If you’re facing the decision of when to file for your Social Security benefit, you’ve probably noticed just how confusing it can all be. There are so many decision-points in the system, it’s no wonder folks are confused. Depending on your point of view and how you count the decision-points, each person facing this decision has thousands of possible combinations to consider as they decide when to pull the trigger and file for benefits.
Recently I was going over a decision tree that I had built to describe the decision-making process for filing, and within this review I have counted that for a single, there are 14 decision-points and a total of 96 months in which a filing decision can be made, for a total of 1,344 combinations. Keep reading…
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Posted in: Social Security, social security benefits, social security retirement.
Tagged: Social Security · social security benefits
Before you sign a contract or buy a product consider the following before choosing your financial planner.
- Make sure they’re a CFP®. At the very minimum, a CERTIFIED FINANCIAL PLANNER™ has the met the education, exam, ethics and experience requirements in order to be qualified to discuss your financial planning needs. Anyone can call themselves a financial planner, but not everyone is a CFP®. This should be the starting point of your search. Just because the planner is a CFP®, doesn’t mean you should automatically work with them.
Keep reading…
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Posted on
Feb 27th, 2015
by author: sraskie.
Posted in: fee-only, fiduciary, financial planning.
Tagged: fiduciary · financial planning
Since we’re in the middle of income tax preparation season, I thought it was appropriate to share some of the tips that the IRS has put forth. Today’s tip is to take advantage of direct deposit for your tax refund. It can be very handy to have this option specified on your tax return, as you’ll see below. It’s faster, more secure, and much more convenient than the old paper check method.
Below is the text of IRS’ Tax Tip 2015-23, which details some of the reasons that it makes sense to use direct deposit for your tax refund. Keep reading…
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Posted in: income tax, irs, refunds.
Tagged: income tax · irs · refunds
Although there are literally tax preparers standing on the street corners (sometimes in ridiculous costumes), it can be tough to find a qualified income tax preparer near you. Of course, word of mouth is a good way to find a preparer, by way of your family or friends – but what if you still can’t find a qualified tax preparer that you can trust? Keep reading…
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Posted in: irs, tax preparers, tax scams.
Tagged: tax preparers · tax scams
Recently I had a chance to have some fun with some of my undergraduate students. Polling my entire class I asked them to make a list of wants (not needs) that they frequently spent money on. Answers varied from smartphones (and the respective bill), cable and satellite TV, dining out, coffee shops, beverages (you know which ones), and appearance (spending extra to dye hair, pedicures, etc.).
Here’s a list of how each expense was broken down as told by the students. In other words, it was their numbers not mine.
Keep reading…
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Posted on
Feb 20th, 2015
by author: sraskie.
Posted in: fee-only, fiduciary, financial planning, ira contribution limits, ira funds, ira money, iras, saving.
Tagged: fiduciary · financial planning · investment · IRA · retirement savings
When you 
have a retirement plan, or many different types of retirement plan, you may be faced with decision-points when it would be helpful to rollover one plan into another plan. But do you know which type of plan I can rollover my retirement plan into?
What follows is a description of the types of accounts that you can rollover each particular source account into, along with the restrictions for some of those accounts. The IRS also has a handy rollover chart which describes these rollovers in a matrix. Keep reading…
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Posted in: 401 k, 401 k 403 b, 457, IRA, qualified retirement plan, rollover.
Tagged: IRA · qualified retirement plan · rollover · roth ira
The IRS produces a list each year of the “dirty dozen” tax scams that they and taxpayers deal with.
I’ve kept track of these over the past several years, so I’ve included the changes to rankings from 2012 to this year for those items in the list that continue to be listed. Topping the list this year is phone scams, which was first listed in the dirty dozen in 2014, at #2. Keep reading…
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Posted in: #noTOP, irs, tax scams.
Tagged: irs · tax scams
Traditionally when we think of investing our minds turn to stocks, bonds, mutual funds or real estate. While these may or may not be the best investments for an individual’s portfolio there is one investment that is almost always the right choice for any individual – human capital.
