Have you heard that there are over 560 ways to claim Social Security? Some experts peg it at 567 ways to take Social Security, to be specific. With so many options, how can you be sure that you have chosen the right Social Security claiming strategy for your situation?
To be clear, those are just numbers. Paul Simon knew 50 ways to leave your lover. Most sources cite somewhere between 567 ways, nine ways (for a single person), and 81 ways (for a couple).
However many ways there really are, and even the Social Security Administration doesn’t seem to offer a straightforward answer, the important thing is that you claim in the most productive way for you and your spouse if you are married.
Here are a few things to keep in mind as you explore different options for when and how you will collect Social Security. These factors can help you make the most of your benefits, whether claiming early or delaying past your age of full benefit eligibility to let your benefit grow more.
As a small business owner or an entrepreneur, you are used to taking the lead. But there is one frontier you may still need to master… the future of your retirement. That is a matter of doing what you can to ensure all your hard work leads to your ideal retirement lifestyle.
While a 401(k) plan is the dominant retirement bedrock for employed Americans, small business owners are in a different boat. You are your own employer.
So whether you have zero or 100 employees, you must make the choice to act toward building a strong financial future for yourself. Depending on the workplace benefits of your organization, you may also impact those aiding you in your entrepreneurial dream.
And Social Security benefits can help, but only to a point. A motivating factor for building up retirement savings is the fact that, as an entrepreneur, you bring home a certain level of income. Portfolio holdings, personal assets, and savings most likely will play into your needs as a high-income household, as Social Security can only go so far.
Not only that, chances are you make more than the income limit placed by Social Security. For 2024, the maximum amount of taxable earnings is $168,600, up from $160,200 in 2023.
And what is another focal point for small business owners? Over-relying on their business as their retirement safety net. But time and again, historical data has shown this to be true: It’s risky to put all of your eggs – namely, your retirement and financial comfort – into one basket. Read More
Surviving spouses have a lot to deal with when their significant other passes away. There is much emotional grief. Many financial and life issues arise, requiring their attention. All of this can be even more burdensome in times when economic uncertainty is strong.
For many people in retirement, this situation applies now. The cost of living is going up. Healthcare costs are often an ever-growing area of spending for many retirees, as their need for healthcare usually increases in later years. What’s more, surviving spouses are often left in a harder situation, as their expenses may not go down proportionately with their incomes.
Here we will look at some of the issues that surviving spouses can expect to face after their spouse is gone.
The news for the Social Security cost-of-living adjustment (COLA) for 2023 is out. There will be a significant COLA for recipients in 2023, and it will be the largest boost in four decades. This is good news for retirees and others receiving Social Security benefits, as it means that their benefits will increase next year to keep up with the rising cost of living.
The COLA for 2023 will be a historic 8.7%, according to the Social Security Administration. This will be the largest COLA since the 11.2% boost in benefits that took place in 1982. To put things in perspective, last year Social Security had a 5.9% increase in benefit payments.
Keep reading to learn more about how the COLA is calculated and what it means for you, especially in this period of inflation.
At some point or another, you may have wondered about what happens to your 401(k) when you leave your current job. When the time comes for you to either retire or start a new job, you will have to decide on what to do with your retirement plan.
You may have accumulated a sizable amount of money in this plan over the years. The 401(k) plan’s investments may be performing well overall.
But does this mean that you should just leave your money in your 401(k) plan with your old employer? What else can you do with it? Here we will examine the different alternatives that you can choose from when it comes to managing your retirement plan at an old employer.
Annuities provide tax-deferred growth and pay guaranteed income during retirement. If you own an annuity, then it’s good to know how to pay taxes on your withdrawals.
Of course, your annuity carrier will send you a statement at the end of the year showing how much you need to report as taxable income. Nevertheless, knowing what to expect can save you from an unpleasant surprise when you file your tax return. That is especially the case for non-qualified annuities, in which your funds aren’t subject to required minimum distributions. For that reason, tax hits on your non-qualified annuity withdrawals may be a little less familiar territory.
This article on annuities and taxes is a great starting point for understanding the fundamentals of how annuities are treated under different parts of tax law. In this article, we will focus on more on a breakdown of the tax rules for non-qualified annuity withdrawals.
There is one little-known rule that affects you if you own more than one non-qualified annuity, and that is called the “aggregation tax rule.” Let’s get more into that in a little bit.
Many of us consider retiring at 62 for many different reasons. Sometimes, it’s your health or maybe your spouse’s. You may have reached all your retirement savings goals and want to take advantage of the opportunity. You may just no longer enjoy working.
Whatever your reasons for considering retirement at 62, you should consider several different issues before taking any irrevocable steps. This guide will look at some of those issues and help you get to the point where you can retire at age 62 with a comfortable lifestyle. Remember, these are starting points, and it’s not a bad idea to consult with a financial professional before finalizing your plans.
In the end, the biggest problem you will face retiring at 62 is the gap between 62 and 65 when the most significant retirement benefits – like Medicare – kick in. Cover the gap and make sure you won’t run out of funds, and retirement can be fun!
Have you heard of Rule 72(t) at some point in your retirement planning? Sometimes you need early access to your retirement accounts; that is, you need to make withdrawals before you reach 59.5.
You can avoid the 10% early withdrawal penalty, even if you don’t meet one of the exceptions, by taking substantially equal period payments under IRS Rule 72(t). To avoid the penalty, you must:
Follow all the rules and use the funds for any purpose
Adhere to the strict IRS guidelines
Not adjust distributions for inflation or any other reason
Pay taxes on withdrawals from accounts funded with pre-tax dollars
In this article, we will go over more of how IRS Rule 72(t) works, in what situations it might be an option to consider, and what to think about if you are considering it.
Do you want to retire at age 55? Early retirement isn’t for everyone, but it can be a great fit for those wanting a change of pace. The reality is, the many financial products and services that are now available in the marketplace are allowing more people to do this.
In this article, we will go over steps to take when you are retiring at age 55. Let’s look at how much money you might need for retirement at 55, what some optimal retirement options are, what you should know about your accounts at 55, and much more. Read on for some practical tips on how to retire efficiently at 55 or in that time bracket.
Many people choose to continue working after retirement. For some, it’s to help with monthly income and budgeting. As for others, it’s partially to enjoy staying productive in their chosen fields.
However, earning income from work after you have retired and started receiving benefits can significantly impact your Social Security, tax liabilities, Medicare coverage, and other areas of financial concern.
Due to these critical implications, it’s wise to understand the basics of how extra income earned after retirement can affect your financial planning.
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