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November, 2012:

Are You Leaving Social Security Money on the Table? You Might Be, If You Don’t Understand and Use This One Rule

Note: with the passage of the Bipartisan Budget Bill of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. Many couples that have done some planning with regard to filing for Social Security retirement benefits have figured out how to coordinate between the higher wage earner’s benefit and the lower wage earner’s benefit.  Often it makes the most sense to file for the lower wage earner’s benefit early, at or sometime near age 62, while delaying the higher wage earner’s benefit out to as late as age 70. This method allows for a maximization of those two benefits.  If you’re really astute, you probably picked up on […]

Join in the Movement – Add 1% to Your Savings This Year!

Over the past several weeks we’ve been writing articles to encourage all Americans to add at least 1% more to savings in the coming year. More than 20 of my fellow bloggers have submitted articles, and these articles include many great ideas that you can apply in order to increase your savings rate in the coming year. Since many employees are going through annual benefit elections right about now, it’s a very good time to increase your annual contributions to your retirement savings plans. Big changes are easiest to undertake with incremental steps – starting with adding 1% can have a great impact and get the momentum going! Listed below are all of the articles that I’ve been notified about so far – 22 23 in all! These folks are very smart, and have shared some great ideas. You owe it to yourself to check it out, and then take […]

Increase Your Retirement Savings by At Least 1% in the Coming Year

Several financial bloggers (20 at last count!) have been diligently writing articles of encouragement for people to consider increasing their savings rates by at least 1% in the coming year. Since many employees are going through annual benefit elections right about now, it’s also a very good time to put in an increase to your annual contributions to your retirement savings plans. Small steps are the easiest to take, and the least painful – so why not set aside an additional 1% in your retirement plan in the coming year? The list below includes a boatload of ideas that you can use to help you with this increase to savings. I’ve heard from several more bloggers who are going to put their posts up soon. If you’re a blogger, see the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in […]

IRS Sets 2013 Standard Mileage Rates

For several different categories of deductions, there are standard rates set by the IRS for mileage.  The deductions are for business-oriented mileage, both for your own business and for miles driven on behalf of an employer (if deductible), as well as for medical purposes, deductible moving costs, and for charitable activities. These rates are set on a “per mile” basis.  The IRS calculates the applicable costs associated with driving these miles on an annual basis, which includes the cost of fuel, maintenance, insurance, taxes, and the purchase price of the vehicle (or rather, depreciation).  This allows for a much more simple method of deducting these costs rather than adding up all of the costs of a vehicle and then allocating an appropriate portion to the deductible use. You can choose between using the mileage rate or adding up all of the costs for your vehicle use, but once you’ve started […]

Holiday Spending

Now that the Holiday season is coming into full swing, I thought I spend a little bit of time talking about keeping your budget and money in control when it comes to the giving of gifts, the getting of gifts and some ideas to make your thought count without breaking the bank (or bending your credit card). The Holidays are a time of year where we can reflect on the people in our lives that we love, miss and want to give back to for all they have done for us throughout the years. It’s natural that we want to give as much as we can and often what we want to give may not equal what we can afford. In some cases, the number of people we want to give to exceeds our budget as well. This is where we can get into trouble. After the initial hype and […]

C’mon America! Add 1% More to Your Retirement Savings This Year!

My fellow financial bloggers and I have come together to encourage an increase in retirement savings this year.  Since many employees are going through annual benefit elections right about now, it’s also a very good time to consider increasing your annual contributions to your retirement savings plans.  Small steps are the easiest to take, and the least painful – so why not set aside an additional 1% in your retirement plan in the coming year? The list below includes a boatload of ideas that you can use to help you with this increase to savings.  I’ve heard from several more bloggers who are going to put their posts up soon. If you’re a blogger, see the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far (newest are at the top): From Dana Anspach: Can You Spare […]

The “1% More” Movement’s Going Strong! Save 1% More In Your Retirement Plans This Year

United States (Photo credit: Wikipedia) The financial blogosphere has responded with many articles recommending ways that all Americans can increase their savings rates this coming year.  This has been a concerted effort by financially-oriented bloggers to help folks come up with ways to increase savings during this time of employer-benefit enrollment. We have several more bloggers who are going to put their posts up soon. See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far (newest are at the top): From Ken Weingarten: The 1% Challenge (Should you dare to accept) From Richard Feight: The 1% Challenge! From John Hunter: Save What You Can, Increase Savings as You Can Do So From Emily Guy Birken: Increase your savings rate by 1% From Jonathan White: Ways to increase your retirement contributions 1% in 2013 From Alan […]

