Archive - July 2019

1
Deciding When to Claim Social Security Isn’t a Guessing Game
2
Inherited 401k plan
3
Financial planning for college: should you bother saving?
4
Spending on Little Luxuries Can Add Up…to More Happiness
5
The Earnings Test is Specific to the Individual

Deciding When to Claim Social Security Isn’t a Guessing Game

The summation of a Bloomberg article that states that many Americans opt to receive Social Security benefits at the wrong time may be confusing: “Most retirees should wait longer to access their benefits, researchers find. Some should claim them sooner.”

Why does this advice seem to be contradictory? Because there is no one rule for claiming Social Security. It really depends on you and your situation.

You cannot guarantee you’ll live to 100 and beyond but if you have clear evidence that you may not live well into old age, perhaps you shouldn’t wait. If you are healthy …

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Inherited 401k plan

An inherited 401k plan isn’t necessarily a different kind of retirement plan from a regular 401k plan in the hands of the original participant. However, the rules around an inherited 401k plan are unusual enough to warrant their own review.

When an individual inherits a 401k plan, generally this individual must begin taking minimum distributions from the plan, on a preset schedule. There are a few things to consider, the first of which is whether the beneficiary is the spouse of the original owner, or another person (non-spouse).

If the beneficiary is a spouse, special options are available for handling …

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Financial planning for college: should you bother saving?

Nobody wants to pay for something, then watch someone less deserving who gets it for free. A dear friend recently raised this situation: are you a sucker for saving, while somebody else spends freely and their kid gets more money from a college?

I’ll give a very qualified yes to this—there are a few situations where it doesn’t pay (very much, at least) to save for college. Let’s say you make under $75,000 a year and have no investments beyond retirement accounts. Your family probably will qualify for some serious financial aid, and would get less if you saved into …

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Spending on Little Luxuries Can Add Up…to More Happiness

In “The Personal Finance Industry is a Scam,” a writer for GQ discusses her thoughts on why “Suze Orman’s rant against coffee is the latest in cable-news advice that puts the blame for an increasingly unequal financial system on individuals.”

The writer recalled meeting Orman years earlier as an unpaid intern saddled with heavy law school debt. Orman told her not to worry about the student loan did since it didn’t affect her credit score. The writer found this advice to be disappointing, as she was hoping to hear something that would help her get on firmer financial footing. …

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The Earnings Test is Specific to the Individual

This topic comes from a reader, J., who asks the following question:

My wife is 62 and she works a part-time job earning around $23k per year. She is planning to retire in June, and so her total earnings for the year will be approximately $11,500. She would like to begin taking Social Security benefits right after her retirement.

The question is this:  will her earnings test be based upon her “individual” earnings, or on the higher combined earnings of the two of us (I am still working, earning in excess of the earnings test amount)? Since her earnings of

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