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Social Security Is a Lifesaver for Many Women

Posted on April 25, 2017 by - Social Security Benefits

How do Women collect Social Security?

Social Security a Women Lifesaver

Social Security is a retirement, disability and life insurance program and if you’re a Woman, this can be a lifesaver in retirement. It’s not that women are more interested in a financially secure old age than men. Americans of both sexes rely on Social Security for critical support in their retirement years, but for a variety of reasons, it’s often women who depend on it the most.

  • Longer lives – Women, on average, live longer than men. Without sufficient private retirement savings, this longevity can result in Social Security being the sole or majority source of income. The potential of running out of retirement savings is a problem that affects many retirees, but because of their longer life expectancy, more women end up counting on Social Security alone to support them.
  • Smaller paychecks – Sadly women on average don’t earn as much as men. They often work in fields that are lower-paid than those where men predominate, and even in the same job women frequently earn less than a man does in the same position. Fair? Maybe not, but it’s a fact. That makes it harder to save for retirement and reduces pension benefits, where they exist. As a result, Social Security often forms a greater part of women’s retirement income than men’s.
  • Fewer working years – Between raising children and caring for aging parents, women often take years out of their careers that men do not. While some men do choose to stay home with children or serve as caregivers for parents, it is far more likely that a woman will do so, statistically speaking. Since the formula that determines Social Security benefits is biased toward lower-earning workers, women get some protection from the hit they would otherwise take from a shorter work history.
  • Less other retirement income – Men are more likely than women to have pensions through their jobs, and to have larger pensions than the women who do qualify (partly because of women’s shorter work histories and lower wages). Without this additional income in retirement, women tend to be more dependent on the benefits they receive from Social Security than men are.

Social Security shouldn’t be your only plan for retirement income, but whether or not it is supplemented by private savings, if you’re a woman, it’s a critical component. Having a plan with your spouse before taking benefits can make a huge difference in how much money is available in retirement. Sign up today to have your own customized Social Security plan www.socialsecuritybp.com or info@socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Common Retirement Fears

Posted on April 4, 2017 by - Retirement fears

Do you have fear around retirement? A startling number of Americans do, so don’t feel silly if thinking about the whole idea of retirement just makes you want to shut down.

The very common response of fear and anxiety when thinking about retirement stems from several sources. Getting older itself is anxiety-provoking for most of us. We want to stay young and healthy forever, and it can be unsettling to admit that this isn’t how our lives are going to work.

But beyond the basic discomfort with aging, there’s often a more specific fear around the idea of retirement. That fear frequently leads even highly intelligent people to push away the thoughts and ignore the issue. It’s a natural response, but an unfortunate one because avoiding the issue is precisely the action that is most likely to lead to a negative experience at retirement.

If you do make yourself examine your fears around retirement, you’ll probably find that they center on four questions that many people share:

• Will Social Security even be there when I retire? This is a reasonable fear, given that so many politicians try to inspire panic about the program’s future. But Social Security has been around a long time and it probably isn’t going anywhere. True, the funding formula and/or benefits will need to be adjusted at some point, but the situation is nowhere near as dire as some make it sound. You’ve been paying into Social Security for many years and it will almost certainly pay you back in your retirement years. Don’t depend on the program as your only income in retirement, but don’t worry too much about it either. Social Security is going to be there.

• What if I didn’t save enough? This question is another valid concern. Most people don’t save enough to provide the same income they had when they were working. Since we’re living longer now, it’s more important than ever to build your retirement savings. You know this, so don’t waste time in fear of the future; save for it instead. Talking with a retirement planner can help you understand just how much you’ll need to save each month so that you will have enough funds to live comfortably for many years after retirement. This is one area where ignoring the problem will only make it worse, so face your fear and talk with your financial advisor. Taking action feels good, and you’ll thank yourself later.

• Will I be bored and lonely not working? As our parents age, we sometimes seem them struggle with these issues. It’s natural to wonder if you’ll face the same problems. Retirement can be a lonely time or a wonderful period to pursue old and new interests, relish relationships with all kinds of people and thoroughly enjoy yourself. To ensure your experience is positive, it’s important to prepare yourself for the changes. Remember, you don’t have to retire all at once. You can work less over gradually in many cases, while also strengthening your social networks and engaging in interests that you didn’t have time for when you were working full time. Make friends and hobbies a priority now, and you’ll be thrilled to have more hours to enjoy them when you retire.

• What about health care costs? The rising costs of health care inspire fear in most people, whether they’re working or retired. Save for retirement expenses, including health care, but don’t let the fear paralyze you. Medicare is one of the most generous health insurance programs available, and you’ll qualify for it by the time you retire, most likely. Also keep in mind that the healthcare landscape is changing, and costs may not be as high as you fear when you actually retire.

