Category: Tips

Medicare covers the bulk of your health care expenses after you turn 65. But Medicare's rules can be confusing and mistakes costly. If you don't make the right choices to fill in the gaps, you could end up with high premiums and big out-of-pocket costs. Worse, if you miss key deadlines when signing up for Medicare, you could have a gap in coverage, miss out on valuable tax breaks, or get stuck with a penalty for the rest of your life. Here are 11 common Medicare mistakes you should avoid making. Keeping Your Part D Plan on Autopilot Open enrollment for Medicare Part D and Medicare Advantage plans runs from October 15 to December 7 every year, and it's a good time to review all of your options. The cost and coverage can vary a lot from year to year—some plans boost premiums more than others, increase your share of the cost of your drugs, add new hurdles before covering your medications, or require you to go to certain pharmacies to get the best rates. And if you've been prescribed new medications or your drugs have gone generic over the past year, a different plan may now be a better deal for you. It's easy to compare all of the plans available in your area during open enrollment. Go to the Medicare Plan Finder and type in your drugs and dosages to see how much you'd pay for premiums plus co-payments for plans in your area. See How to Find the Best Medicare Drug Plan for You for 2019 for more information about picking a plan. Buying the Same Part D Plan as Your Spouse There are no spousal discounts for Medicare Part D prescription-drug plans, and most spouses don't take the same medications. One plan may have much better coverage for your drugs while another may be better for your spouse's situation. "You need to look at the coverage for your specific drugs," says Tricia Blazier, of Allsup Medicare Advisor, which helps people with their Medicare decisions. You can look your drugs and dosages using the Medicare Plan Finder to estimate out-of-pocket costs for each of you under the plans in your area. Just be careful if you and your spouse sign up for plans with different preferred pharmacies—some plans only give you the best rates if you use certain pharmacies, so you could end up paying a lot more if you get your drugs somewhere else. Going Out-of-Network in Your Medicare Advantage Plan If you choose to get your coverage through a private Medicare Advantage plan, which covers both medical expenses and prescription drugs, you usually need to use the plan's network of doctors and hospitals to get the lowest co-payments (and some plans won't cover out-of-network providers at all, except in an emergency). As with any PPO or HMO, it's important to make sure your doctors, hospitals and other providers are covered in your plan from year to year. You can switch Medicare Advantage plans during open enrollment each year from October 15 to December 7, and you can compare out-of-pocket costs for your medications and general health condition under the plans available in your area by using the Medicare Plan Finder. After you've narrowed the list to a few plans, contact both the insurer and your doctor to make sure they'll be included in the network for the coming plan year. Not Switching Medicare Advantage Plans Mid Year If Needed Even though open enrollment for Medicare Advantage plans runs from October 15 to December 7, you may still be able to change plans during the year. In 2019, you have a new opportunity to change plans after open enrollment. You now have from January 1 to March 31 to switch to a different Medicare Advantage plan. You can also switch plans outside of open enrollment if you have certain life changes, such as moving to an address that isn't in your plan's service area (see Special Enrollment Periods for more information). And if you have a Medicare Advantage plan in your area with a five-star quality rating, you can switch into that plan anytime during the year (you can use the Medicare Plan Finder to see whether a five-star plan is available in your area). Not Picking the Right Medigap Plan If you buy a Medicare supplement plan within six months of enrolling in Medicare Part B, you can get any plan in your area even if you have a preexisting medical condition. But if you try to switch plans after that, insurers in most states can reject you or charge more because of your health. It's important to pick your plan carefully. See How Preexisting Conditions Can Affect Medigap Insurance for more information on choosing a plan. Some states let you switch into certain plans regardless of your health, and some insurers let you switch to another one of their plans without a new medical exam. Find out about your state's rules and the plans available at your state insurance department Web site. You can also find more information about medigap policies in your area at Medicare.gov. Forgetting That You Can Sign Up for Medicare at 65 If you're already receiving Social Security