Tips from the IRS to Reduce Large Refunds or Large Tax Bills

Quite often in my tax practice I see very large refunds being claimed every year, and sometimes (not as often) I see very large amounts of tax owed with the tax return.  While a large refund isn’t necessarily a bad thing, it can be in your best interest to reduce the amount of your refund and receiving more take-home pay every month.  After all, it’s your money, why should the IRS hold onto it for a year before you get it in your hands? On the other end of the spectrum, a large tax bill when you file your tax return can cause some problems – if it’s routinely greater than $1,000, you may have additional penalties applied to the amount that you owe. Recently the IRS issued their Summertime Tax Tip 2012-22, with tips on how you can reduce your large refund or large tax bill.  The text of […]

A Dozen Ways to Increase Your Savings Rate

United States (Photo credit: Wikipedia) A baker’s dozen bloggers have now published articles encouraging all Americans to commit at least 1% more to retirement savings this year. We have several more bloggers who are going to put their posts up soon. See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far (newest are at the top): From Emily Guy Birken: Increase your savings rate by 1% From Jonathan White: Ways to increase your retirement contributions 1% in 2013 From Alan Moore: Financial Challenge – Should You Choose To Accept It From Ann Minnium: Gifts That Matter From Laura Scharr: In Crisis: Personal Savings- Here Are Six Steps to Improve Your Retirement Security From yours truly: Add Your First 1% to Your 401(k) From Steve Stewart: Seriously. What’s 1 percent gonna do? From Theresa Chen Wan: […]

Special Treatment for an Older Spouse/Beneficiary of an IRA

Note: the situation described in this post was originally brought to my attention by Mr. Barry Picker, of Picker, Weinberg, & Auerback, CPAs, P.C.  Mr. Picker is another of those “rock stars” in the world of retirement plan knowledge, up there with the best of them.  Many thanks to Mr. Picker for sharing his wealth of knowledge. There is a special set of circumstances regarding inherited IRAs that only fits a few cases – but for those cases the rules can work out favorably and it is important to understand how this operates.  The circumstances are that a younger spouse has died and left an IRA to the older, surviving spouse.  In this case, if the decedent-spouse had already begun receiving Required Minimum Distributions (RMDs) from the IRA, the survivor-spouse, if sole beneficiary of the IRA, can make the distribution rules work in his or her favor. In any case, […]

More Blog Articles Encouraging Savings!

United States (Photo credit: Wikipedia) Many thanks to all of the bloggers who have been publishing articles encouraging all Americans to commit at least 1% more to retirement savings this year. We have several more bloggers who are going to put their posts up soon. See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far: From Michele Clark: Employer Retirement Accounts: 2013 Contribution Limits From Roger Wohlner: Need Post-Election Financial Advice? Try the 1% Solution From Sterling Raskie: A Nifty Little Trick to Increase Savings From Theresa Chen Wan: Saving for Retirement: The 1% Challenge for 2013 From Mike Piper: Investing Blog Roundup: Saving 1% More From Robert Wasilewski: Increase Savings Rate By 1% From Steve Stewart: Seriously. What’s 1 percent gonna do? From yours truly: Add Your First 1% to Your 401(k) From Laura […]

Add Your First 1% to Your 401(k)

Many of my fellow bloggers and I have become concerned about how low the rate of savings has been for Americans in general.  To see a list of all of the articles in the 1% More Movement, check out the article at this link. Since November is traditionally the time when corporate employees make elections for all other benefits, including health insurance, life insurance, and other employee benefits, now is a good time to also consider increasing your 401(k) contributions. For my article, I’m focusing on the employee who hasn’t been participating in a 401(k) plan at all. Your First 1% in Your 401(k) If you haven’t been putting anything at all into your 401(k) plan at all, putting that first 1% into the 401(k) plan can be a little scary.  But you need to know that this is a monumental action.  Getting started with savings is the most important […]

Save 1% More! Here are 7 ways to do it

United States (Photo credit: Wikipedia) Seven bloggers have now published articles encouraging all Americans to commit at least 1% more to retirement savings this year as they make their benefit elections. We have several more bloggers who are going to put their posts up soon. See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far: From Michele Clark: Employer Retirement Accounts: 2013 Contribution Limits From Roger Wohlner: Need Post-Election Financial Advice? Try the 1% Solution From Sterling Raskie: A Nifty Little Trick to Increase Savings From Theresa Chen Wan: Saving for Retirement: The 1% Challenge for 2013 From Mike Piper: Investing Blog Roundup: Saving 1% More From Robert Wasilewski: Increase Savings Rate By 1% From Steve Stewart: Seriously. What’s 1 percent gonna do? Thanks to all who have participated so far – and keep those […]

