Social Security

Obtaining Social Security Benefits for Ex-Spouses in Texas

Published on: August 18, 2021 | By McCulloch & Miller, PLLC

There is often a lot of confusion about Social Security benefits, particularly obtaining benefits based on a family member’s work history. While it may be complicated, Texans are able to obtain Social Security benefits from their ex-spouses. Every case is different, but there are general requirements a person must meet in order to qualify for their ex-spouse’s Social Security benefits. Below are explanations that can help a Texan begin the Social Security process, along with important qualifications to keep in mind.

What Are Social Security Benefits?

Social Security benefits are given to qualified retirees, along with their spouses, children, and survivors. Social Security benefits are based on a person’s lifetime earnings—therefore, people who earned more over their working years will receive more in benefits after their retirement. This is why spouses—or even ex-spouses—who earned less income may try to qualify for their partner’s benefits instead.

How Does Life Insurance Factor into Estate Planning?

Published on: January 27, 2020 | By McCulloch & Miller, PLLC

Some people think once the children are all grown up, with spouses and children of their own, that they don’t need life insurance. However, it can play a valuable role in protecting the family and transferring wealth.

With estate tax exclusions at levels that make them a non-issue for most Americans, the practice of purchasing second-to-die life insurance policies to prepare for estate tax costs has faded.

However, IRAs, 401(k)s, and other accounts are still 100% taxable to the individuals, spouses and their children. The stretch IRA options still exist, but they may go away, as Congress may limit stretch IRAs to a maximum of 10 years.

I’m Between 55 and 64, How Do I Boost My Retirement Savings?

Published on: January 2, 2020 | By McCulloch & Miller, PLLC

“If you're between 55 and 64, you still have time to boost your retirement savings. Whether you plan to retire early, late, or never ever, having an adequate amount of money saved can make all the difference, both financially and psychologically. Your focus should be on building out—or catching up, if necessary.”

It’s never too soon to begin saving. However, the last decade prior to retirement can be crucial. By then you’ll probably have a pretty good idea of when (or if) you want to retire and, even more important, still have some time to make changes, if need be.

If you discover that you need to put more money away, Investopedia’s article “Top Retirement Savings Tips for 55-to-64-Year-Olds” gives you several time-honored retirement savings tips to consider.

Why Would Social Security Tax Children’s Benefits?

Published on: December 2, 2019 | By McCulloch & Miller, PLLC

Benefits for Social Security survivor children’s benefits are generally made out to a parent or guardian. They are taxable income, but most children do not have enough income to owe taxes on the benefits.

According to a recent article “Are Social Security survivor benefits for children considered taxable income?” from Investopedia, the only way the benefits would be taxed if half of the child's benefits in a year, plus other income earned by the child in that year, reached the level that required a tax return to be filed and for taxes to be paid.

If half of the annual benefits plus the child's other income is greater than a base amount set by the IRS, then a portion of the benefits is taxable.

Planning for Medical Expenses During Retirement

Published on: November 18, 2019 | By McCulloch & Miller, PLLC

The unknown about spending in retirement is not just whether it will be higher or lower, but when during the course of retirement, you’ll be spending more or less. If you downsize, housing costs will decrease, but if you travel more, recreational spending will rise.

According to a recent article from Investopedia, “How to Plan for Medical Expenses in Retirement,” healthcare is likely to be the biggest expense in retirement. A survey from Fidelity Investments found that a 65-year-old newly retired couple should budget about $285,000 for medical expenses in retirement. It is better to have the money set aside than to be surprised by the cost. That number also does not include long-term care. Depending on where you live, those costs can range from $18,720 for adult day care services to $100,375 for a private room in a nursing home.

Despite saving and preparing for retirement their entire lives, many retirees aren't mentally or financially prepared for these types of expenses. A survey by HSA Bank found that 67% of adults 65 and older thought that they’d need less than $100,000 for healthcare. However, Fidelity calculated that males 65 and older will need $133,000—and females, $147,000—to pay for healthcare in retirement.

