As much as I wanted to put the word unintended before consequence in my title, I had a hard time believing that what I’m about to write about was unintended. As many of you are aware, the Affordable Care Act a.k.a. “Obamacare” is the law passed that requires, among other things, that everyone carry health insurance, subject to some specific exclusions. What I want to talk about is how this affected my insurance specifically and likely affected the insurance of many others. Before the Act was passed my family and I enjoyed health insurance through our HSA. A health savings account allows a person or family to have a high deductible health insurance plan while also making tax deductible contributions to an account that can amass funds for medical expenses. Funds from the account that pay for qualified medical expenses are tax free. Self-employed individuals can also deduct their health […]
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Tax Time is Over. Maybe.
For most folks tomorrow marks the one week anniversary of filing their 2014 tax return. Not much needs to be done after they’ve filed except for deciding to have more withheld in 2014 for those folks who had to write a check to Uncle Sam or deciding what to do with the refund (hint: put it in an IRA) for those folks who got a refund. What happens when the return may have been submitted with mistakes or perhaps costly errors? Generally, if the error is minor the IRS will correct errors or accept returns without certain forms or schedules attached. For those returns that have a change in filing status, income, deductions, and credits then filing an amended return will most likely be appropriate. For those folks needing to file an amended return they are allowed to file using form 1040X. Form 1040X will allowing corrections to earlier filed […]
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Obamacare and Your 2013 Tax Return
So – you’re considering your income tax return (or maybe you’ve already filed) and you’re wondering if there are things you need to know with regard to Obamacare. Fortunately, it’s not much (for most folks), for your 2013 return anyhow. Next year will be a different story. The IRS recently produced their Health Care Tax Tip HCTT-2014-10 which lists some tips about how the health care law impacts your 2013 tax return. The actual text of the Tip is below: What do I need to know about the Health Care Law for my 2013 Tax Return? For most people, the Affordable Care Act has no effect on their 2013 federal income tax return. For example, you will not report health care coverage under the individual shared responsibility provision or claim the premium tax credit until you file your 2014 return in 2015. However, for some people, a few provisions may […]
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File and Suspend in the Crosshairs?
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. Apparently in the President’s recent budget documentation there is a brief mention of a desire to curtail the availability of File and Suspend as an option for Social Security benefit filing. The reason, it appears, is that the Obama administration views this option as one used only by high income folks to take advantage of the government with this valuable option. The problem with that viewpoint is that it is used by folks of all income levels, and in fact if it is taken away this could cause […]
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myRA? What’s the point?
After the President’s state of the union announcement of the new myRA account, my first reaction was: Did we need this? What’s so “out of reach” about a regular Roth IRA? And if there was a great hue and cry for this, why hasn’t the marketplace provided it already? After all, there are custodians who will provide a no-fee Roth IRA with no account minimum already (TD Ameritrade comes to mind). Plus, there are plenty of ways to get a bond-like return with no costs or account minimums as well. All that I can find that is different about the myRA accounts is that the bond investment (same as the TSP “G” fund) has downside protection – meaning that the funds in the myRA account will never reduce in value, only grow or stay the same. As with any gift (and downside protection is indeed a valuable gift), there is […]
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Penalty for Having No Health Insurance
Note: this provision has been repealed beginning with tax year 2019. As you may already be aware, individuals are required to carry health insurance on themselves and their dependents, as of January 1, 2014. This is the mandate set forth in the Affordable Care Act – and of course it’s an important part of making the whole Act work. Small businesses (less than 50 employees) have a similar mandate to provide coverage for employees beginning in 2015, or face penalties themselves. Without mandating insurance coverage for everyone, the system can’t sustain the lower-cost options for folks who desperately need the medical coverage. This includes folks who are not covered by any other means (employer, Medicare, Medicaid or individually-purchased policies) and who have medical problems that require costly care. With the mandate, healthier individuals will also have to pony up and purchase health insurance, so that the overall cost is spread […]
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Goals for 2014
