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Tuesday, July 29, 2014
How we take Social Security and when we take Social Security could possibly impact what we receive and how our other income assets respond. Below are Three Social Security Snares we will have to be aware of if we are going to succeed in retirement (stay retired).
Social Security Snare One
Here is a surprise, up to 85% of one's Social Security can become taxed. Yes it's true the IRS could take up to 85% for those who earn more than they allow. Often times we feel that we can get away from this limit on income by using certain financial tools such as Municipal Bonds. But when the IRS is evaluating our income for taxation of our Social Security, many instruments are now counted against us including Municipal Bonds.
Eric Levenhagen, CPA and Certified Tax Coach with ProWise Tax & Accounting, says to find out whether any of your Social Security benefits are taxable, "Look at your total taxable income plus half of your Social Security benefit. Make sure you add back any tax-exempt interest income."
Social Security Snare Number 2
Delaying withdrawals from your IRA can be a tax tsunami for your Social Security island. Many wait to withdraw from their IRA until the date the IRS forces funds out. Many Investment Advisors want client's funds to grow and be charged their management fee. Many clients are not advised to withdraw from their IRA Investment Accounts when they have a lower tax bracket to minimize the impact in their retirement years.
IRA withdrawals prior to taking Social Security benefits could have a big impact on reducing the future taxation of Social Security. Required Minimum Distributions at age 70 1/2 can severely impact the overall income calculation and in turn cause Social Security to be taxed at a higher level.
Social Security Snare Number 3
Here is a secret that might take many by surprise. Not everyone gets Social Security! Some companies don't participate in Social Security, whether or not they are working for the federal government, the state government, some local governments, and others.
If the company does not take part in Social Security then there probably is the chance to be involved in a company retirement plan. It is important to know where you and your company stand, the worst thing is to come to retirement and then realize your company did not participate in Social Security.
For additional information on Social Security Snares please click here. These 3 Social Security Snares must be understood in order to succeed in retirement (stay retired).
Chief Advisor of Aaron Matthews Financial Resources
Matt Golab's Bio:
Matt Golab is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years. The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight. He is often featured in Retirement Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans. Matt is frequently featured in The Wall Street Journal, CNBC, MSN Money, The San Francisco Chronicle, Newsweek, TheSmartRetiree, Burlington County Times and appeared nationwide on ABC, CBS, Fox, and NBC as well as USA Today. Matt also has a weekly radio show where he discusses all aspects of retirement planning, total wealth management, and estate strategies.
Through his relationship with Retirement Radio Network experts such as David Walker former Comptroller General of the United States, Harry Dent of the H.S. Dent Foundation, John Bogle of the Vanguard Funds and many more have been heard on his show Income Forever.Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, "I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market". Matt Golab was recruited to write a chapter in Tom Hopkins recent book, Victory which became a National Best Seller. For his contribution to Victory, Matt recieved the high honor of an Editors Choice Award. If you would like contact information for Matt Golab, please simply click right here. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.