotely will return to their offices “soon,” as in “soon.”

Both current employees and those who have already retired may be concerned about the importance of increases and COLAs, but they may be unaware of the specific amounts.

Especially when the sums are so vastly different, the system dictates that the methods used to arrive at such figures are primarily of scholarly interest to the two parties. You’ll receive what you’re looking for. Period!

Cost of Living Adjustment

The Bureau of Labor Statistics provides a cost of living adjustment for retirees. The inflation rate does not play a role in any base raise for active duty federal employees.

As a result, federal employees in high-paying cities like New York, Houston, and Los Angeles earn more than their counterparts in lower-paying states like Kentucky and Idaho. COLAs are frequently granted to retirees even while government salary increases are capped, as in 2011, 2012, and 2013.

Pay for government employees increased by 2.7 percent in 2013. Old-system civil service retirees received a 5.9 percent cost of living increase, while new-system federal employee retirees received a 4.9 percent adjustment.

In January 2023, then Vice President Biden proposed a 4.6 percent increase for federal employees. The September cost of living statistics must be reviewed to establish the retiree COLA. However, considering how quickly things have evolved, the COLA for 2023 might be a monster.

Raises vs. Cost-of-Living Adjustments

For most people, the debate over a pay increase versus a cost-of-living adjustment is purely academic. There is disappointment among those who receive the lowest percentage raise. And so it goes. However, “regular times” is the most important word. These, on the other hand, are not.

We’re in the thick of a European land war. Refugees, mainly women and children, have fled to six nations, including the United States, Germany, and Canada. Nearly 11 miles from Poland, the Ukraine conflict has shifted its focus to the east.

One assault on a member of NATO (the United States included) is an attack on all NATO members. Many people in the United States think that the recent election was rigged. Many people are eager to see how the elimination of controversial mask mandates will affect the economy.

Ex-President Barack Obama tested positive for COVID earlier this week. Who knows what effect the first large-scale gatherings in recent years â€” from Mardi Gras in Louisiana to the Florida beaches â€” will have when people return to their hometowns and colleges?

Increase in the Cost of Fuel

The fuel price looks to be rapidly rising from $4 a gallon to $5 a gallon. Unless, of course, you reside in California, where time moves at a breakneck pace. It’s a little bit! What’s next? It’s hard to say when this “return to the office” trend will run out of gas.

Supply chain issues might become worse before they get better at present. The “economy,” as most people refer to it, is affected by various factors, including new trade restrictions. Your biweekly income and monthly annuity are also real.

Will the massive wave of retirements be triggered if the gap between a COLA and a salary increase widens? It has been foretold for over a decade, yet nothing has happened â€” for the time being. More than a hundred thousand active-duty federal employees are now eligible to retire.

They need to determine whether they can afford to retire and rely solely on diet COLAs in an inflationary environment. To achieve this, they’ll need to see how their Thrift Savings Plan account is doing and whether they need to make any changes to its allocation in light of the current economic climate.

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

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

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 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

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.

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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

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

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