If you earned a government pension from a job not subject to Social Security tax withholding ("noncovered employment") and are also eligible for Social Security benefits through a job where Social Security taxes were withheld, two provisions might reduce your benefits: the windfall elimination provision (WEP) and the government pension offset (GPO). The WEP affects how a worker's Social Security benefit is calculated. If you're subject to the WEP, your benefit is calculated using a modified … [Read more...]
What are some tips for creating a budget and sticking to it?
It's a common problem for many individuals — wondering exactly where your paycheck goes each month. After paying expenses, such as your mortgage, utilities, and credit card bills, you may find little left to put toward anything else. Creating a budget is the first key to successfully manage your finances. Knowing exactly how you are spending your money each month can set you on a more clear path to pursue your financial goals. If you become sidetracked when it comes to your finances, consider … [Read more...]
What are some strategies for paying off credit card debt?
Nowadays, it's easier than ever to get caught up in the cycle of credit card debt. In fact, it's become a growing problem for many Americans. According to the Federal Reserve, total U.S. credit card payments reached 111.1 billion in 2016, up 7.4% from 2015. 1 If you find that you are struggling to pay down a credit card debt balance, here are some strategies that can help eliminate your credit card debt altogether: Pay off cards with the highest interest rate first. If you have more than … [Read more...]
Four Points to Consider When Setting a Retirement Income Goal
No matter what your age or stage of life, targeting a goal for monthly retirement income can seem like a daunting task. Following are four considerations to help you get started. 1. When do you plan to retire? The first question to ponder is your anticipated retirement age. Many people base their target retirement date on when they're eligible for full Social Security benefits, and for today's workers, "full retirement age" ranges from 66 to 67. Other folks hope to retire early, while still … [Read more...]
Government Report Details Household Finances
Every three years, the Federal Reserve sponsors the Survey of Consumer Finances (SCF), which collects information on the financial state of U.S. households. The survey is one of the nation's primary sources of information on the financial condition of different types of households. Here are a few interesting observations gleaned from the most recent surveys conducted in 2013 and 2016, with the latter comparing changes during that timeframe. Income The typical household's median family income … [Read more...]
How does working affect Social Security retirement benefits?
If you're thinking about working as long as possible to increase your retirement savings, you may be wondering whether you can receive Social Security retirement benefits while you're still employed. The answer is yes. But depending on your age, earnings from work may affect the amount of your Social Security benefit. If you're younger than full retirement age and make more than the annual earnings limit ($17,040 in 2018), part of your benefits will be withheld, reducing the amount you … [Read more...]
College Saving: How Does a 529 Plan Compare to a Roth IRA?
529 plans were created 22 years ago, in 1996, to give people a tax-advantaged way to save for college. Roth IRAs were created a year later, in 1997, to give people a tax-advantaged way to save for retirement. But a funny thing happened along the way — some parents adapted the Roth IRA as a college savings tool. Tax benefits and use of funds Roth IRAs and 529 plans have a similar tax modus operandi. Both are funded with after-tax dollars, contributions accumulate tax deferred, and qualified … [Read more...]
Is a nursing home the only option for long-term care?
If you or a loved one needs long-term care, other choices besides nursing home care may be available. Here are some of the other options. Home care Most people would prefer to stay in their homes as long as possible. Depending on your needs, you may only need help with some common daily living activities such as laundry, shopping, cooking, and cleaning. First, talk to your family to see if they can help with your needs. There are probably home health-care agencies that can assist you with … [Read more...]
Why is it important to factor inflation into retirement planning?
Inflation is one of the key factors you will need to consider when planning for retirement. Not only will the cost of living rise while you're accumulating assets for retirement, but it will continue to rise during your retirement, which could last 25 years or longer. This, combined with the fact that you will not likely earn a paycheck during retirement, is the main reason your portfolio needs to maintain at least some growth potential for the duration of your retirement. Consider this: If … [Read more...]
Weathering the Storm: Are You Prepared?
Severe weather can test even the most seasoned homeowners. And while storm hazards such as power outages, downed trees, and flooding can result in costly damage to your home, they can also put your family's safety at risk. The key to making it through a storm safely is to be prepared. Protect your home Before a storm arrives, you'll want to take proactive steps to prevent damage to your home, such as: Cleaning your gutters and downspouts so that water can flow freely away from your home … [Read more...]