Goals setting and resolutions are among the top things on peoples’ minds when they start the New Year. And rightfully so. A new year signals a fresh, start a new beginning, a clean slate. Feeling refreshed and ready, most people start on their resolutions with the best of intentions – for about a week or two. Then they either give up, forget, fall back onto the same habits and routines that they promised they’d get out of the year before. It’s great to have resolutions – but they must be accompanied by resolve. What is resolve? Resolve, according to Merriam-Webster’s dictionary is to make a definite and serious decision to do something. This means planning ahead, expecting obstacles and figuring out ways to push through and achieve your goals. I recommend writing your goals or resolutions down. Here’s how: To begin write out your financial, fitness, work, eating, etc. goals […]
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2014 IRA MAGI Limits – Married Filing Separately
Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately, who did not live with his or her spouse during the tax year, is considered Single and will use the information on that page to determine eligibility. For a Traditional IRA (Filing Status Married Filing Separately): If you are not covered by a retirement plan at your job and your spouse is not covered by a retirement plan, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at your job and your MAGI is less than $10,000, you are entitled to a partial deduction, reduced by 55% for every dollar (or 65% if over age 50), and rounded up to the nearest $10. If the amount works out to less than $200, you are allowed to contribute at least $200. If you are covered by a retirement […]
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2014 MAGI Limits for IRAs – Married Filing Jointly or Qualifying Widow(er)
Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately, who did not live with his or her spouse during the tax year, is considered Single and will use the information on that page to determine eligibility. For a Traditional IRA (Filing Status Married Filing Jointly or Qualifying Widow(er)): If you are not covered by a retirement plan at your job and your spouse is not covered by a retirement plan, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at work, and your MAGI is $96,000 or less, there is also no limitation on your deductible contributions to a traditional IRA. If you are covered by a retirement plan at your job and your MAGI is more than $96,000 but less than $116,000, you are entitled to a partial deduction, reduced by 27.5% for every dollar […]
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2014 MAGI Limits – Single or Head of Household
Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately who did not live with his or her spouse during the tax year, is considered Single and will use the information on this page to determine eligibility. For a Traditional IRA (Filing Status Single or Head of Household): If you are not covered by a retirement plan at your job, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at work, if your MAGI is $60,000 or less, there is also no limitation on your deductible contributions to a traditional IRA. If you are covered by a retirement plan at your job and your MAGI is more than $60,000 but less than $70,000, you are entitled to a partial deduction, reduced by 55% for every dollar over the lower limit (or 65% if over age 50), and […]
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What’s in Store for 2014?
A few weeks ago I was interviewed by a local business journal about our firm’s thoughts as to how the market would react in 2014 and how to best prepare for that reaction. Essentially, the journal was asking us to predict where the market would be in 2014. Most of our clients know the answer I am about to write, which was, “No one can predict the direction of the market with any degree of accuracy.” “If that were the case, (as I told the interviewer) neither she nor I would be having this interview.” In other words, we’d be clinking our glasses on our respective tropical beaches because we’d have gotten filthy rich predicting and timing the moves of the market. Markets are pretty efficient – meaning that the price of any particular stock in any particular sector, industry or country is generally priced based on all available information […]
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2014 Mileage Rates for Tax Deductions
Recently the IRS published the mileage rates for various classes of deductible miles driven for tax year 2014. This amount is used in place of managing, collecting and tabulating the exact costs involved in operating a vehicle throughout the year. In order to use the standard mileage rates, you just track the miles you drive for each purpose (see below) and then compute the deductible mileage on your tax return when you file it the following year. Keep a log of the miles driven and the purpose of the trip to substantiate the deduction. This can be as simple as a paper calendar with your log notes, or more elaborate (check around, I bet there are apps out there for your iphone or other gadgets to do this). You have a choice to either use the standard rate or the actual expense of operating your vehicle. In either case, parking […]
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Save 1% More This year – Your Future Self Will Thank You!