benefits, you'll automatically be enrolled in Medicare Part A and Part B when you turn 65 (although you can turn down Part B coverage and sign up for it later). But if you aren't receiving Social Security benefits, you'll need to take action to sign up for Medicare. If you're at least 64 years and 9 months old, you can sign up online. You have a seven-month window to sign up—from three months before your 65th birthday month to three months afterward (you can enroll in Social Security later). You may want to delay signing up for Part B if you or your spouse has coverage through your current employer. Most people sign up for Part A at 65, though, since it's usually free—although you may want to delay signing up if you plan to continue contributing to a health savings account. See the Social Security Administration's Applying for Medicare Only for more information. If you work for an employer with fewer than 20 employees, you must sign up for Part A and usually need to sign up for Part B, which will become your primary insurance (ask your employer whether you can delaying signing up for Part B). Not Signing Up for Part B If You Have Retiree or COBRA Coverage When you turn 65, Medicare is generally considered to be your primary insurance, and any other coverage you have is secondary, unless you or your spouse has insurance through a current employer with 20 or more employees. But the coverage must be with a current employer. Other employer-related coverage, such as retiree coverage, COBRA coverage, or severance benefits, isn't considered to be primary coverage after you turn 65. That means if you don't sign up for Medicare, you may have gaps in coverage and be subject to a lifetime late-enrollment penalty of 10% of the current Part B premium for every year you should have been enrolled in Part B but were not. You may also have to wait to get coverage: If you miss the window for enrolling when you turn 65 or eight months after you leave your job, you can only sign up for Medicare between January and March each year, with coverage starting on July 1. For more information, see the Medicare Rights Center's Medicare Interactive page about the rules for job-based insurance after age 65. Forgetting About the Part B Enrollment Deadline After Leaving Your Job If you have coverage through an employer with 20 or more employees, you don't have to sign up for Medicare at 65. Instead, you may choose to keep coverage through your employer so you don't have to pay the Part B premiums. But you need to sign up within eight months after you leave your job or you may have to wait until the next enrollment period (January through March, for coverage to begin on July 1). That means you could go for several months without coverage. You may also get hit with the 10% lifetime late-enrollment penalty. Making Financial Moves That Boost Your Medicare Premiums Most people pay $134 per month for Medicare Part B premiums in 2018. But if you're single and your adjusted gross income is more than $85,000 (or more than $170,000 for joint filers), you'll have to pay from $187.50 to $428.60 per month in 2018. And you'll have to pay a high-income surcharge for your Part D prescription-drug coverage, too, which can boost your premiums by $13 to $74.80 per month. If you're near the income cutoff, be careful about financial moves that could increase your adjusted gross income and make you subject to the surcharge, such as rolling over a traditional IRA to a Roth or making big withdrawals from tax-deferred retirement accounts. To stay below the limits, you may want to spread your Roth conversions over several years or withdraw money from Roths rather than just from tax-deferred accounts. Not Contesting the High-Income Surcharge for the Year You Retire Your Part B and Part D premiums are higher if you earned more than $85,000 if single or $170,000 if married filing jointly. The Social Security Administration uses your most recent tax return on file (generally 2016 for 2018 premiums) to determine whether you're subject to the surcharge. But you may be able to get the surcharge reduced if your income has dropped since then because of certain life-changing events, such as marriage, divorce, death of a spouse, retirement or a reduction in work hours. In that case, you can ask Social Security to use your more recent income instead (you'll need to provide evidence of the life-changing event, such as a signed statement from your employer that you retired). See the Social Security Administration's Medicare Premiums: Rules for Higher-Income Beneficiaries for more information. Signing Up for Medicare Part A If You Want to Contribute to an HSA You can't contribute to a health savings account after you sign up for Medicare, but that doesn't necessarily mean that you have to stop making HSA contributions at age 65. If you or your spouse has health insurance through your current job, you can delay signing up for Part A and Part B and keep contributing to an HSA. This isn't an option if you have already signed up for Social Security or your employer has fewer than 20 employees—in that case, you can't delay signing up for Part A. Be careful about your contributions in the year you leave your job and sign up for Medicare—you must prorate your HSA contributions based on the number of months before you were covered by Medicare. See FAQs About Health Savings Accounts for more information. Source: Kiplinger.com

