Mary Beth Franklin, who writes extensively on issues involving social security, has published the below article on the benefits of filing for social security benefits online instead of calling or going to a physical office.
With so many couples using strategies like File & Suspend, it is a great article to read if you are going to file online. One great tip for those choosing a File & Suspend approach is that you complete the online application stating that you want benefits to begin at Full Retirement Age, then in the remarks section you need to make it clear that you would like to suspend those benefits until a later time.
Take a look at the link HERE for some other helpful hints.
Single Point of View is our way to occasionally share planning ideas relating to personal finance. Our goal is to pass along concepts that you may not be exposed to on a daily basis.
August 26, 2015
August 5, 2015
Should Kid's Have To Do Chores For Their Allowance?
This is just one of many questions raised and explored around the subject of teaching kids about money in Ron Lieber's book "The Opposite of Spoiled". The book visits with parents around the country to discuss ways to help kids learn about money, and help parents learn how to talk to their kids about money. Too often, the first time we truly learn about money is at a time when we are making real financial decisions that could impact us the rest of our lives. "The Opposite of Spoiled" provides stories of how some families are handling the conversation and trying to raise children with good values.
You won't agree with each family's approach, however, I am sure there are at least a few examples you will be able to relate to and implement within your own family. We are planning to start with the separate piggy bank jars for "Save" "Spend" and "Give" in our house.
If you want to read a much better overview of the book than I could write, check out this blog post from Michael Kitces who does a great job writing the cliff notes.
How To Raise Children To Be The Opposite Of Spoiled – Using Money To Teach Values
PS. The answer to the question posed in the post seems to be no, that it is better not to tie an allowance to chores. Chores are something that everyone needs to chip in on. I'll let you read the book to dig into it deeper.
You won't agree with each family's approach, however, I am sure there are at least a few examples you will be able to relate to and implement within your own family. We are planning to start with the separate piggy bank jars for "Save" "Spend" and "Give" in our house.
If you want to read a much better overview of the book than I could write, check out this blog post from Michael Kitces who does a great job writing the cliff notes.
How To Raise Children To Be The Opposite Of Spoiled – Using Money To Teach Values
PS. The answer to the question posed in the post seems to be no, that it is better not to tie an allowance to chores. Chores are something that everyone needs to chip in on. I'll let you read the book to dig into it deeper.
July 20, 2015
Save On Your Electric Bill: Summer Update
It may be due to the heat we have had the last couple weeks or just the fact that many folks have been finally able to work on their personal "to-do" lists. Regardless of the reason, questions about switching electric suppliers have resurfaced in conversations.
Keep in mind that if you are in the middle of a "fixed rate" contract with your current supplier and you change suppliers, your current (and soon to be former provider) may back charge you for a higher rate (the difference you would have paid if you were on a "variable rate" contract). This does not mean that you should not change, it just means you need to do the math and buyer beware.
For more information, see our previous blog from February
July 15, 2015
Investment Update
The impact of our behavior on financial decisions is
something that is getting more and more needed attention in the financial
planning industry. As volatility has picked up in the investment markets
in recent days we thought it was a good time to re-address the philosophy we
implement.
As we stated in a previous
post, borrowing
a line from a colleague: the “markets” tend to take the stairs up, and the
elevator down. Knowing this, and being prepared for how it will impact
your investments, will help us all make better decisions when the elevator
doors open.
During the past 5 years we have seen the U.S. stock markets
follow the stairs up. During this time we have continuously rebalanced
your portfolios to ensure you are not taking on too much risk. I am sure
you have heard Tim or I say that the time will come when the “markets” will
take that elevator ride down. The question is not “if” an elevator ride
down will occur, but, “when” an elevator ride down will occur. Next
week? Next year? In five years?
Sorry, but, we don’t know the answer to this question.
We do know that when the time comes we should take the same approach we have
during the stairway up, to rebalance your portfolio to the appropriate level of
risk. It is during these times on the stairs that we should consistently
be revisiting your goals and understanding the appropriate level of risk for
your investments, whether they are traditional stocks & bonds, real estate,
or private investment opportunities. This will allow us to understand
what we expect to happen to your asset values during the next elevator ride
down, before it occurs. Being prepared for this should help us make
better educated, more rational, decisions when the time comes since the ride
down may occur faster than the climb up.
To help us assess risk, we have asked many of you to
complete a brief questionnaire from RiskAlyze that focuses on the dollar amount
gains and losses you would be comfortable with in a 6 month period of
time. If you haven’t completed this yet, please
expect to hear from us in the coming months. This is an exercise
we plan to revisit with you on a regular basis.
As always, we are here to answer any questions you might
have.
June 5, 2015
Tax Laws for Household Employees
When a family hires an individual to perform duties in or around their home, they are considered a “household employer.” The IRS views the worker — whether a nanny, health aide, housekeeper, gardener, cook/chef, personal assistant, estate manager, etc. — as an employee of the family. Misclassifying an employee as an “independent contractor” is considered tax evasion.