How You Can Make the Most of Social Security

Published on: October 2, 2019 | By McCulloch & Miller, PLLC

Just because you can take Social Security at age 62, doesn’t mean you should. Taking it earlier means that your monthly benefits will be reduced. The longer you can wait, ideally until age 70, the better.

Applying for Social Security benefits is a pretty simple process, according to Investopedia’s recent article, “When To Apply For Social Security Retirement Benefits.” The earliest you can apply is when you are 61 plus nine months, or four months before benefits are scheduled to begin. Your first Social Security payment will occur four months later, which is going to be the month after you celebrate your 62^nd birthday. After that, benefit payments arrive after every full month that you are eligible, if you apply as soon as you are eligible.

Applications can be submitted either online, over the phone, or in person at your local Social Security office. A very convenient way to apply is online at the Social Security Administration website. The application itself takes about 15 minutes and can be saved at any point for future completion. This application can also be used to apply for Medicare.

Can I Do Anything About 401(k) Taxes?

Published on: September 17, 2019 | By McCulloch & Miller, PLLC

After years of enjoying the deductions for putting money into retirement accounts, it’s always an unpleasant stunner when people realize they have to pay taxes on their withdrawals. Or do they?

Converting a 401(k) to a Roth IRA or Roth 401(k) will eliminate the need to pay taxes on withdrawals, says Investopedia’s recent article, “How to Minimize Taxes on 401(k) Withdrawals.” However, you have to follow the rules for a qualified distribution. Make no mistake: you’ll also have to pay taxes on any funds that are converted.

The primary issue with converting your traditional 401(k) to a Roth IRA or Roth 401(k) is the income tax on the money you withdraw. If you’re near pulling out the money anyway, it may not be worth the cost of converting it. The more money you convert, the more taxes you’ll owe.

How Does the Social Security Disability Benefit Process Work?

Published on: September 11, 2019 | By McCulloch & Miller, PLLC

Social Security disability benefits are based on average lifetime earnings. How severe the disability is, or what the household income is, has nothing to do with the amount of money that will be paid.

If you have your annual Social Security statement, you can see what you’ll probably get in the Estimated Benefits section. However, this is an estimate and not a final number. The total amount a disabled worker and his or her family can receive is roughly 150% to 180% of the disabled worker's benefit. Eligible family members can include a spouse, divorced spouse, children, a disabled child and/or an adult child disabled prior to age 22.

The estimated Social Security disability benefit amount for a disabled worker receiving Social Security Disability Insurance (SSDI) in January 2019 is $1,234 per month. However, a beneficiary can receive either less than this or up to $2,861, according the article “What are the maximum Social Security disability benefits?” from Investopedia.

How Will I Know When I Can Afford to Retire?

Published on: March 11, 2019 | By McCulloch & Miller, PLLC

The period before retirement is a time when people dream about what the future might hold. They also worry, because who hasn’t heard the stories about retirees who return to work because they retired too early?

It’s no surprise then that little more than half of Americans surveyed by the Transamerica Center for Retirement Studies say their biggest concern about retirement is outliving their money. The nature of retirement, when we start taking money out of those retirement accounts, after a lifetime of putting money into the accounts, seems a little scary.

Here are the key indicators that you’re probably ready to retire, according to this recent article from Investopedia’s, “6 Signs That You Are OK to Retire.”

Countdown to Retirement with Three Simple Questions

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

To help plan for retirement, it helps to move from asking global questions, like “Can I afford to retire?” to more specific questions, like “What’s my monthly cost of living right now?”

Sometimes retirement planning is so overwhelming that people just shrug their shoulders and hope that things work out. That’s a terrible way to plan for the last two or even three decades of your life. Plus, says Motley Fool in a recent article titled “Don't Even Think About Retiring Until You Can Answer These 3 Questions,” if you can’t answer three basic questions, maybe you’re not ready to start thinking about retirement.

Can you believe that just 38% of Americans say they have a long-term financial plan, according to a recent survey? Let’s look at three important planning questions.