Published: January 23, 2016

More people are asking why people retire and how they enjoy it. One article reports that people in their 80’s who were surveyed said: when you retire is determined by how much you’ve saved. The same survey says that retirees found the first few years of retirement the happiest of their lives. But another survey says people pick a date when they want to retire, and do so regardless of how much money they have saved. The more likely view, in general, is that people decide when they want to retire and mold their retirement lifestyle to what they can do with what they have accumulated.

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Published: December 24, 2015

For some people, it’s abundantly clear that setting up a Roth IRA, where you get no tax deduction for the contribution but have no taxable income when amounts are distributed, makes perfect sense. People just starting out on their working careers, who might be in a very low tax bracket, are probably better off using the Roth IRA because the tax savings from a traditional IRA deduction don’t help very much.

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Published: December 21, 2015

President Obama has signed the Protecting Americans from Tax Hikes (PATH) Act, which makes permanent several provisions that were previously enacted year to year; which made any kind of careful tax planning very difficult. One provision that was revived and made permanent is the IRA charitable rollover provision. This provision permits individuals who have reached age 70 1/2 to make a direct transfer from their IRAs to certain kinds of charities (excluding donor advised funds, supporting organizations and private foundations). There is a $100,000 annual limit on such transfers.

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Published: October 29, 2015

A recent article reminds us of a scam that is still being tried: telephone callers saying they are from the IRS and demanding immediate payment to avoid arrest and imprisonment. If you won’t pay on the spot, your Social Security number is demanded. But, as the IRS frequently tells us, they don’t call people on the telephone demanding payment. So it’s a scam and you should hang up. Similar ploys involve school loan payments, and nearly all of them want your identifying numbers so they can be stolen. Never give out Social Security or bank account numbers to people who call you.

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Published: October 29, 2015

The House of Representatives just passed a two year budget deal to avoid a default by the Treasury. Next stop will be the Senate. One provision of this deal is a change in Social Security rules. Specifically, the ability to use the file and suspend method to get extra benefits will be curtailed. This is a valuable benefit, and it will still be available to people of a certain age.

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Published: October 21, 2015

Some other publication has just come out with its list of the top 10 places in the country for retirement, based on criteria such as availability of health care, activities for seniors, climate, etc. I believe all 10 were fairly small towns in less populated areas. There are magazines as well that focus solely on where retirees should go. OK, it’s an idea, but it’s not ideal for everyone. One of my colleagues just mentioned a reason to stay where you are: having children nearby. These decisions should be based on the individual’s own interests.

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Published: October 21, 2015

I saw a discussion online today about trying to measure retirement income readiness. There was discussion of Black Rock’s CORI retirement index, which tells you how many dollars you need to save to produce a dollar of income at retirement. It’s a helpful number to know, even if it’s possibly a depressing one. Of course, knowing whether you have saved enough for retirement starts with knowing how much income you need in retirement, which is a process in itself: how much income for a basic retirement or a more “robust” one.

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Published: October 21, 2015

An online report about retirement issues included the statement from one participant that 401(k) plans and IRAs were the worst ideas ever. Why? Because they are voluntary and it’s easy to put off contributing to them. The result, obviously, is too little saved for retirement. In an earlier era, which featured more defined benefit pension plans, employees were often, in effect, forced to save for retirement, which was in the form of a monthly check at retirement.

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Published: September 26, 2015

For many people who reach the customary retirement age of 65, it’s not time to sit on the porch in a rocking chair. Because of advances in health care and greater attention to developing good habits, people at 65 are physically and mentally able to do more. Call it the second season or whatever, there is a desire to remain active. It could be a second career or something related to the prior career. Or it could be charitable work or greater attention to a hobby. Studies, as well as common sense, prove that staying active is a key to a longer and more satisfying retirement.

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Published: September 26, 2015

Numerous articles discuss the ongoing march of baby boomers to retirement, and part of that process involves succession planning for businesses. There are several steps to the planning process, and the process itself should begin at least 3-5 years before the planned sale and its aftermath. No business should be sold or transferred to family members until there has been detailed estate and tax planning, and some of that should take place years before the event.

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