Social Security is complex, and the details are often misunderstood even by those who are already receiving benefits. It's important to understand some of the basic rules and options and how they might affect your financial future. Full retirement age (FRA) Once you reach full retirement age, you can claim your full Social Security retirement benefit, also called your primary insurance amount or PIA. FRA ranges from 66 to 67, depending on your birth year (see chart). Claiming … [Read more...]
Do You Need to Adjust Your Tax Withholding?
Once you've filed last year's tax return and can see where your finances are headed this year, it may be a good time to adjust your income tax withholding to help make sure you're having the right amount withheld from your paycheck. Tax withholding is a balancing act. If you have too much tax withheld, you will receive a refund when you file your income tax return. If you prefer to receive more in your paycheck instead, you will need to reduce your withholding. However, if you have too … [Read more...]
When Do People Start Collecting Social Security?
There's no "right" age to begin receiving Social Security retirement benefits. It's a personal decision based on multiple factors, including how long someone wants to work and how much retirement income is needed. Workers are entitled to full benefits at their full retirement age (FRA) — 66 to 67, depending on year of birth. Claiming before FRA (as early as age 62) will result in a permanently reduced benefit, while claiming later will result in a permanently increased benefit due to delayed … [Read more...]
Market Measures: Beyond the Dow
When you hear or read that the market is up or down, what does that really mean? More often than not, it reflects movement in the two best-known stock market indexes, the Dow Jones Industrial Average and the S&P 500. In fact, there are hundreds of indexes that track various categories of investments. While you cannot invest directly in an index, you can buy funds that track specific indexes, and you can look at indexes as a benchmark for certain portions of your portfolio. For example, … [Read more...]
New SAVE Repayment Plan Offers Key Benefits
In July 2023, the Department of Education launched a new income-driven repayment (IDR) plan for federal student loans called the Saving on a Valuable Education (SAVE) Plan. The SAVE Plan is the most generous IDR plan to date, and like all IDR plans, it calculates a borrower's monthly payment amount based on income and family size. The SAVE Plan replaces the existing Revised Pay As You Earn (REPAYE) Plan, and all borrowers who are currently enrolled in REPAYE will be automatically transferred … [Read more...]
Why Do Workers Take Less Paid Time Off Than They Can?
In a 2023 survey, nearly nine out of 10 workers said it was extremely or very important to have a job that offers paid time off (PTO) for vacations, doctor appointments, and minor illnesses. Yet almost half said they take less time off than their employers allow. Here are the top reasons they gave for not using all their PTO. Source: Pew Research Center, 2023 (survey did not include workers with unlimited paid time off) Link to Printable PDF: 2024 03 March … [Read more...]
Beware of These Life Insurance Beneficiary Mistakes
Life insurance has long been recognized as a useful way to provide for your heirs and loved ones when you die. While naming your policy's beneficiaries should be a relatively simple task, there are a number of situations that can easily lead to unintended and adverse consequences. Here are several life insurance beneficiary traps you may want to discuss with a professional. Creating a taxable situation Generally, life insurance death proceeds are not taxed when they're paid. However, there … [Read more...]
Individual Bonds vs. Bond Funds: What’s the Difference?
Individual bonds and bond funds can both provide an income stream, but there are important differences. An individual bond can offer more certainty and stability than a fund, while a fund can offer diversification that might be difficult to obtain with individual bonds. Coupon, maturity, and yield An individual bond has a coupon rate — the annual interest rate paid on the face value of the bond — and a maturity date, which is the date the principal is returned to the borrower. If … [Read more...]
Braving the Housing Market? An Assumable Mortgage Might Be the Solution
This past year, the housing market has experienced a perfect storm, with high interest rates and inflation resulting in reduced purchasing power for homebuyers. In addition, many current homeowners were reluctant to sell — and give up their lower mortgage rates — leading to lower housing inventory and higher home prices. If you have been struggling to buy a home in the current market, one possible solution is to look for a home with an assumable mortgage. If you're thinking of selling your … [Read more...]
Saving Less? You’re Not Alone
The U.S. personal saving rate — the percentage of personal income that remains after taxes and spending — was 3.8% in October 2023. The saving rate spiked to an all-time high during the pandemic, when consumers received government stimulus money with little opportunity to spend, but fell quickly as stimulus payments ended and high inflation ate into disposable income. The current level is well below pre-pandemic saving rates. A low personal saving rate means there is less money available on a … [Read more...]
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