This article about Social Security and how it handles its own mistakes blows my mind (and makes me angry): MSN.
Where my SS experts at? Question for my friend.
Successful CPA now but had many years without income as a SAHM. Every year she continues working her SS estimate increases. She is assuming that when she runs the numbers on the SS website, they are assuming that if she says that she isnât going to take SS until 70 they think she will be working until 70. Is that an accurate assumption? Is there a way to know what her SS will be if she quits working at 59 but doesnât start drawing SS until 70?
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I think she can try playing with this calculator that takes into the account age at retirement and yearly income:
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@Youdon_tsay, the link BunsenBurner posted lets you model current and future earnings assumptions and retirement dates. I played around with it and a half-time job at minimum wage ($15 here) would increase my benefit by $30 at normal retirement age. Half of Hâs benefit would still be larger.
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There is a %age work formula for those who did contribute to SS. As I have posted here many times, I worked for 7 years in states where SS was taken out of my teacher pay, and I worked in high school and college. My SS benefit would be over $600 a month but as it stands with the Offset and windfall provisions, itâs just enough to pay my Medicare premium every monthâŠand I get a net deposit of about $30.
Iâm not complaining. Just sayingâŠif I had never worked a day in my life, Iâd be able to draw on my husbandâs earnings. Itâs a little weird.
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Oh, interesting. I thought for SS you could get the greater of own formula or half spouse. Is it different because of the teaching factor?
It has nothing to do with being a teacher. Anyone who hasnât contributed to SS like many government employees, as well as teachers, and even police and first responders in certain states are subject to the offset and windfall provisionsâŠand cannot collect on their spouse earnings.
But back to the subject of this threadâŠanyone planning retirement who can not collect off their spouseâs earnings very much should consider this when doing retirement planning.
@Colorado_mom scroll up and read the two very good responses that explain this.
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Right! This thread is good because it shows how there can be sooo many variations for âyou/spouseâ scenarios.
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I thought I would post about the âlatest infoâ in Kiplingerâs Personal Finance (July 2023, Special Double Issue) - articles on âthe cost of rising home valuesâ, âCut your social security taxesâ, 7 pages of âdealsâ. Three main articles: âRevealed: Readers Choose Top Financial Providersâ; âWhere to invest Nowâ; and â9 Smart Moves to Protect Against Fraudâ.
Another article âA Financial Guide to Gray Divorceâ under Money Smart Women - a one page article but very savvy information. One thing pointed out is the capital gains exclusion as a couple ($500,000) while you still qualify for that, and invest the proceeds in income-producing asset. âMoney mattersâ pointers. âWhatever your age, itâs critical to get your ducks in a row if you are considering filing for divorce and to be as prepared as possible if you are blindsided.â
The rising home values read went through a good analysis of assessments/taxes, getting the breaks you deserve, etc. Talked about lawmakers in several states considering measures to curb property taxes. Listed 5 states with the highest average property taxes and average property tax in 2022. In my location, the property tax assessments have gone up in the last few years - to kind of âcatch upâ to being closer to real property value. This yearâs notice was higher than our 1/2022 property appraisal (when we took out a home mortgage) â and I was able to send in my appraisal to get the assessment significantly reduced (they put it as $600 under the appraisal) - the new assessment was provided within a day via email (didnât have to go through an appeal - which in our area is to going to a board for the challenge on valuation.
They had a reader poll on being a victim of fraud or identity theft, and gave 4 categories along with âotherâ â we actually had a false tax return filed with our daughterâs personal information when she was 17 (we found out about it when our accountant tried to file our tax returns that year, and her social security was already used on another return) â and it made sense that they wanted the child tax credit and also other credits with using her on a false tax return. Now she gets a IRS code generated for that tax year for her filing. I wonder if they got it through some kind of public school record (she is the only DD who attended a few years of public school) - our other 3 social security numbers were not compromised.
The deals article is bargains and values in tech, travel, shopping and wines; also promising stocks and other investing deals.
Personal finances - so important in life, and very much so for being able to retire.
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What are opinions on annuities? A friend who recently retired was talking to us earlier this week and they put a fair amount in annuities. He was recommending the 10 year deferred option, with the spousal benefit as well. I remember looking into this almost 10 years ago and in general, thought that the fees outweighed any benefits.
In this case, would they be suggesting annuities for which purpose?
- Converting a lump sum into a lifetime stream of income.
- As a tax deferred investment vehicle for those who have already used up other such options that cost less (IRA, 401k, 403b).
?
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Thereâs one poster on this thread that is a big fan of annuities, and Iâm sure theyâll be chiming in.
single life annuities can offer some benefit to an overall retirement portfolio, but personally donât see much value of combining life insurance and investments in the same product. I prefer to keep my life ins and investments separate. Statistically, you are betting that you will outlive the Annuity pool, which is based on already healthy individuals. Annuities definitely enrich the Agent, however, as the commissions are high.
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For my pension, there was a cash option. I choose the annuity option (with 50% spouse survival benefit) because it was really favorable numbers⊠even the financial planners we consulted told us to take it. We have purchased any annuity investments.
Converting a lump sum to a guaranteed per-month income for life.
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I am not a fan of annuities, generally speaking.
I donât dispute there maybe certain times when they appropriate as part of a diversified portfolio.
We each have one of these as part of our retirement portfolio. But we have other retirement income streams as well (defined pension for one, SS for the other, and a yet untapped 401K).
The reason annuities work for us is (1) Neither of us have pensions; (2) We needed to lower the risk on our portfolio, and our risk level now matches our comfort level; (3) Our annuities (which are all with insurance companies, and were vetted by our financial advisor), with the guarantees and some choices each year on them - and the rates have done well; (4) We have cash flow from annuities - we have withdrawals set up monthly/non-penalty â we had that set up with financial advisor and adjusted as needed. Annuities make up 31% of our assets, and the 5 of them mature within the next 10 years (we had two that matured and we replaced with two other annuities that have 10 year maturity). Each 6 months we sit down with our financial advisor.
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Seems ike reasonable approach.
We have small pensions, and my reasons for picking traditional pension / annuity option (not cash option) for mine were similar to some of your points. Also in that mindset we have a financial planner helping us plot out a long term scheme so that we always have a monthly âpaycheckâ auto-deposited into checking account. Itâs really nice to have that regular income, less need to fret over the market downturns.
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As noted above, personally not a fan of annuities (due to inflation risk), but am a big fan of Mike Piper who discusses the pros and cons in this blog:
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To me only seems like it makes sense to invest a smaller portion of oneâs portfolio upon retirement. I can understand why you donât like the product at all though.
I went to a couple sites. USAA had a lower payout then some but when I added my wife the monthly payment was interestingly the same. Nationwideâs payout was the highest from the minimal research I did (I am just over 50 and did an immediate annuity at $200k). I am still at least a few years from retirement, was just curious.