Retirement fears are real and reasonable. Taking an active stance as you prepare for your retirement and examine the reasons for your anxiety will go far toward alleviating those fears. It will also reduce the risk of those fears coming true, so don’t play ostrich any more. Look forward to retirement with your eyes wide open, and take advantage of your current opportunities to ensure a positive experience later.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #7: Is Retirement Income Taxable?

Posted on March 27, 2017 by - Retirement Benefits, Social Security Myths

MYTH: Your benefits are not taxable in retirement.

Surprise! If you continue to have earned income in retirement while receiving Social Security, then part of your Social Security income can be included in your taxable income. That’s not to say that everyone pays taxes on Social Security
benefits or that the full amount is taxable, but it’s important to know that some of your benefits may be taxed. About half of all beneficiaries paid federal tax on Social Security in 2015.

To figure out whether your benefits are taxable or not, you’ll need to understand the IRS’ definition of “combined income.” This means your adjusted gross income plus any nontaxable income you receive, added to one half of your Social Security benefits. The total of these three numbers will determine whether your benefits are taxed, and how much.

If you are single and have a combined income of  $25k to $34k you’ll owe taxes on up to 50% of your Social Security benefit. Couples that earn between $32K and $44K a year and file jointly will owe the same rate if their combined income is between $32k and $44k.

For single filers with combined incomes over $34k and married filers whose combined income exceeds $44k, the portion of benefits that may be taxable is 85%. That’s assuming the married couple files taxes jointly. Filing a separate return makes it far more likely that your benefits will be taxable.

You may also pay state taxes on part of your benefits if you live in Minnesota, North Dakota, Vermont and West Virginia; these states mirror the federal tax schedule. The following nine states may also tax a portion of Social Security but provide exemptions based on income and age: Montana, Colorado, New Mexico, Utah, Nebraska, Kansas, Missouri, Connecticut and Rhode Island. The remaining 37 states not listed above do not tax Social Security.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Are You Part of the Sandwich Generation?

Posted on March 9, 2017 by - Retirement Benefits, Retirement fears, Social Security Benefits, Uncategorized

Many Americans today are part of what is known as the sandwich generation. No, that doesn’t mean covered in peanut butter or surrounded by lettuce and tomatoes. It refers to being economically sandwiched by two other generations, one older and one younger, that rely on you for financial support.

Providing emotional support for parents and children is part and parcel of being human. It’s both demanding and rewarding, but also creates some fear for the future. Providing financial support for these loved ones while taking care of yourself and your own future, however, can be tough. For many, it seems like an inescapable burden, and fulfilling it can leave you unable to provide sufficient resources to meet your own needs.

If you’re still funding your adult kids’ lifestyles and struggling to take good care of your parents’ financial needs at the same time, you might want to consider whether it’s the best strategy. Despite the desire to provide everything you can for your family, this financial sandwich can leave you in a bad situation a few years down the road.

  • Your kids have their whole life to pay back college and other debts. It feels good to provide your children with a debt-free college education and help with a car, house or other steps toward the good life. But can you afford it? Ignoring your financial future so you can give them the best start isn’t in anyone’s best interest. If you can’t support yourself in retirement, they’ll feel duty-bound to help. It’s often better to let them take out loans to accomplish their goals, while you save for your retirement years. That leaves you better prepared to take care of your own future needs while helping them realize the true costs of their choices and value them appropriately.
  • Learn from your parents and save more toward retirement. The financial sandwich you’re in now should illustrate the importance of saving for retirement. It’s more expensive than most people expect, between rising healthcare costs, inflation and longer lifespans. You’re seeing that first-hand with your parents; learn the lessons that their predicament illustrates and get serious about saving now, so you won’t be in the same one later.
  • You cannot take out loans for retirement. While it’s relatively easy to get a loan for a college education, house or car, just try asking for one to pay for retirement expenses. Lenders will laugh at you! Once you’re past working age, it’s virtually impossible to get a loan unless you can prove you have the resources to pay it back. That’s not a situation that inspires confidence for older Americans who need extra income just to get by, so let the kids get a loan now. It’s far easier to obtain and pay back than the one you’ll need if you don’t save enough for your retirement.

What’s the takeaway? Giving your retirement savings short shrift so you can keep paying for the generational sandwich isn’t wise. If you don’t have enough saved, it’s helpful to do what you can to maximize your Social Security income. But in the big picture, it’s probably more important to save for your own retirement than to fully fund your children’s college and post-college years.

Not associated with or endorsed by the Social Security Administration or any other government agency.