When you’re choosing a health plan for the year -- whether you get coverage through your employer or on your own -- one option may be a high-deductible plan that makes you eligible to contribute to a health savings account. There are a lot of misconceptions about how HSAs work. Health savings accounts offer a triple tax break -- contributions aren’t taxed, the money grows tax-deferred, and it can be used tax-free for eligible medical expenses at any time. Here, we take a look at several of the most common HSA myths -- and the reality. Myth: You Must Use HSA Money by Year-End This is the biggest misconception about HSAs. Unlike flexible spending accounts, HSAs have no use-it-or-lose-it rule. You can use the money tax-free to pay eligible medical expenses at any time. The money can pay current medical expenses -- such as your insurance deductible, co-payments for health care and prescription drugs, and out-of-pocket costs for vision or dental care -- but you’ll get the biggest tax benefit if you keep the money growing in the account and withdraw it for medical expenses much later, such as in retirement. You can withdraw HSA money tax-free, for instance, to pay Medicare Part B, Part D and Medicare Advantage premiums after you turn age 65. Most HSAs let you invest the money in mutual funds for the long term. Myth: You Can Only Get an HSA Through Your Employer Although many employers pair an HSA with a high-deductible health insurance plan, anyone with an HSA-eligible health insurance policy can contribute to an HSA. (HSA-eligible policies must have a deductible of at least $1,350 for single coverage or $2,700 for family coverage in 2019.) Many banks and other financial institutions offer health savings accounts. You can find HSA administrators at www.hsasearch.com, where you can compare fees and investing options. If your employer does offer an HSA, however, that’s usually your best option because many employers contribute money to employees’ HSAs (an average of $500 per year for individuals and $1,000 for families), and employers tend to cover most of the fees for employees’ HSAs. Also, contributions made through payroll deduction are pre-tax, avoiding federal and Social Security taxes. If you contribute to an HSA on your own, your contributions are tax-deductible. Myth: You Can’t Use Money in the HSA After You Sign Up for Medicare You can’t make new contributions to an HSA after you enroll in Medicare, but you can continue to use the money that’s already in the account tax-free for out-of-pocket medical expenses and other eligible costs that aren’t covered by insurance, such as vision, hearing and dental care and co-pays for prescription drugs. You can also take tax-free withdrawals to pay a portion of long-term-care insurance premiums based on your age, ranging in 2018 from $410 if you’re 40 or younger to $5,110 if you’re 70 or older. And after you turn 65, you can use HSA money to pay premiums for Medicare Part B, Part D or Medicare Advantage. You can even withdraw money from your HSA to reimburse yourself if your Medicare premiums are paid directly out of your Social Security benefits. “You just need to keep your payment notification from Social Security in your tax records, and you can reimburse yourself dollar for dollar,” says Steven Christenson, executive vice president at Ascensus, a benefits consultant. Myth: You Can’t Contribute to an HSA After You Turn 65 Eligibility to make HSA contributions stops when you enroll in Medicare. That’s not necessarily when you turn 65. Some people who keep working for a large employer at age 65 choose to delay signing up for Medicare Part A and Part B so they can continue to contribute to an HSA (especially if their employer contributes money to the account, too). However, you can only delay signing up for Medicare at 65 if you have health insurance from a current employer (or if you have coverage through your spouse’s employer); the employer generally must have 20 or more employees. Otherwise, you generally have to sign up for Medicare at 65. If you are eligible to delay signing up for Medicare, be sure to enroll within eight months of losing your employer coverage so you won’t have a late-enrollment penalty. You can make pro-rated HSA contributions for the number of months before your Medicare coverage takes effect. If you sign up for Medicare Part A after age 65, your coverage takes effect retroactively six months before you enrolled. Myth: You Must Get Permission From HSA Administrators to