Month: January 2016

Income Planning May Save Taxes on Social Security Benefits

No one can say for sure how many pages or words are in Internal Revenue Code, and it’s a hotly debated topic online. What’s not debatable is the U.S. tax code is the most convoluted government revenue system in the world. The complexities can be mind numbing, and it only gets worse when you have to compute taxation on Social Security benefits. The qualified retirement plan quandary propagates the theory that during your golden years, you’re in a lower tax bracket than your working years. There is a growing movement among economists tax brackets will remain equal or experience...

Read More

Learn What You’ve Earned in Social Security Benefits

Qualifying for Social Security benefits seems easy enough to understand if you’re a W2 employee or self-employed tax payer. To qualify for Social Security, you need 40 quarters of wages subject to Social Security payroll taxes. That’s just 10 working years, which seems like a low entry point into the program. But Social Security benefits are based on the average of the highest 35 years of earnings. That’s the real number, a number you need to become acquainted with. There are several life scenarios you have experienced that may motivate you to work longer to achieve a better average...

Read More

Maximizing Social Security Benefits Means Managing Them

Social Security is America’s number-one retirement plan. For many Americans, it’s their only retirement plan. With that much at stake, it’s time to do your homework before you determine when and how you’re going to file. Retirement planning is not a do-it-yourself activity. You need to engage a financial advisor who has real knowledge of the Social Security system to maximize your benefits. Before having a conversation with a retirement consultant, complete your homework. There are seven basic assignments you need to prepare for your meeting. Two of these assignments are related to each other; your health status and...

Read More

Were Last Year’s Changes in Social Security Just the Beginning

In 2015, a bipartisan Congress secretly pilfered the Social Security Trust Fund and transferred billions to prop up the depleted Disability Insurance Trust Fund by changing two laws: file-and-suspend and restrictive application. These changes affect a majority of baby boomers near retirement. If you were not age 62 before December 31, 2015, you can no longer file a restrictive application. If you’re age 66 after to April 30, 2016, you can no longer file and suspend. If you still think you may be eligible, talk to a financial advisor who understands Social Security. By removing this key provision in...

Read More

Does Social Security’s History Foretell Its Future

The history of Social Security has several backdrops to it, the Great Depression and World War II. But the idea of a state-run pension system was originally developed in Wihelmine Germany in 1889 during the reign of Otto von Bismarck. Franklin Delano Roosevelt introduced Social Security in 1935 in response to increasing longevity and the hardships of the Great Depression on the average American. It was developed as insurance program, not a welfare entitlement. During the early concept of Social Security, a debate over whether it should be an entitlement or insurance raged within FDR’s own cabinet. Secretary of...

Read More