Social Security Rules You Should Know

Are you finally able to collect Social Security this year? Welcome to reirement!

There’s lots to learn with every new step in life and this one will be no different. Social Security benefits can be taxed. Did you know that? They can – and even more depending on where you live. Some states require them to be included in state taxes. Sheesh!

The Motley Fool posted an article that will explain 2 rules you should know:

1. When your benefits become taxable

2. What happens if you work when receiving benefits.

Check out their article for all the details.

New Bill for “SECURE Act 2.0” Could Change Retirement System

A new effort is gaining support by some lawmakers in Washington. The House Ways and Means committee is unveiling a new bill that hopes to secure retirement for many with a new bipartisan bill.

Some of its notable features include automatic enrollment in company retirement plans if one is offered. It’s also rumored to raise the mandatory age for distributions again. This age would move (again) from 72 to 75.

Secure Act 2 hopes to also provide tax breaks if certain people start saving for retirement and would likely explore the possibility of a national retirement plan.

Read more about it here.

Go (Which Way), Young Man?

Horace Greeley has long been quoted as saying, “Go west young man…”. American pioneering spirit led adventurers and down-trodden alike to seek out a place that was best for their families or a place that gave them opportunities they desired.

Today, it looks like Go South, young man might be the trend.

According to Audrey Conklin of FoxBusiness.com, Florida is seeing record growth as nearly 1000 people move there each day during our current pandemic state.

Home sales are doubling while sales of single family homes and condos in northern states are lower than in years prior.

Why? It seems to be an issue of lower taxes and being able to get more for your money.

Read more about it at https://www.foxbusiness.com/.

Webinar – Thank You For Registering

THANK YOU FOR REGISTERING FOR OUR WEBINAR…

(It was a ONE CLICK registration… so you should shortly get an email from GoToWebinar with details in your email box)

Make sure you attend the WEBINAR to learn all about this new system!

DETAILS SHOULD BE EMAILED TO YOU DIRECTLY FROM GOTOWEBINAR!

Thanks and Happy Planning!

Regards,

-Tim

P.S.  No this is not my car… It’s a Ford GT350 from a car show outside a conference in Phoenix a few years back.

May Newsletter 2018

Hello Again!

It’s been quite a long time since our last newsletter!

We’ve still been thinking about you. Here’s a short newsletter so we can touch base again. This image is a little teaser for both your appetite and the newsletter.

I guess by now that you’ve seen our updated version of the software. Our current edition is 2018.1h.

To find out what version you’re using, please follow the directions below.

PC Users:

Go to the HELP dropdown in your software then select “About this software”.

If you aren’t using 2018.1h, you can select “Check for updates” to download the most recent version. Carefully select your version.

You can also download the update here.

Mac Users:

Go to the RETIREMENTVIEW dropdown at the top of your screen. then select “About this software”.

If you aren’t using 2018.1h, you can select “Check for updates” from the HELP dropdown to download the most recent version. Carefully select your version.

You can also download the update here.

 

We’d love to hear from you if you have any questions, concerns or feedback.

 

Torrid Tech Talk

Buy or Rent – Retirement Dilemma

Buying or Renting Your Home In Retirement

The kids are gone, the house is paid for. You are ready for retirement. The question is whether keeping the house is the best idea. It’s a real retirement dilemma.

According to USA Today, as many as 46 percent of seniors aged 65 or older are deciding to rent a home rather than buy a new house or keep their previous one. There are pros and cons to each option.

Buy

For someone who already owns their own home with no mortgage payments, keeping the house might seem an obvious choice. According to the Motley Fool, this house can be used as a source of income in retirement through a line of credit or a reverse mortgage. This could be important if there is a sudden need for extra money.

On the other hand, annual upkeep eats up as much as 1 to 4 percent of the value of the house each year. These expenses can add up quickly on an older home. Then there are property taxes and homeowner’s insurance. It is also entirely possible that a housing market crash could erode the value of the home right when it is needed the most.

Rent

On the flip side, selling a home near or during retirement when the market is right could add a lot of cash flow and savings to draw from in the event of an emergency. The idea being, cash can be invested and might be worth more over time than the house’s appreciation.

Kiplinger’s took a look at several scenarios involving home ownership, selling, and renting. They wanted to decide which option made the most financial sense. The study determined that in the short run renting was the better choice. It also found that buying a new home was more profitable after ten years or more. Finally, they noted that it could be possible to pay yearly rent with interest gained from investing profits from the sale of a home.

Remember too, when considering this retirement dilemma, that this time of life is also about freedom. Separate from the financial aspects, renting a home could allow retirees to move around to different parts of the country. Renting can make travel easier than worrying about having to sell or maintain a house from a distance.

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Never Use A Roth IRA As An Emergency Fund

Roth Withdrawal – Short Term Gain – Long Term Loss

Roth IRAs are unique retirement tools. They allow the owner of the account to withdraw their original deposits from the account at any time without penalty. Roth accounts are funded with after-tax money. Uncle Sam, therefore, doesn’t have to worry about getting a cut as money moves in and out of the IRA. This feature could lead some people to use their Roth IRA as a sort of emergency fund if they have no other savings to draw from.

According to The Simple Dollar, however, it is not a good idea to use the account in this way. Gains you’ve accumulated over time will be lost with a single withdrawal.  Since there are lifetime limits on contributions, the impact can be great. Say that a 25 year-old deposited the $5,000 yearly limit and wanted to see how much this would turn into when they retire in 40 years. At 7 percent interest compounded annually, there will be $74,872 when they turn 65. Taking that $5,000 back out when they are 30 to cover an emergency will result in only $21,489 over the same time frame. Taking money out early might sound good in the short term, but it will be disastrous for long-term financial security.

Read the full article here.

Real-World Retirement Planning

What I Should Have Said For Real-World Retirement Planning

The NY Times posted an article recently from Paul B. Brown. He’s a former advisor and author. When asked if he would change the advice he gave he said, ” No, I wouldn’t change any of the advice. I told people to start saving aggressively while they’re young and to diversify their holdings. — But I would have provided not only more empathy, but more real-world advice as well.”

The article goes on to detail 3 examples of things he would say now – in hindsight. He talks about the age of retirement, the reality of life and finances as well as those special expenses that come along. He actually even gives a percentage goal for how much you’ll need – which may surprise you.

You can read the full article here.

Credit Scores – How Much Can They Rise?

 

Raising Your Credit Scores

Credit scores:  It is so incredibly important for a person’s financial well-being. So why is there is a surprising amount of mystery surrounding the FICO method of evaluating credit scores? According to FICO itself, after examining its own data, they revealed some solid information.  This can help explain how much a person could expect their credit score to rise after a delinquency falls off of their report.
What did they find? After one delinquency was removed from an account holder there was a rise. Over a three month period, it seems that it typically resulted in a 14-point rise in their credit score. A removal of all outstanding delinquencies over the same period showed a 33-point increase. Although this might not seem like a dramatic increase, they also point out that the penalty for major negatives on an account decreases over time, so the recovery after it actually falls off can be modest.

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