Withdraw Money Unlike with an FSA, which usually requires you to gather receipts and get permission from the administrator to make withdrawals, you can withdraw money from your HSA whenever you want. Many HSAs have debit cards that make it easy to use the account for eligible expenses, but you can also withdraw money on your own and keep the records in your tax files to prove that the withdrawals should be tax-free. “FSAs require the administrator to substantiate the claim, but with HSAs, there is no substantiation requirement -- you just have to keep the receipts,” says Steve Auerbach, CEO of Alegeus, which provides technology for HSAs. Myth: You Must Use HSA Funds Within a Certain Time Period After You Incur Medical Bills One quirk of the HSA rules is that there’s no time limit for using the money after you incur an expense. Say you have knee surgery and pay a $1,000 deductible in cash. As long as you had the knee surgery after you opened an HSA, you can withdraw that $1,000 tax-free from the account anytime -- even years later. You just need to keep track of your receipts for the HSA-eligible expenses. Many HSA administrators make it easy to import medical claims-payment records from your health insurance to your HSA and keep track of whether you paid the bill with your HSA or with cash. “We store all of those claims and receipts for you. If, say, in two years you want to take the money out, it can come out tax-free because you’ve already incurred those expenses,” says Auerbach, of Alegeus. Myth: You Can Only Invest the HSA Money in a Savings Account HSAs have savings accounts, so you know the money will be there if you plan to use it for current expenses. But many HSA administrators also let you invest the money in mutual funds for the long term. The fees and investing options vary a lot by company -- some offer low-cost funds from Vanguard, Fidelity and other well-known fund companies. You can compare fees and investing options at www.hsasearch.com. Some HSA administrators charge extra fees unless you maintain a minimum balance. Myth: Your Spouse and Kids Can Only Use HSA Money If Covered by Your Health Plan The rules for contributing to an HSA are different than they are for using the money. For 2019, you can contribute up to $3,500 to the account if you have health insurance coverage on you only or up to $7,000 if you have family coverage. You can also contribute an extra $1,000 if you’re 55 or older. But no matter whether you have individual or family health insurance coverage, you can use the HSA money tax-free for qualified medical expenses for yourself, your spouse and your tax dependents -- even if those family members are covered under a different policy, says Roy Ramthun, CEO of HSA Consulting Services. Myth: You Can’t Use the HSA After You Leave Your Job Here’s another way that HSAs differ from FSAs: You can keep the HSA even if you leave your job. You can usually maintain the HSA through the current administrator or roll it over to a different one (similar to an IRA rollover). And if you have an HSA-eligible high-deductible policy -- whether through a new employer or on your own -- you can continue to contribute to the HSA. Myth: It Doesn’t Make Sense to Have an HSA-Eligible Policy If You Have a Lot of Medical Expenses Some people are reluctant to choose a high-deductible health insurance policy if they have a lot of medical expenses. But you need to do the math and compare the overall costs. In some cases, the premium savings by choosing the high-deductible policy rather than a lower-deductible plan may cover most of the difference in the deductible. And if you have employer coverage, your employer may contribute to your HSA to help close the gap. The employer contribution is generally seed money rather than a match. Many employers deposit a fixed amount of money into the account at the beginning of the year for anyone who has an HSA-eligible policy, says David Speier, managing director of benefits accounts at Willis Towers Watson, a benefits consultant. Add up the difference in premiums, deductibles and other out-of-pocket costs for your regular medical expenses, as well as any employer contribution, when deciding on a policy. Many employers are introducing decision-making tools to help with the calculations, says Speier. Source: Kiplinger.com