Like so many other things, practicing financial awareness has few payoffs in the early stages. Think about exercising, eating right, putting in the extra effort at work, or taking a class to improve your skills. All of these things have a future payoff for the extra effort that you put into it today. Small steps matter in all of these areas, and before you know it you’ll look back and thank your earlier self for putting in the work to get where you are today. Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be. Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! How Much is 1% by Sterling Raskie, @SterlingRaskie Retire Rich With Only […]
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See How 1% More Can Benefit You
We have a project going to encourage people to increase personal savings by at least 1% more this month. This means that you would add 1% more of your income to your savings rate – so if you earn $75,000 per year in your household and you currently save around $2,250 per year, that’s 3%. Adding 1% more would bring that total to $3,000 for the year, which works out to an increase of only $62.50 per month. Give it a shot! Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be. Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! The 1% Mindset – Transformation Beyond Money by Neal Frankle, @NealFrankle Are You Part of The 1%? by […]
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You won’t regret it, I promise!
I often have opportunity to speak to young folks who are just starting out with their retirement accounts – this usually happens when we’re looking at ways to reduce taxes, primarily, so we start looking at IRAs and diverting income via 401(k) accounts. One of the things I point out is that this is an activity that you aren’t likely to look back on in 20 years and say “Gee, I sure wish I hadn’t saved all that money!” We may have many things we look back on in our lives and wish we hadn’t done them, but I think you’ll agree that saving is rarely in that category. So take the encouragement of my fellow blogging brethren and sistren (you betcha sistren’s a word, regardless of WP’s spell-checker!) and put aside at least 1% more of your income into your savings, starting right now. You won’t regret it, I […]
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Social Security Bend Points for 2014
When the Social Security Administration announced the Cost of Living Adjustment (COLA) for 2014, this also allowed for calculation of the bend points for 2014. 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 […]
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Add 1% More to Your Savings
Savings rates in America are really not what they should be. Studies have shown that, in order to achieve the goal of replacing 80% of your average pre-retirement income you should be saving at a rate around 17.5%. This doesn’t necessarily mean that 17.5% is the right number for everyone, because pensions and Social Security can help out in replacing some of your income in retirement. But the average savings rate for all Americans is something just south of 5% – so we can definitely do a better job. So make the effort to apply at least 1% more to your savings rate this November. It certainly can’t hurt! Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be. Thanks to everyone who has participated so far – […]
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Bloggers Are Encouraging Adding 1% More to Your Savings Rate
In November we financially-oriented bloggers have banded together to encourage folks to increase their retirement savings rate by at least 1% more than the current rate. It’s a small step, but it will pay off for you in the long run. Given the poor level of savings rate (less than 5%) these days, even this small step will be a big boost for many people’s savings. Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be. Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! The Journey of $1 Million Dollars Begins with 1% by Richard Feight, @RFeight Give Yourself A Raise by Ben Rugg, @BRRCPA The 1 Percent Solution by John Davis, @MentorCapitalMg Friday Financial Tidbit-What increasing your […]
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Social Security Figures Increase for 2014
Recently the Social Security Administration released the updated figures for 2014, including the wage base, earnings limits, and the increase to benefits. For 2014, the wage base for Social Security will rise to $117,000. This is the maximum amount of W2 wages that are subject to the 6.2% employer- and employee-paid Social Security tax. This amount represents an increase of $3,300 over the wage base of $113,700 in 2013. In addition to that increase, benefits to eligible recipients of Social Security retirement will increase by 1.5% in 2014. This is slightly less than the 1.7% increase to benefits in 2013. This brings the average monthly benefit for all retired workers up by $19, to$1,294 in 2014. For the average couple who are both receiving Social Security benefits, the COLA increase is $31 per month, for an average benefit of $2,111 in 2014. Likewise, there was an increase announced to the […]
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November is “Add 1% More to Your Savings” Month
That’s right, we unofficially declared November to be “Add 1% More to Your Savings” month. So you can add that to the month-long observances like: No-shave November International Drum Month Sweet Potato Awareness Month and many more (see the list at Wikipedia) In November we encourage folks to increase their retirement savings rate by at least 1% more than the current rate. It’s a small step, but it will pay off for you in the long run. Below is the list of my fellow bloggers who have written articles showing ways that you can start to increase your savings rate, as well as showing what the benefits can be. Thanks to everyone who has participated so far – and watch for more articles in the weeks to come! The 1 Percent Solution by John Davis, @MentorCapitalMg Friday Financial Tidbit-What increasing your retirement contributions 1% can do for your retirement account by Jonathan White, […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.