A digest of timely information and insight about finance, investing, and retirement.
Every retiree should make this tax move right now, according to a new warning from the IRS | Time-Money
The IRS has a message for retirees: make sure you’re paying enough federal income tax. The Tax Cuts and Jobs Act of last December changed the income tax calculations for most filers, and employees aren’t the only ones who need to double check they’re withholding the right amount. On average, most retirees will likely see a decrease in tax liability and owe slightly less, although it varies by individual. Retirees who receive monthly pension income or annuity checks may well need to increase or lower the amount of taxes they pay. The easiest way to simplify your tax payments and get back to enjoying retirement is to use the IRS’ online withholding calculator, which incorporates the new tax law rule changes.
A new strategy for managing health costs in retirement | PlanAdviser
Health care cost projections illustrate how managing medical conditions through simple, positive lifestyle choices can result in measurable savings for health expenses in retirement, according to a new report from Healthy Capital in collaboration with the Insured Retirement Institute. In addition, the report explains how utilizing annuities to provide guaranteed income helps address Americans’ concern for affording health care in retirement. A case study details how utilizing the savings through condition management can fund staggered annuities and create a lifetime income stream.
Yes, you should pay off your mortgage before retiring | Washington Post
Four reasons why it makes sense—with one caveat: You shouldn’t empty out your savings to pay off your mortgage. That is not a wise financial move. You don’t want to end up house rich and cash poor, meaning all your money is locked into the equity in your home.
Americans think 61 is the ideal age to retire; is it? | CNBC
Americans think the ideal age to retire is 61. Unfortunately, it may be wise to wait longer. In a recent survey from financial website Bankrate, 10 certified financial planners from different parts of the country said that 63 is a more realistic age for retirement, and many experts believe you should wait until you’re at least 70.
Three easy ways to boost retirement, emergency savings by 30% | Forbes
No, the lottery isn’t the answer, nor is thinking positive thoughts. If you want to save more, you have to spend less. Stay home more. It’s that simple. Just go out to eat and drink less. It really adds up. The latest bankrate.com survey lays it out: Nearly four out of 10 Americans polled go out three times a week to eat or for coffee or drinks. They spend more than $2,400 on restaurant meals and takeout meals alone.
Why these teachers’ retirement plans aren’t making the grade | CNBC
Here’s what you need to know about 403(b) plans for public school workers. Other deferred compensation plans for public employees such as 401(k)s or 457 plans may be available to teachers in public schools. Find out if you have access, and see how the costs compare to your 403(b).
AnnuityA type of financial contract in which a person pays a lump sum or a series of payments in exchange for a guaranteed stream of income for the rest of their life.
Should a retiree in 2018, execute his/her RMD before or after the upcoming elections?
Dear Mr. Willis,
Every retiree has a unique financial situation and we suggest you consult your financial adviser for tax and RMD information.
I continually find it interesting that PERA articles focus on sound planning and management of retirement income, when one of the biggest pitfalls to watch out for, is PERA itself. When contracts are breached, how can any employee make good financial decisions?
Entering retirement with a guaranteed 3.5% annual increase was a carefully considered plan, yet within 2 years of my making that decision, PERA and the legislature broke this contractual agreement and took deferred compensation away from us by reducing and now halting the guaranteed annual increase.
In addition, this fall PERA-“care” enrollees who are insured by Anthem Blue Cross/ Blue Shield were informed their health insurance will increase by 59% ! This is occurring as the country’s overall inflation rate is only at 2.9%.
So, far from being a reliable retirement income, PERA retirees actually LOST 2.9% of their income since they removed completely the Annual increase. To date, PERA has taken back from my family close to $46,000, even as revenue has bounced back and far exceeded the short term affects of the 2007 recession. PERA coffers are flush and yet there is no talk of returning to the contract language they used to encourage early retirement prior to 2010.
PERA -“care”, as far as discernible, offered no justification or warning that insurance premiums, which seem to raise every year, were going to go up by 59%. I can’t imagine how that is justified, since the program offers no improved or expanded coverage over last year. There are no lower deductibles, or expansion of services, no extension of the networks, and no improvement in the product whatsoever. How can careful retirement planning overcome sudden breach of contract, and predatory insurance practices?
In my research, I find that the only recourse will be through the U.S. Department of Labor, which handles fraudulent practices of self-funded employer insurance plans. I intend to make a formal complaint, and invite other retirees affected by the 59% increase to do the same. I will be copying and dating this statement, for my files, as PERA has repeatedly censored my comments submitted on these issues, and failed to publish almost any critical comments by others as well.
Dear Mr. Thorpe,
Thank you for your comments.
PERACare as you noted is self-funded and the premiums charged to participants reflect the costs of the plan. As you know, health care costs have outpaced inflation for many years. PERA has communicated to members the need for additional retirement savings to offset the cost of health care, especially for those retirees who are not yet eligible for Medicare. The premiums for the pre-Medicare age group tend to be higher because of utilization which drives up costs.
PERACare is a voluntary plan so you may be able to find something that better fits your unique health and financial situation in the health care marketplace.
…”As you know, health care costs have outpaced inflation for many years”.
Not by 59%. Insufficient explanation.
…”the premiums charged to participants reflect the costs of the plan”
You just stated: you have to pay 59%, because that’s what we’re charging!
Circular reasoning
…”you may be able to find something that better fits your unique health and financial situation in the health care marketplace.”
As soon as PERA directs the subsidy I earned to me, for my use in the market, then that would be fine. How do I apply to collect this benefit?
Mr. Thorpe,
Subsidies are paid to participants in PERACare as specified in state statute. Any change in how these subsidies are paid would require legislation.
And taking away our cola for the next two years doesn’t help . So hard to stay ahead . PERA really doesn’t care…??♂️