Retirement Solutions, Simple and Reliable
If you have a balance on a credit card or an adjustable rate mortgage, you might be noticing changes in your payments. Higher interest rates are starting to ripple through the personal finance landscape, and it doesn’t look like that trend will change anytime soon.
Read more about Inflation Creeping into Personal Finances …
Healthcare can be one of the priciest yet essential parts of life’s journey. And yet, many struggle to utilize the financial tools that may help. Take Health Saving Accounts (HSAs), for example.
In 2019, 55% of those with HSAs that did not record a distribution also did not receive either employee or employer contributions. This suggests that the lack of distributions are due to account holders becoming disengaged from their accounts, rather than not having access to this cost-saving financial tool.1
Read more about The Underutilized Benefits of a Health Savings Account …
Much is out there about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Aside from these blunders, some classic financial missteps plague retirees.
Calling them “mistakes” may be a bit harsh, as not all of them represent errors in judgment. Yet whether they result from ignorance or fate, we need to be aware of them as we prepare for and enter retirement.
Timing Social Security. As Social Security benefits rise about 8% for every year you delay receiving them, waiting a few years to apply for benefits can position you for higher retirement income. Filing for your monthly benefits before you reach Social Security’s Full Retirement Age (FRA) can mean comparatively smaller monthly payments.1
Managing medical bills. Medicare will not pay for everything. Unless there’s a change in how the program works, you may have a number of out-of-pocket costs, including dental, and vision.
Underestimating longevity. Actuaries at the Social Security Administration project that around a third of today’s 65-year-olds will live to age 90, with about one in seven living 95 years or longer. The prospect of a 20- or 30-year retirement is not unreasonable, yet there is still a lingering cultural assumption that our retirements might duplicate the relatively brief ones of our parents.2
Withdrawing strategies. You may have heard of the “4% rule,” a guideline stating that you should take out only about 4% of your retirement savings annually. Some retirees try to abide by it.
So, why do others withdraw 7% or 8% a year? In the first phase of retirement, people tend to live it up; more free time naturally promotes new ventures and adventures and an inclination to live a bit more lavishly.
Talking About Taxes. It can be a good idea to have both taxable and tax-advantaged accounts in retirement. Assuming your retirement will be long, you may want to assign this or that investment to its “preferred domain.” What does that mean? It means the taxable or tax-advantaged account that may be most appropriate for it as you pursue a better after-tax return for the whole portfolio.
Retiring with debts. Some find it harder to preserve (or accumulate) wealth when you are handing portions of it to creditors.
Putting college costs before retirement costs. There is no “financial aid” program for retirement. There are no “retirement loans.” Your children have their whole financial lives ahead of them.
Retiring with no investment strategy. Expect that retirement will have a few surprises; the absence of a strategy can leave people without guidance when those surprises happen.
These are some of the classic retirement mistakes. Why not attempt to avoid them? Take a little time to review and refine your retirement strategy in the company of the financial professional you know and trust.
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The federal government has upgraded its Child Tax Credit. Thanks to the American Rescue Plan Act, there are four notable differences in effect for the 2021 tax year only.1
First, the Internal Revenue Service is paying many families who qualify for the CTC 50% of their credit before 2021 ends. Second, the credit has grown larger for most eligible families: $3,000 per child, $3,600 per child under age 6. Third, this year’s CTC is fully refundable. Fourth, the credit has been extended to 17-year-olds for the first time – that is, children who turn 17 in 2021.1,2
Remember, this article is for informational purposes only. It’s not a replacement for real-life advice, so make sure to consult your tax or legal professionals if you have any questions about the CTC or how it operates.
Read more about The Expanded Child Tax Credit …
In this 3-part guide, we will explore where your tax dollars go, some of the ways tax filing may look different in 2022, and what you can do to prepare. Keep in mind, this guide is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your strategy.
The agency provides tools and resources to help you calculate the correct amount to have withdrawn
from your paycheck.
The calculator may help you determine if your employer is withholding adequate amounts from
your paycheck.
The calculator asks for your projected gross income, your current withholding number, the current amount of federal taxes withheld, and other paycheck-related questions.
The calculator leads you through various screens that require you to enter the requested numbers into boxes. The calculator looks similar to a tax-filing form.
The final figure: Once the calculator generates the estimated taxes you can expect to owe or be refunded, it offers suggestions on how to change your withholding amount or request that additional money be withheld from your check.
If the calculator shows you are projected to owe taxes at the end of the year, you may file a new Form W-4, Employee’s Withholding Allowance Certificate, following the guidance provided by the calculator. The IRS-provided calculator is designed to provide feedback based on certain assumptions. It is not intended to provide specific tax, legal, or accounting advice. The calculator is not a replacement for real-life advice,
so please make sure to consult a professional before modifying your tax strategy.5
Suggestions may include changing the number of allowances you are claiming or requesting that your employer withhold additional money.
Taxpayers who receive pension income may use Form W-4P.Once completed, send the form to your payer if you are making changes.6
Read more about Annual Tax Guide – A Guide to 2022 Tax Law Changes (Part 2) …
In this 3-part guide, we will explore where your tax dollars go, some of the ways tax filing may look different in 2022, and what you can do to prepare. Keep in mind, this guide is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your strategy.
Before we dive into the upcoming tax brackets and what you can do to prepare for 2022, it can be helpful to understand precisely where the government allocates your federal tax dollars.
In 2021, the federal government spent $6.82 trillion, which equals 30% of the nation’s gross domestic product. Further examination reveals that three significant areas of spending make up the majority of the budget.1
Read more about Annual Tax Guide – A Guide to 2022 Tax Law Changes (Part 1) …
The Federal Reserve met in mid-January, and clarified its position on monetary policy, providing the clearest hint yet about short-term interest rates. The fed hinted that the first interest rate hit could come as soon as March.1 The markets were on edge anticipating the Fed update. But by the end of the meeting, the market […]
Some retirees succeed at realizing the life they want; others don’t. Fate aside, it isn’t merely a matter of investment decisions that makes the difference. There are certain dos and don’ts – some less apparent than others – that tend to encourage retirement happiness and comfort.
Retire financially literate. Some retirees don’t know how much they don’t know. They end their careers with inadequate financial knowledge, and yet, feel they can prepare for retirement on their own. They mistake creating a retirement income strategy with the whole of preparing for retirement, and gloss over longevity risk, risks to their estate, and potential health care expenses. The more you know, the more your retirement readiness improves.
Read more about Wise Decisions with Retirement in Mind …
Congratulations to Damian Sylvia for being named an Honoree, Light of Hope Award. View video and commentary from Catholic Charities Trenton below. On behalf of Catholic Charities Trenton:“We are pleased to present Damian Sylvia with the Light of Hope Award. He has been a devout supporter of Catholic Charities and is a longtime member of […]
When you marry or simply share a household with someone, your financial life changes—and your approach to managing your money may change as well. The good news is that it is usually not so difficult.
At some point, you will have to ask yourselves some money questions—questions that pertain not only to your shared finances but also to your individual finances. Waiting too long to ask (or answer) those questions might carry a price. In the 2019 TD Bank Love & Money survey of consumers who said they were in relationships, 40% of younger couples described having weekly arguments about their finances.1
Read more about Managing Money as a Couple …