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June, 2013:

Medicare Part B

The next letter in our Medicare alphabet soup is Part B. Part B is essentially medical insurance that covers doctor’s services, outpatient care, home health services, and durable medical equipment. It will also cover some other services as well as well as many preventative services. As far as what doctors will and will not cover Part B depends on whether or not they have agreed to assignment. Assignment is simply your doctor or another health care provider agreeing to be paid directly by Medicare and be willing to accept the payment amount that Medicare decides is the value of the service. Agreement also means the doctor or health care provider cannot charge you any more than what the deductible and coinsurance amounts are. The basic cost for Medicare Part B for 2013 is $104.90 monthly. Individuals with higher AGI may end up paying more. The table below, courtesy of Medicare.gov shows […]

Book Review: Control Your Retirement Destiny

This new book is the first book from my colleague Dana Anspach.  Dana has been writing and blogging for quite some time now, primarily as the voice behind Money Over 55 for About.com (www.moneyover55.about.com).  Dana also is a practicing financial advisor and respected speaker. If you’re looking for a nuts-and-bolts, do-it-yourself primer on all things related to retirement, this is your book.  Ms. Anspach has put together a very complete overview of all of the areas that you need to consider in order to “Control Your Retirement Destiny”.  By following the advice in this book, you can figure out how much money you need to have to retire, where to put it (meaning, what types of accounts to use), how to invest it, and all of the other important topics that you need to know about. Along the way, you’ll learn what’s important to know about Social Security, taxes, investment […]

The Real Breakeven Point for Delaying Your Own Social Security Benefit and Taking the Spousal Benefit

Recently there was an article that I was involved with where we were reviewing the strategies of taking a restricted spousal benefit and therefore delaying your own benefit versus taking your own benefit.  An astute reader (Thanks BL!) pointed out that there was a bit of a flaw in the logic on the costs of delaying, and therefore a significant difference in the breakeven period. Briefly, the example went as follows: Say the wife, Michelle, has a PIA of $1,300 and Mike has a PIA of $2,500.  They’re both age 66, and Michelle files the restricted app and is eligible to receive $1,250 (half of Mike’s), which is only $50 less than she would receive if she filed for her own benefit. After four years of delay, she has given up $2,400 ($50 times 48 months) but now her benefit is $1,716 – $416 more than she would have received […]

Don’t Just Walk by That Dime on the Ground!

Have you ever been walking along the street and saw a dime on the ground?  Did you just walk right by, or did you stop to pick it up?  Heck, it’s only a dime, it’s not hardly worth the effort to bend over, right?  But what if it was a dollar?  Or a hundred dollars?  You wouldn’t just walk by that, would you?  What about $1,200? Unfortunately, many folks do this very thing with their 401(k) plan employer matching funds.  Most employers that sponsor 401(k) plans provide a matching contribution when you defer money into the plan.  Often this is expressed as a certain percentage of your own contribution, such as 50% of your first 6% of contributions to the plan. So if you make $40,000 a year and you contribute 6% to the 401(k) plan, that means you’ll be contributing $2,400 to the plan from your own funds, pre-tax.  […]

3 things you can do if you’ve filed for Social Security benefits too early

I often hear from people who, for whatever reason, decided to file for their Social Security retirement benefit immediately upon reaching 62 (or 66, or whatever age), and now they have found out that this wasn’t necessarily the best option for them to maximize their lifetime Social Security benefits. There are several things that you can do about this – three that come to mind at the moment.  Below we’ll work through each of these ways to fix a situation where you filed too soon. Pay it back If it’s been less than 12 months since you filed, it’s possible for you to withdraw your application for benefits and pay back all that you’ve received to date.  Once you’ve done this, as far as Social Security is concerned, you never filed.  All of your benefit options are intact, just as if you hadn’t filed in the first place. If your […]

Family Maximum and File & Suspend

Note: with the passage of the Bipartisan Budget Act 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. I recently received the following email from a reader: I am 66 and my wife is 45, and our son is 12.  I intend to delay my filing for Social Security benefits until age 70 in order to provide the highest survivor benefit for my wife since I’m so much older than her.  But I also realize that my wife and son may be eligible for benefits now if I file and suspend.  According to my SSA statement my benefit now at age 66 is $2,576.  Since my […]

The Qualified Terminable Interest Property (QTIP) Trust

Often we come up against situations in planning finances for folks where some special tools are necessary.  One of those situations, quite common these days, is when one or both members of a couple has children by a prior marriage.  The situation brings about some interesting questions when considering how the marital assets will be divided when one member of the couple has passed on. Daryl has three children by a prior marriage, and his wife Toni also has three children by a prior marriage.  Both Daryl and Toni have considerable assets from before their marriage – each has a investments and retirement accounts in their own name: Toni’s accounts are worth $350,000, and Daryl’s accounts are worth $300,000.  Given their lifestyle, they will not be needing much of their accounts early in retirement – but it’s quite likely that later in life they may need the accounts for medical […]

Book Review: How to Retire Happy

“The 12 most important decisions you must make before you retire” Author Stan Hinden, who is the former syndicated Washington Post “Retirement Journal” columnist, has just released his Fourth Edition of this book.  The book is Hinden’s commentary and advice, as well as a sort of journal, as he and his wife Sara entered into and have been living in retirement over the past 17 years.  Hinden retired in 1996 at the age of 69, at which time he began writing the “Retirement Journal” column.  He was nominated for a Pulitzer Prize in Commentary in 1998 for his work. This book is an excellent read for folks who are planning toward retirement or have recently retired.  Hinden has organized the process into 12 decisions, some of which include: “Am I Ready to Retire?”, “What Should I Do with the Money in My Company Savings Plan?”, and “Where Do I Want […]