You don’t have to play trick or treat with your budget this Halloween when you plan those candy purchases and flex your crafting muscles to make decorations. The National Retail Federation estimates that consumers will spend $7.4 billion on Halloween this year, with the average person shelling out about $77 on decorations, costumes, and candy. But it's possible to make savvy purchases to bring down the cost. Follow these seven tips to save money on Halloween this year. 1. Buy Halloween candy from a warehouse club.  Buying your Halloween candy in bulk from a warehouse club can help you save money and avoid the hassle of making multiple trips to the grocery store to stock up on popular types of candy during the weeks leading up to Halloween. Pick up a few mixed bag varieties to give your trick-or-treaters plenty of options. If you’re feeling generous, go with regular-size candy bars that are also priced at a discount at warehouse clubs. 2. Shop at online party stores for Halloween decorations.  Whether you're hosting a Halloween party or want to deck out your home in Halloween décor, peruse the inventory of online party stores for some great deals before you head out to your local big-box store. Many party stores will offer discounts on bulk buys and run specials on Halloween items throughout the season. Keep an eye out for coupons and online-only offers to save even more on your purchases.  3. Buy arts and craft supplies at the dollar store.  If you’ve caught the crafting bug this season, head to the dollar store or other discount stores in your area to round up basic supplies to make your own decorations. Be creative with ready-made treat bags and other Halloween decorations that you can repurpose to make wreaths, centerpieces and other festive decorations. 4. Search for free activities in the community.  If you don’t have room in the budget to host a Halloween party for the kids or even to stock up on holiday candy this year, plan on taking everyone out for some free Halloween fun at your local community center, school, museums and other local venues. Take a look at the events page in your local newspaper, find events on the Facebook pages of organizations you are a part of or review the community calendar at civic centers and other local organizations to find low-cost ways to celebrate Halloween. 5. Hold off on the pumpkin roundup.  Waiting until Oct. 30 or a few days before Halloween to buy pumpkins could save you some money. Plan on carving the pumpkins on Halloween instead of earlier in the season when the pumpkins are prone to rot. Many stores sell pumpkins at deep discounts right around Halloween to clear out some of the inventory before the big post-Halloween price drop. Keep in mind, you could still use uncarved pumpkins as decorations for Thanksgiving. 6. Make your own Halloween costumes.  You’ll find plenty of tutorials and tips for making Halloween costumes with inexpensive materials online, so get inspired by perusing some Pinterest boards and posts from crafty bloggers. Even something as simple as a decorative mask or a cape embellished with Halloween motifs can be enough to get you in the Halloween spirit. Buy items you can reuse for next year’s Halloween events or even for a costume party this upcoming holiday season. 7. Shop at surplus stores. Stores that carry overstock, surplus and slightly damaged or irregular merchandise can be a treasure trove for bargain hunters and typically carry a large selection of holiday-themed merchandise. Whether you’re in the market for a Halloween-print tablecloth, candelabras or a festive door hanging, surplus stores may have just what you need to create a spooky space at home or in the office. Some of these stores also carry a line of Halloween costumes for kids and accessories you could use to put together your own costumes. If an item is visibly damaged but still usable, don’t be afraid to ask for a discount – some stores will take 10 percent or more off the sticker price to make the sale. Source: USNews.com

In today’s digital age, in which seemingly anything that matters is stored virtually “in the cloud,” a physical safe deposit box comes across as a relic of the bricks-and-mortar past. But don’t be too hasty to dismiss the importance of keeping certain valuables securely tucked away in your bank’s vault. A safe deposit box can offer critical protection for important documents and prized possessions. “I have birth certificates and Social Security cards and old valuable baseball cards that were my father’s in a safe deposit box,” says William P. Simons III, president and CEO of Rust Insurance Agency in Washington, D.C. A safe deposit box isn’t a wise choice for everything, however. We talked to experts to come up with a list of nine things you might come to regret locking away in your bank, which isn’t open nights, holidays or perhaps even weekends. Instead, Simons recommends storing important items that you need to access more frequently or on short notice in a fireproof home safe that’s bolted to the floor. See the list of safe deposit box no-no’s. Cash Keeping a stash of cash in a safe deposit box isn’t a good idea for several reasons, warn experts. First, if you need the money in an emergency, but the bank is closed, you’re out of luck. Second, the idle cash loses buying power over time due to the effects of inflation. It’s better to put the money in an interest-bearing account or certificate of deposit. Third, some banks expressly forbid storing cash in a safe deposit box. Read the fine print of your agreement. Keep in mind, too, that cash in a safe deposit box