Financial Planning Strategies For Seniors
Financial Strategies for Seniors
Financial Strategies for Seniors can show you how to reduce or eliminate taxes on Social Security benefits. When Franklin D Roosevelt first introduced Social Security back in 1935 he was constantly asked if Social Security benefits would ever be taxed. His answer was “NO!” What happened? FDR died and the promise died with him. In 1982 Congress passed a bill call the Omnibus Budget and Reconciliation Act which allowed congress to tax 50% of the Social Security benefits of an individual earning over $25,000 per year or a married couple earning over $32,000 per year. That worked so well that in 1992 Congress added another layer of taxes increasing the amount of Social Security benefits to be taxed to 85% for individuals earning over $28,000 and married couples earning over $44,000. How can you tell if Social Security benefits are being taxed? Look on IRS form 1040, line 17a and see what amount is taxed. Line 17b indicates the dollar amount in tax you paid on your Social Security benefit. Has your advisor caught this on your 1040? If not you are paying more taxes than you should be.
Your CD’s and Treasury Bonds are not paying you much and the market is too risky? As a senior you have worked hard all your life since you were 20 years old. The time to invest was when you were age 20 all the way up to age 60. You have seen the market surge and plunge over the years. The thought of a market plunge at this stage in your life would certainly make you lose some sleep. Could your investments come back? I do not have a time span to regain what I have
lost. I must start living on my savings but I only have 50 or 60% of what I had before the market bottomed out. You put your money in something “safe” like a Certificate of Deposit or a Treasury bond but only making 1 or 2% is not appealing. Is there an alternative? YES! How about a return that has a guaranteed minimum of 2% but yet can earn as high as 10% that is guaranteed never to lose your principle and it is safer than a CD?
Want to have access into a Nursing Home without Long Term Care or spending down all of your assets? Many seniors find themselves without Long Term Care that covers them in the event they need a nursing home because they do not qualify due to underwriting or for some reason never purchased coverage. What happens if and when you, your doctor and your family agree that you need more care, treatment and assistance than the family is able to give? What now? A nursing home costs on average from $60-85,000. You have some assets but your stay at home spouse has nothing to live on if the assets go to the nursing home. Hope is not lost. There is a way to have your assets go to your spouse rather than to the nursing home. Want some information?
Would you like to double or triple the amount of your IRA that you intend to leave to your heirs? If you have 4 children and you would like to leave them $25,000 each you will find that you have another heir…Uncle Sam! How will this work? At the death of the 2nd spouse your IRA is distributed to your 4 children. Taxes will be incurred on each child’s income tax bracket. If each child is taxed on the distribution at 30% each child would receive $17,500 and Uncle Sam would receive $30,000. Is this what you intended? If properly set up your children could receive as much as $50,000 to well over $100,000 after taxes.