Human capital is an individual’s worth of their own potential. Coined by economist Theodore Schultz, human capital can be invested in like any other asset in order to add value to an individual’s life through earnings, health, and quality of life. Keep reading…
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Posted on
Feb 13th, 2015
by author: sraskie.
Posted in: fee-only, fiduciary, financial planning.
Tagged: fiduciary · financial planning · investment
In this blog we’ve covered the Windfall Elimination Provision (WEP) from many different angles. Here we’ll go into some more depth on the actual calculation of the WEP, including how some of the factors are determined.
As you are likely aware, the Windfall Elimination Provision or WEP impacts your Social Security benefit when you are receiving a pension based on work where Social Security tax was not applied to the earnings. The point of WEP is ostensibly to act as an offset, since the reason no Social Security tax was applied to the earnings is because the pension is intended to replace Social Security benefits for that worker. WEP impact is applied as a reduction to the first bend point of the calculation of the Primary Insurance Amount. (Calculation of the PIA is explained further here.) Keep reading…
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Posted in: Social Security, wep, windfall elimination provision.
Tagged: social security benefits · WEP · Windfall Elimination Provision
With 2014 over and 2015 well on its way you may be finding yourself gathering all of your 2014 tax information and getting ready to file your income taxes. Some folks will be expecting refunds while others will woefully dread writing out a check to the IRS.
If you find yourself in the group of folks that will be writing a check to Uncle Sam, here are some tips to reduce your tax burden for 2015.
Keep reading…
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Posted on
Feb 6th, 2015
by author: sraskie.
Posted in: #noTOP, 2014 Tax Year, 2015 tax year, 401 k, 401k, alternative energy, deductions, financial planning, tax, tax credits, tax deferral, tax return.
Since the Affordable Care Act has been in place for over a year now, it’s important to understand what affects the health care law will have on you and your tax situation.
Recently the IRS issued a Health Care Tax Tip (HCTT-2015-06) which details how the health care law can effect you. The actual text of the Tip is reproduced below: Keep reading…
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Posted in: Affordable Care Act, income tax, income tax credit, irs, Obamacare.
Tagged: Affordable Care Act · income tax credit · Obamacare
In case you forgot to take your required minimum distribution (RMD) for 2014 there’s still hope in order to avoid the 50% (yes, that’s FIFTY percent) penalty of the amount not withdrawn.
If you missed taking the RMD for 2014 here’s what you can do. According to the IRS the penalty may be waived if you can establish that it was due to reasonable error that you didn’t take the RMD and that reasonable steps are being taken to remedy the error. That is, take the 2014 RMD right away (or as soon as you can let your custodian know) and it might not be a bad idea to take the RMD for 2015 as well (just to be on the safe side).
Once that’s done you or your tax professional need to fill out Form 5329 as well as a letter explaining the reason for not taking the RMD. And to quote my parents, “Don’t let it happen again!”
More information regarding required minimum distributions can be found here.
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Posted on
Jan 30th, 2015
by author: sraskie.
Posted in: 2014 Tax Year, required minimum distribution.
Tagged: financial planning · income tax · required minimum distribution · tax
Tax filing season is upon us! As you consider all of your options for filing your return this year, you might consider some of the exploring free tax filing for your return. Recently the IRS published their IRS Tax Tip 2015-06, which details information about two of the options for free tax filing that you might be able to take advantage of. The actual text of the Tip is below: Keep reading…
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Posted in: income tax, irs, tax preparers, tax return.
Tagged: irs · tax preparers · tax return
In this time of disappearing pensions, corporate downsizing, and high unemployment it becomes a great concern that many folks are still not saving enough for retirement. This may be due to a failure to realistically assess future costs or because we’re spending too much without saving – which is a hallmark of the baby-boom generation. Granted, there are plenty of good reasons why spending is out of control – with healthcare costs increasing all the time, for example. But I suspect that much more of the blame for our low savings balances is due to poor savings habits in the first place.
Keep reading…
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Posted in: financial planning, goals, retirement savings.