Social Security Bend Points in 2013

When the Social Security Administration announced the Cost of Living Adjustment (COLA) for 2013, this also allowed for calculation of the bend points for 2013. Bend points are the portions of your average income (Average Indexed Monthly Earnings – AIME) in specific dollar amounts that are indexed each year, based upon an obscure table called the Average Wage Index (AWI) Series.  They’re called bend points because they represent points on a graph of your AIME graphed by inclusion in calculating the PIA. If you’re interested in how Bend Points are used, you can see the article on Primary Insurance Amount, or PIA.  Here, however, we’ll go over how Bend Points are calculated each year.  To understand this calculation, you need to go back to 1979, the year of the Three Mile Island disaster, the introduction of the compact disc and the Iranian hostage crisis.  According to the AWI Series, in […]

Financial Bloggers Encourage Americans to Save 1% More

United States (Photo credit: Wikipedia) We’re now up to five six posts published in support of the movement to encourage all Americans to commit at least 1% more to retirement savings this year as they make their benefit elections.  We have several more bloggers who are going to put their posts up soon.  See the original post for details on how to join the action: Calling All Bloggers! Listed below are the articles in our movement so far: From Michele Clark: Employer Retirement Accounts: 2013 Contribution Limits From Roger Wohlner: Need Post-Election Financial Advice? Try the 1% Solution From Sterling Raskie: A Nifty Little Trick to Increase Savings From Theresa Chen Wan: Saving for Retirement: The 1% Challenge for 2013 From Mike Piper: Investing Blog Roundup: Saving 1% More From Robert Wasilewski: Increase Savings Rate By 1% Thanks to all who have participated so far – and keep those links […]

A Nifty Little Trick to Increase Savings

A nifty little trick that can be part of your savings plan is simply this: once a debt is paid off, still treat that payment as a bill – but now direct that bill payment to your bank account, IRA, or employer sponsored plan. Here’s how it works: Let’s say you have a car payment of $250 per month. You’ve worked hard to get the debt reduced and eventually (maybe even early) you pay off your loan on the car. What a feeling! Instead of allocating the money to be spent elsewhere, such as buying another car or spending it on other items you probably don’t need, consider taking that $250 per month and reallocating it to yourself. The easy thing about this is that you’re already used to paying it, you’ve already budgeted for it, why not pay yourself? Also, you can consider putting the payment to yourself on […]

Calling All Bloggers – Let’s Increase America’s Savings Rate in November!

I’m sure that I’m not alone in the financial planning world with my concern about the rate of saving toward retirement across this great land.  Recent figures have shown that we Americans are doing a little bit better of late, at a 5% savings rate versus around 1% back in 2005 – but this is a dismal figure when you consider how most folks are coming up short when they want to retire.  Rather than sitting by idly and wringing my hands, I thought maybe something could be done to encourage an increase in savings – if only by 1%, this can be a significant step for lots of folks.  And now, in November, is the perfect time to do this, as most corporations are going through the annual benefit election cycle, so the 401(k) (or 403(b), 457, or other savings plan) is right at the forefront for many folks. […]

IRS Warns of Phony Websites

It pays to be careful out there on the interwebs.  You never know what you might be getting into if you don’t pay close attention to the addresses that you click on.  Recently the IRS issued a warning about certain scams that have been making the rounds recently.  The funny thing is, they had to issue their warning a second time because they initially posted an incorrect address. At any rate, the text of the IRS’ Corrected Special Edition Tax Tip 2012-13 is listed below: Don’t Fall for Phony IRS Websites The Internal Revenue Service is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page. The actual IRS e-Services page offers web-based products for tax preparers, not the general public.  The phony web page looks almost identical to the real one. The IRS gets many reports of fake websites […]

How is the Maximum Social Security Benefit Calculated?

Each year when the Social Security Administration announces the Cost Of Living Adjustment to benefits for the coming year, with similar ballyhoo they announce the maximum benefit amount available for the coming year.  For 2013, the maximum Social Security benefit for someone reaching Full Retirement Age (FRA) in that year will be $2,533, an increase of $20 over 2012. In the wake of these announcements a couple of weeks ago, a reader (thanks, DS!) sent me a question: Why is it that the maximum Social Security benefit only increased from $2,513 to $2,533?  This is only an increase of 0.8%, while the COLA increase indicated that benefits would climb by 1.7%? This is a drawn out and complicated situation to explain, but I think it’s important to fully understand.  First, you have to realize that when the Social Security folks publish this maximum amount, they are talking specifically about someone […]