Category: Financial and taxes in retirement
July 30, 2013 -- We were shocked to read recently that 86% of Americans couldn't ace a simple financial IQ test. Fortunately, we are pretty sure that Topretirements members are like the children in Lake Woebegone - you are all certainly above average! This article provides link to that quiz so you can see how well you do on it. We will also provide a recap of 10 commonly held pieces of financial wisdom, along with links to more resources to help get you educated.
Here is where you can take the finra financial literacy quiz. The quiz ask simple questions about how much interest you would earn at different rates, safety of stocks vs mutual bonds, and what happens
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Published on July 30, 2013
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Category: Financial and taxes in retirement
July 9, 2013 -- We had a question from a colleague recently which, while mostly pertinent to the Carolinas, is broadly relevant to many retirees looking for answers to which states are the most tax friendly. Here is the question and our response.
Q: I have a relative who is thinking about retiring to either South or North Carolina. He'll have a pension from Mass. as his largest source of income. Thoughts about which state might be better from a tax perspective?
A: In 2013 South Carolina situation appears slightly more favorable to your relative, if taxation is
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Published on July 9, 2013
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Category: Financial and taxes in retirement
June 18 2013 -- If someone had asked us in 1970 if we would feel comfortable about retiring some day with savings of $1 million - we would have said - YES! But even for the 1 in 12 American families who have that much saved outside of their home equity, a million smackeroos is really not so much to live on in retirement anymore.
According the BLS.gov CPI calculator, $1 million in 1970 is the equivalent of $6,003,737 in 2013. That change explains the inflation side of the problem pretty well. But there are other reasons why the million dollar figure isn’t that great:
- The pathetic amount you can earn on
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Published on June 18, 2013
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Category: Financial and taxes in retirement
June 11, 2013 -- What is the best retirement calculator to help you determine how much money you need for retirement? The short answer is ... just about any good one, because more information leads to better retirement outcomes. The Employee Benefits Retirement Institute (EBRI) recently found that people in the lowest-income quartile who use a retirement calculator can improve the probability that they will not run short of money in retirement by 14.6 to 18.2 percentage points. This article will review a range of some of the better calculators as well as explain why they are useful.
What are online retirement calculators - and how can I find a good one?
Most retirement calculators have
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Published on June 11, 2013
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Category: Financial and taxes in retirement
May 27, 2013 -- Several recent surveys of current and prospective retirees paint a very disturbing picture about retirement in America. The data made us realize that we American workers are kidding ourselves- with potentially dire consequences for our retirements. The studies drew us to come up with 7 dangerous retirement fantasies. Following those we have included the supporting data from the surveys.
The 7 biggest lies that workers tell themselves
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Published on May 27, 2013
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Category: Financial and taxes in retirement
April 30, 2013 -- Note: This is part 2 of our Most Tax Friendly Places for Retirement series. Part 1 was "Finding Your Tax Friendly Place for Retirement".
Let's assume that you are a person looking for a tax-friendly state to retire. You need to start your search by realizing these key facts: your tax situation is going to be different in retirement from what it was during your working days, and because of that some of your current tax assumptions might no longer be valid. Here in Part 2 we will discuss some of the key tax issues that affect retirees, as well as provide a checklist to help organize your thinking.
A Key Change - Different Income
In retirement your income will probably be
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Published on April 30, 2013
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Category: Financial and taxes in retirement
April 29, 2013 - A front page story in yesterday's New York Times spotlighted the newest way for retired Americans to get into serious financial trouble. The story, "Loans Borrowed Against Pensions Squeeze Retirees highlighted the growing trouble in Pension Advances. The idea behind them is that in exchange for an upfront advance (called an advance, but really a loan), you sign over your pension checks far into the future. Cash-strapped and often unwary retirees are increasingly using these loans, but paying interest rates and fees from 27% to as high as 106%.
The article used the experience of Ronald E. Govan as an example. This disabled veteran took out a $10,000
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Published on April 29, 2013
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Category: Financial and taxes in retirement
April 16, 2013 -- Millions of baby boomers have been forced into earlier than intended retirement. Surviving that experience has become a brutal challenge. A study from the Urban Institute, a Washington think tank, found that it took more than nine months for half of those over 50 to find a job. Many have not been able to find a job, and have either given up the search or gotten creative about how to survive on their reduced incomes.
3 Boomers Profiled
The Squared Away Blog from the Center for Retirement Research recently profiled 3 baby boomers who are experiencing the struggle to survive. The profiles will sound familiar to many.
Kevin Milligan, an economics professor at the University of British Columbia, determined that two-thirds or more of jobless Americans between
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Published on April 16, 2013
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Category: Financial and taxes in retirement
Updated Oct. 10, 2020, originally published April 15, 2013 -- For a significant percentage of retirees, finding a tax-friendly location to retire is very important. But, while indeed there are many states and localities that are very tax friendly, making a decision based simply on taxes could lead you to a poor choice. For example, how your personal situation interacts vs. different state scenarios might be surprising. And more importantly, lifestyle and other considerations might be a lot more important to your retirement happiness.
This is Part 1 of a 2 part series: In this article we will explore the various kinds of taxes that might affect you as a retiree; Part 2 is "Finding a Tax Friendly State for Retirement: A Checklist", and it features a helpful checklist for you to evaluate your tax situation vs. states you might be considering for retirement. See also this MarketWatch article on "Tax Friendliest States" for a slightly different perspective.
Major Taxes in Retirement
The major state taxes you need to be concerned about are property taxes, income taxes, sales taxes, estate and inheritance taxes, and how your pensions, IRA distributions, and social security will be taxed. All of these factors
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Published on April 15, 2013
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Category: Financial and taxes in retirement
February 26, 2013 -- If you search on the Internet for "live like a cheapskate" you will strike a frugality bonanza. There are authors like Jeff Yeager who have written best sellers on the subject ("The Cheapskate Next Door"), plus plenty of websites offering their advice. There's even a TLC show, "Extreme Cheapskates". Our friend Robert Powell over at MarketWatch had a particularly helpful article earlier this year, "How to Retire Like a Cheapskate and Live Well". This article will roll up advice from all over into our 15 top tips for living like a cheapskate.
First of all, a little etymology - if you are going to be a cheapskate you might as well understand where the term
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Published on February 26, 2013
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