Sunrises, Sunsets, and Rainbows

T ax deferred savings accounts are designed to help you save for the future.  The most common type is the Individual Retirement Account (IRA) which allows you to save pre-tax dollars and invest in various types of investments. When employers provide matching pre-tax dollars, the Individual Retirement Account can grow substantially.  "You postponed taxes on your contributions and earnings; you didn’t eliminate them."  (Source AARP)  Withdrawals from these accounts are taxed as income in the year you make the withdrawal.  Required Minimum Distribution (RMD) "You must start taking RMDs by April 1 of the year after you turn 73."  (Source: AARP). This RMD is calculated based on your age and the balance of your IRA at the end of the previous year.  The RMD amount must be withdrawn and included in your taxable income regardless of whether you need the money. Failure to take the RMD can result in a substantial tax penalty.  Tax Deferred Savings Accounts t...

Social Security provides a lifeline to retirees, widows, disabled, children, the blind.   Social Security is an invaluable resource for millions of Americans. It provides a lifeline to retirees who depend on the guaranteed income in retirement.  Widows Widows receive widowers benefits from Social Security, which can provide an extra source of income. Disability Assistance Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs provide assistance to people who meet requirements for disability.  Disability Benefits | SSA "Children" and "the Blind" Social Security also provides benefits to children and the blind. For children, these benefits may include survivor benefits for minors if a parent dies and disability benefits for those who become disabled before the age of 18.  Social Security also provides benefits for the blind who are unable to work due to their disability.  Medicare Part D - "Extra Help" Social Security ove...

  Social Security survivor benefits are a lifeline  ...for families who lose a loved one who worked and paid into the system. When a worker dies When a worker dies, their family members may be eligible for survivor benefits. These benefits can include a lump sum death benefit, as well as monthly survivor benefits for the family. The amount of the survivor benefits depends on the deceased worker’s Social Security earnings record. If the worker was covered by Social Security, the surviving spouse may be eligible for a one-time death benefit, as well as monthly survivor benefits. Surviving Spouse  If the surviving spouse is caring for the deceased worker’s child, they may also be eligible for additional benefits. For other family members, such as a parent or sibling, they may be eligible for a one-time death benefit, as well as monthly survivor benefits. The amount of the benefits depends on the deceased worker’s Social Security earnings record. In addition to the death bene...

R etiring can be exciting and daunting.   We never really know when end-of-life will occur.  Here are some essential documents that retirees must have:                                                                        Photo:  I. Styvar.  Homer, AK Critical  Documents W ill (Last Will & Testament) :  Preparing a Will is essential to ensure that your wishes are respected after you are gone. It should include details of how you would like your estate divided and who will be the Executor of your will. Your "Last Will & Testament" indicates how you’d like to divide your assets. Power of Attorney (POA): This document names an individual who will make financial and legal decisions on your behalf if you are unable to. Make sure you choo...

When it comes to healthcare, seniors face a unique set of challenges.  The cost of healthcare can easily exceed your budget. With the increasing costs of medical services, it can be difficult for seniors to afford the care they need.  Seniors 65 or older can sign up for Medicare. Medicare beneficiaries must pay a premium for Medicare Part B which covers doctors’ services and Medicare Part D which covers prescription drugs. The premiums paid by Medicare beneficiaries cover about 25% of the program costs for Part B and Part D. The government pays the other 75%. Medicare - Parts A, B, D Medicare can help seniors manage the cost of healthcare. Medicaid eligibility begins at age 65, providing seniors with access to healthcare services and prescription drug coverage. Medicare helps seniors cover the cost of doctor visits, hospital stays, and preventive services. However, Medicare does not cover all medical costs and may require seniors to pay for additional services. "Medicare ...

  Taxes are a significant expense.   No one is exempt from paying taxes (including retirees).    "Tax laws about retirement are confusing and constantly changing, but the one certainty is this: Your retirement money will get taxed. This includes Social Security! Far too many people think that because Social Security  is  a tax, it means the money is already taxed. It's not. People will have to pay taxes on up to 85% of their Social Security benefits. Not understanding that may lead you to believe you have more money saved than you really do."  (Quoted from:  I’ve Been a Retirement Planner for 17 Years—Here Are the 18 Biggest Mistakes Most People Make (msn.com)  ) Common Retiree Taxes  Property Tax - Ask your local Property Tax office if there is a Senior Citizen discount.  In Anchorage, Alaska the discount is 20%.  In Soldotna, Alaska, local property tax is waived. Personal property taxes can be deducted from your federal ...