Retirement Planning

How Taking Social Security at 62 Makes Sense in Some Tax Brackets

Published on: October 9, 2018 | By McCulloch & Miller, PLLC

If you’re living on your retirement savings, while waiting to start taking Social Security benefits to full retirement age or even age 70, you might be costing yourself thousands in taxes.

It’s annoying. There’s no way around it. You’ve worked your whole life, and paid taxes on those earnings. Now you have to pay taxes on your Social Security benefits. However, depending on your asset level, you may want to start getting those benefits earlier, says this article from Kiplinger, “Why Wealthy People May Want to Take Social Security at 62.”

There are many good reasons to wait and take Social Security at full retirement age to get the full benefit amount. In waiting longer to file, the benefit can grow 8% a year from full retirement age to age 70. However, this one-size-fits-all advice may not be appropriate for everyone, especially for the wealthy.

Single Parents Need to Plan and Balance for Financial Stability

Published on: September 27, 2018 | By McCulloch & Miller, PLLC

Without the security of a spouse’s income, single parents must balance their children’s needs with their own retirement savings goals.

Single parents who have to say no to their children over and over again, struggle with wanting to say yes when money is tight and there’s no room in the budget for the latest fashions or games. However, the last thing a single parent wants to do is convey a lack of financial discipline. A financial plan can help a single parent stay on track.

CNBC’s recent article, “Five financial essentials for single parents,” says that when single parents try to satisfy their kids, it can lead to a severe unintended consequence: placing their children ahead of their own retirement needs.

Making Smart Decisions About Your Pension

Published on: August 20, 2018 | By McCulloch & Miller, PLLC

The burden of saving for retirement shifted from employers to employees. It is now unusual for companies to offer pensions. If you’re lucky enough to have one, make your decisions wisely.

It’s hard to imagine today, but years ago, it wasn’t unusual to stay with one company for a lifetime, then retire and collect a generous company-provided pension that lasted as long as you lived.

Investopedia’s recent article, “Choosing How and When to Receive Pension Benefits,” reminds us that times have changed. Pensions have been replaced in large part by 401(k)s or other employer-sponsored savings plans. Those fortunate enough to still have a pension, will make it a large part of their retirement plan. If you have a pension, you’ll have to make some decisions, when you are ready to retire.

Here’s Where NOT to Retire

Published on: August 7, 2018 | By McCulloch & Miller, PLLC

If taxes and cost of living are important factors for you, here’s a look at states where you should only retire with a good reason, like family ties.

You’ve read plenty of surveys about the best places to retire, but have you ever looked at the worst ones? Think Advisor took a new twist on a new survey by Bankrate.com, in its article “12 Worst States for Retirement: 2018.”

The least desirable states for retirement typically had poor ratings in the categories for cost of living and taxes and were also weighed down by low scores in other categories. Bankrate.com created its rankings by looking at seven categories of interest to retirees and weighted those rankings based on the importance given to them by respondents to the firm’s 2017 survey. The categories were:

Teach Your Children Early About Retirement Planning

Published on: July 17, 2018 | By McCulloch & Miller, PLLC

Most young adults are not thinking about retirement when they get their first jobs, but starting early, even if on a very small scale, can make a big difference.

When you are working to pay off student loans and trying to save enough to get a place of your own, retirement takes a backseat, says The Milwaukee Community Journal, “How parents can help their kids with retirement.” About 66% of millennials haven’t set aside any money for retirement, according to a report from the National Institute on Retirement Security. However, parents can counsel their young adult children on how and why to start a retirement plan now, before it gets to be an issue. Many workers early in their careers think retirement isn’t worth considering because it’s so far off, and they have other obligations. But getting a late start is a big mistake, because they’re missing out on years of compounding returns.

Here are five tips parents can give their young adult children to help them to begin planning for retirement:

Are You Sure You’re Ready for Retirement?

Published on: May 14, 2018 | By McCulloch & Miller, PLLC

Use this checklist to be certain that you and your finances are properly prepared for retirement.

According to The Center for Retirement Research at Boston College, 20% of Americans are wrong about when they’ll be able to retire. That also means that 80% have it right—which group do you belong to? To make sure you are in the right group, take a look at this checklist from The Street, “8 Essential Steps to Achieve Retirement Success.”

Determine and Test Your Retirement Budget. Do a dry run of your future retirement lifestyle for six months before your intended retirement date. This will help you get a better understanding of how you can follow your retirement budget.

50 or Older? Here are a Few Retirement Questions for You

Published on: May 8, 2018 | By McCulloch & Miller, PLLC

You don’t need to create a spreadsheet or write a book-length plan, but anyone in their 50s, who wants to have a successful retirement, is advised to start getting their thoughts organized.

Research shows that people who have more specific ideas of how they want to spend this part of their life, end up being more satisfied that those who just wing it. We think that’s because those who create a plan have also devoted some time and energy to considering what retirement means to them, what issues they may face and what is meaningful to them.

Forbes recent article, “5 Key Retirement Questions You Need To Answer When You're 50 Or Older,” boils it all down to a few key ideas.

What’s on the Mind of Gen-Xers: Not Retirement Planning

Published on: April 26, 2018 | By McCulloch & Miller, PLLC

A survey found that Gen Xers are less concerned about retirement planning than they are about other financial challenges.

Don’t forget that group that’s between the headline grabbing millennials and boomers: Generation Xers, Americans between ages 36-55. A survey from the IRA (Insured Retirement Institute) appears to have uncovered a significant knowledge gap in this group when it comes to personal finance.

Think Advisor’s recent article, “These 3 Threats Scare Gen Xers More Than Basic Retirement Costs: IRI” explains that the survey aimed to find out how Gen Xers are handling retirement planning. The analysts who summarized Gen Xers’ approach to retirement planning said “They’re (mostly) doing it wrong.”

Lucky Enough to Have an Employer Match?

Published on: March 12, 2018 | By McCulloch & Miller, PLLC

You’d think no one would want to turn down free money. Yet that’s exactly what many working Americans do!

One out of five Americans—20%—don’t take advantage of a terrific benefit: employee sponsored retirement savings accounts that include an employer match of some and sometimes all the employee’s contributions. Most workers do contribute more than enough to enjoy the benefits of their employer’s match, but what’s up with those 20%?

USA Today recently ran an article, “1 in 5 Americans are making a terrible 401(k) mistake” that says this may be one of the worst retirement mistakes you can make. While it may not look like a lot of money to ignore right now, you’d be surprised at the difference it can make when you retire.

Military Retirement Planning and The Big Decision in 2018

Published on: December 11, 2017 | By McCulloch & Miller, PLLC

For those who joined the military in recent years, a big decision is looming for their future. They have to make a choice next year between staying in the old retirement system or opting for the new one.

Figuring out whether or not to stay with the current military retirement system or choosing to join the new system may be a challenge, but you have an entire year to educate yourself as to which one is best suited for you and your family.

Kiplinger’s recent article, “The Big Pension Decision Military Service Members Must Make in 2018,” explains that if you joined the military from 2006 through 2017, then you have from January 1 to December 31, 2018, to decide whether to switch to the new “blended retirement system.”