Tagged: financial planning · retirement accounts
Here’s a pretty neat strategy that you can try if you’re looking to save a bit more for retirement, college or even paying down debt. It works like this:
Whenever we’re out shopping or online shopping there’s always the temptation to purchase things we really don’t need. For example, I was at the store the other day and tried on a few pairs of jeans. Did I really need them? No. Did I want them? Of course. You may have seen yourself in a similar situation – wanting something but knowing you most likely didn’t really need it.
Keep reading…
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Posted on
Jan 23rd, 2015
by author: sraskie.
Posted in: budgeting, fee-only, fiduciary, saving.
Tagged: financial planning
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.
By now you should be somewhat familiar with the File & Suspend strategy, where an individual files for Social Security benefits and then immediately suspends them. This strategy is often used so that the individual can enable other dependents’ benefits (such as spousal or children) based upon his or her record, while delaying receipt of his or her own benefits in order to accrue delay credits on his benefit.
What you may not realize is that you don’t have to file & suspend at the same time. These actions can be decoupled – in other words, you could file for benefits at any time that you’re eligible, and then later (as long as you’re at least at Full Retirement Age) you could suspend your benefits.
Keep reading…
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Posted in: #noTOP, file and suspend, Social Security, Social Security spousal benefit.
Tagged: file and suspend · Social Security · social security benefits
As 2015 begins and the New Year’s resolutions start to fade, here’s a financial checklist for 2015 that can help make those resolutions a reality or enforce some good habits you’ve started.
Keep reading…
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Posted on
Jan 16th, 2015
by author: sraskie.
Posted in: #noTOP, fee-only, fiduciary, financial planning.
Tagged: fiduciary · financial planning
Recently Illinois’ Governor Pat Quinn signed into law the Illinois Secure Choice Savings Plan. This plan provides an automatic Roth IRA via payroll-deduction for some employees who do not have an employer-sponsored retirement savings plan.
Essentially this law will require employers with 25 or more employees to establish a payroll deduction program permitting the workers to defer earnings into a Roth IRA, beginning in June 2017. Employees will be automatically enrolled (hence an automatic Roth IRA), but the workers will have the opportunity to opt out of the program. The automatic enrollment includes a 3% salary deferral, but the employee can increase the deferral amount, up to the legal limitations (in 2015 it’s $5,500, $6,500 for folks over age 50). There is no company matching with this program. Keep reading…
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Posted in: #noTOP, Illinois Secure Choice Savings, IRA, myRA.
Tagged: IRA · myRA
You’ve likely heard or seen the commercials that urge you to consolidate your debt into “one low payment”. The concept makes logical sense and promises to free up some cash so it is easier to live paycheck to paycheck. The reason this usually doesn’t work is that it doesn’t address the real problem. The reason we get into this mess is because we have not learned how to spend within our income. What we need is a method to manage and organize our money so we make conscious decisions about how we spend it. A good book that I’ve used is “Your Money or Your Life” by Joe Dominguez.
How to Get Started
To get started you might try the following:
Keep reading…
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Posted in: budgeting, debt consolidation, financial planning.
Tagged: budgeting · debt consolidation · financial planning
Asset allocation and diversification are not the same. Perhaps some readers may benefit from a brief explanation of the two and how it may impact your investments. An investor may have excellent diversification but poor asset allocation and vice versa.
Let’s start with asset allocation. When we speak of asset allocation we’re talking about how we’re going to invest in a particular category of investments called asset classes. That is, we are choosing which assets are going to be in our portfolio. Generally, assets classes that investors may choose from are stocks (equities), bonds (fixed income), cash, commodities, and real estate.
Keep reading…
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Posted on
Jan 9th, 2015
by author: sraskie.
Posted in: asset allocation, asset class, diversify, fee-only, financial planning, index funds, mutual fund expenses, mutual funds.
Tagged: asset allocation · diversification · fiduciary · financial planning · index funds
If you’re facing the decision of when to file for your Social Security benefit, you’ve probably noticed just how confusing it can all be. There are so many decision-points in the system, it’s no wonder folks are confused. Depending on your point of view and how you count the decision-points, each person facing this decision has thousands of possible combinations to consider as they decide when to pull the trigger and file for benefits.
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 
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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”.