Preparing for Retirement Checklist: Doing the Math!

Which leads us to the big reveal- will we have enough money to live the life we intend?

In the past few installments of this blog, we’ve been exploring the idea of a checklist of critical tasks to accomplish 5 to 10 years before retirement.  I’ve been using the analogy of the checklist an airline crew uses in preparing their aircraft for landing during the last few minutes of the flight.   In last month’s article, we considered the need to create an intentional and detailed vision of the unique retirement we want to experience.  So let’s assume you were successful and have your vision firmly in mind- now what? Well, this leads us to a natural and logical next step which is to determine if our vision is financially sustainable.  This is the part where we calculate the future cost of our dream retirement and make sure that it can be supported by our financial resources.    Back in the day, this type of calculation required some “spread-sheeting” wizardry given...

Read More

Important Tax Return Reminders

Important Tax Return Reminders for the upcoming deadline

With all that has happened in 2020 you may ask if there anything you need to be aware of when filing your taxes for 2020? Is there anything that might be different? The short answer is yes. There are a few items that retirees should be reminded when filing. 1) An IRS extended deadline 2) waived 2020 RMD’s 3) Charitable donation write offs 4) and stimulus checks. Extended Deadline Due to the ongoing pandemic, the IRS has made the decision to extend the 2020 individual tax filing deadline. The deadline is now May 17th 2021. Individuals can also delay federal income tax payments till May 17th 2021 for the 2020 tax year without penalty or interest. The same is true for the NYS tax return. Most other states have matched the federal filing deadline, but if you do not live in NYS, you can use the link here to check with your state tax agency. Waived Required...

Read More

Tax Lot Optimization: Why It Matters To Investors

One of the many ways we help people save money on taxes is by using a strategy called Tax Lot Optimization or TLO. Tax Lot Optimization is a strategy in which shares are sold in a thoughtful way to reduce or eliminate capital gains when trading in a non-retirement investment account. Investors can save hundreds, if not thousands, of dollars in the short term when this strategy is used. To get more granular, Tax Lot Optimization is utilized when someone has multiple share lots of the same stock/fund purchased on different dates. For a retiree, this is a very common scenario. For example, if an investor bought shares of a S&P 500 index fund over a period of 30 years, they would have many different purchases dates as well as a different cost basis for each lot of shares. If these shares are held in a taxable account, the investor can...

Read More

File Your 2020 Tax Return Now Or Later? Why It Matters This Year

It may pay to file your tax return early this year as new laws could impact your payout

The Senate and the House are currently working their way through approving another round of stimulus to help keep people and businesses afloat during the pandemic.  Like previous rounds, it is expected to include stimulus checks paid to individuals and families. This would include $1,400 per individual, plus children and adult dependents qualify this time as well. You must have income below $75,000 if you are a single filer or income below $150,000 if you file jointly with your spouse to get the full stimulus payment. In past packages, the stimulus payment would phase out completely for a single filer who earned more than $100,000 or a married couple who earned more than $200,000.  It was recently announced that the new package may have the phase out happen much faster, with single filers being completely phased out once they earn more than $80,000 and married couples phasing out once they earn more...

Read More

What’s the Break-Even on Delaying Social Security?

Social Security benefits can vary greatly

Throughout our working life we become accustomed to seeing chunks of our paycheck withheld for different types of taxes. Not many of us get a warm fuzzy feeling about contributing our share of payroll taxes to the government for Medicare and Social Security. Fortunately, the government gives you back the money in the form of monthly payments for the rest of your life and possibly your spouse’s life as well. As you approach the age range when you can finally claim social security, between age 62 and 70, it becomes imperative you consider the best strategy for your situation. As you delay claiming your benefit, the government significantly increases your benefit each year. In fact, every year you delay after full retirement age, you receive a guaranteed 8% increase in your benefit (this stops after you reach age 70). Try finding a guaranteed 8% return anywhere else! While there are many factors...

Read More