It occurred to me as I wrote the last blog that I maybe was putting the cart before the horse. File-and-Suspend strategy is pretty complex and most people don’t understand even the basics of Social Security. So, here are a few concepts that will help you speak that beautiful language that I call Social Securitese.…
I hate to say I told you so (okay, I actually LOVE saying I told you so), but as I postulated in an earlier blog, the Social Security file-and-suspend option is going away for new filers after May 2, 2016. The file-and-suspend option allows one spouse to file for his benefits at full retirement age…
One question I help people answer in retirement planning is when to take Social Security. A couple of reminders on the rules: You can take Social Security as early as age 62, but your amount will be lower than if you waited until your full Social Security age. For most people considering the question today,…
I have done a ton of retirement plan enrollment meetings in my career. One question that consistently comes up is “How much should I be putting into my work retirement account?” In order to not induce sticker shock, I lay out a three step plan. Step 1: 6% Minimum Contribution. When you are young and…
The attached article has some great stories about how there is not just one way to retire. While some people consider stopping work as a one-way train to crotchety old age, others keep active and busy with hobbies, grandkids, volunteer work, and even their memberships in the American Association for Nude Recreation. No lie, click…
I don’t like to feed into the media hysteria when it comes to stock market drops. As I say repeatedly to clients, friends, in this blog, and to my cat, stock market recessions are a normal part of the economy. They last on average 12-18 months, so the pain is temporary. Drops in the stock…
Below are three retirement savings loopholes that may be here today, gone tomorrow. Tomorrow of course being in 10 years when legislation manages to get passed in our gridlocked government. Don’t panic, but just be aware that just because something is in the tax code today, doesn’t mean that it will be allowed forever. Back-door…
Even financial planners have a rough time getting Social Security information. I recently tried to log in to my Social Security account and was told that an account couldn’t be created for my Social Security Number. “Please contact us for help!” So, I called the number, interacted for about 5 minutes with the robot on…
This last method of spending down different accounts is probably the most popular. Method #3 I’ll call the Pro-Rata System. Simply put, you take a proportionate percentage out of each type of account every year. For example, say you have 50% of assets in tax-deferred accounts, 25% in taxable accounts, and 25% in Roth accounts,…
Last week, we talked about spending down retirement money starting with already-taxed assets, then tax-deferred accounts, and ending with Roth IRAs. This week, we look at spend down Method #2: Tax-deferred (Traditional IRAs, 401(k)s) first, taxable (non-retirement) accounts second, Roth IRAs last. Pros: Spreads the taxes owed on tax-deferred accounts out over a longer period…
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