If a household employee is paid more than $1,900 (2014) in a calendar year, the household employer is required to withhold and remit payroll taxes to the state and the IRS. If a household pays an employee less than the threshold in a calendar year, payroll taxes are not required to be withheld and remitted; however, the household is still legally considered an employer and, therefore, must adhere to federal and state labor laws.
Click on the pictures below to read more from Care.com and HomePay on the financial and legal responsibilities for household employees:
If a household employee is paid more than $1,900 (2014) in a calendar year, the household employer is required to withhold and remit payroll taxes to the state and the IRS. If a household pays an employee less than the threshold in a calendar year, payroll taxes are not required to be withheld and remitted; however, the household is still legally considered an employer and, therefore, must adhere to federal and state labor laws.
Click on the pictures below to read more from Care.com and HomePay on the financial and legal responsibilities for household employees:
May 18, 2015
Earned Sick Time Safe Harbor for Employers
July 1 is fast approaching for businesses impacted by the new Earned Sick Time Law. However, the Attorney General is issuing a safe harbor to afford some businesses until January 1, 2016 to come into full compliance. If you already provide employees with paid time off, this may be of use to you. If you have specific questions, we recommend speaking directly to legal counsel or professional human resource consultants.
See today's press release here:
For more details on the law, click on the link below:
May 14, 2015
Medicare Premiums to Increase for High Income Beneficiaries
New legislation that was recently passed, known as the "Doc Fix" also has provisions that will change the income tiers for Medicare premiums beginning in 2018 (based on your income from the 2016 tax year). While this is not the focus of the new law (Medicare Access and CHIP Reauthorization Act of 2015) it is one component of it that will impact higher income individuals and couples with Medicare Part B & D.
Last year we wrote a series of blog entries outlining Medicare. See the link below to the one highlighting Medicare premiums:
http://singlepointpartners.blogspot.com/2014/11/medicare-part-b-d-premiums-other-costs.html
If you are single and have a Modified Adjusted Gross Income (MAGI) of $107,000 or less, or, if married and your MAGI is $214,000 or less these changes will not effect you.
There are 5 income tiers for Medicare premiums (Part B & D). Each income tier comes with it a higher premium, with the base premium in Tier 1 being $104.90/mo.
Part B Premiums by Tier 2015
Tier 1 = $104.90
Tier 2 = $146.90
Tier 3 = $209.80
Tier 4 = $272.70
Tier 5 = $335.70
Tiers 4 and 5 are where the changes appear. Essentially, lowering the top end of these tiers which will push people into the higher premium tier faster.
As you can see, the highest tier of income pays $2,769.60 per year more in Medicare Part B premiums than Tier 1 ($335.70 vs. $104.90/mo).
Beginning in 2018, married couples will reach Tier 4 at $267,000 of MAGI, instead of $320,000 MAGI. So, if your MAGI is between $267k-$320k expect your Medicare premiums to be going up. For single filers it occurs at $133,500 instead of the current $160,000 mark.
Tier 5 is reached for married couples at $320,000 instead of the current level of $428,000. For single filers it occurs at $160,000 instead of $214,000 currently.
To us, the important take away is that these Medicare tiers are another factor to monitor in your cash flow and tax planning for those with Medicare. If you are right on the cusp of one of these tiers, it may be worth looking at some year end tax strategies that can help keep you in the lower premium income tier.
Last year we wrote a series of blog entries outlining Medicare. See the link below to the one highlighting Medicare premiums:
http://singlepointpartners.blogspot.com/2014/11/medicare-part-b-d-premiums-other-costs.html
If you are single and have a Modified Adjusted Gross Income (MAGI) of $107,000 or less, or, if married and your MAGI is $214,000 or less these changes will not effect you.
There are 5 income tiers for Medicare premiums (Part B & D). Each income tier comes with it a higher premium, with the base premium in Tier 1 being $104.90/mo.
Part B Premiums by Tier 2015
Tier 1 = $104.90
Tier 2 = $146.90
Tier 3 = $209.80
Tier 4 = $272.70
Tier 5 = $335.70
Tiers 4 and 5 are where the changes appear. Essentially, lowering the top end of these tiers which will push people into the higher premium tier faster.
As you can see, the highest tier of income pays $2,769.60 per year more in Medicare Part B premiums than Tier 1 ($335.70 vs. $104.90/mo).
Beginning in 2018, married couples will reach Tier 4 at $267,000 of MAGI, instead of $320,000 MAGI. So, if your MAGI is between $267k-$320k expect your Medicare premiums to be going up. For single filers it occurs at $133,500 instead of the current $160,000 mark.
Tier 5 is reached for married couples at $320,000 instead of the current level of $428,000. For single filers it occurs at $160,000 instead of $214,000 currently.
To us, the important take away is that these Medicare tiers are another factor to monitor in your cash flow and tax planning for those with Medicare. If you are right on the cusp of one of these tiers, it may be worth looking at some year end tax strategies that can help keep you in the lower premium income tier.
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