isn’t protected by the Federal Deposit Insurance Corporation, says Luke W. Reynolds, chief of the FDIC’s Community Outreach Section. To receive FDIC insurance, which covers up to $250,000 per depositor per insured bank, your cash needs to be deposited in a qualifying deposit account such as a checking account, savings account or CD. Passport Let’s face it: Unless you’re, say, an international jet-setter or global business executive, you probably don’t need your passport in hand 24/7. So it’s tempting to store it in a safe deposit box where it won’t get lost, damaged or stolen. Our advice: Avoid the temptation. A planned trip is one thing, but emergency trips by their nature are unplanned – and inevitably arise during non-banking hours. A child getting sick while studying abroad or a parent suffering an accident while on an international cruise can spark a scramble to book tickets to leave the country on short notice. “When we talk about important documents [to store in a safe deposit box], a passport would be a bad idea for that last-minute trip to Europe that you booked at 5 p.m. and your flight is at 9 p.m.,” says Rust Insurance Agency’s Simons, who keeps his passport in his home safe. “If your passport is in the safe deposit box, you’re staying home.” Original Copy of Your Will It’s fine to keep copies of your own will, your spouse’s will and any wills in which you’re named the executor in a safe deposit box. However, do not store the original copy of your will there – especially if you’re the sole owner of the safe deposit box. Here’s why: After your death the bank will seal the safe deposit box until an executor can prove he or she has the legal right to access it. This could lead to long and potentially costly delays before your will is executed and your heirs receive their inheritances. Instead, keep the original copy of your will with your attorney or somewhere else where your executor can access it without jumping through legal hoops. Letters of Instruction Leaving a letter of instruction to go along with your will is a smart estate-planning move. The letter can outline such things as whether you want to be buried or cremated, and what kind of memorial service, if any, you’d like to have. The level of detail is up to you. Also, a letter of instruction can include details on specific bequests – Uncle Earl gets your “Star Wars” DVD collection, Cousin Vicky gets the pearl earrings, and so on. But if your letter of instruction is sealed inside a safe deposit box that no one can access, then your final wishes might not be granted. Keep the letter of instruction with your original will. Simons also recommends sending dated copies of the letter to anyone who is designated to receive a specific bequest. Durable Power of Attorney (POA) You’ve taken the right steps and completed the legal documents that would grant so-called durable power of attorney to a trusted friend, family member or professional adviser. That way, should you become incapacitated or somehow unable to handle your legal and financial affairs, that person has the authority to step in and make decisions on your behalf. However, if that POA is locked away in a safe deposit box that no one can access, then the person you are counting on to protect you at your time of need could find his or her hands tied. Keep the original POA with the original copy of your will, and provide copies of the POA to those who may one day need it. Advance Directives for Health Care When it comes to estate planning and your health, two documents are indispensable: a living will and a health care proxy. These documents are sometimes referred to collectively as advance directives, but each serves a unique purpose. A living will states your wishes for end-of-life care: Do you want a ventilator or feeding tube used to keep you alive? Do you want to be resuscitated if your heart stops? Absent a living will, doctors are obligated to take extraordinary (and perhaps unwanted) steps to save you. A health care proxy, also known as a health care power of attorney, designates someone to make medical decisions for you in the event you can’t make them for yourself. Neither document will do you much good locked away in an inaccessible safe deposit box. Make sure your medical providers, family members and health care POA have copies on hand. Uninsured Jewelry and Collectibles Heirloom jewelry, a wedding band from your first marriage, rare coins and similar valuables are good candidates for a safe deposit box – but only if they’re properly insured. The FDIC doesn’t insure the contents of a safe deposit box, nor does the bank itself unless otherwise stated in your agreement. Wells Fargo, for example, explicitly states that box contents aren’t insured and advises box owners to “purchase an appropriate policy from the insurance company of your choice.” Standard homeowners insurance offers some coverage for personal property kept off-premises, but limits are typically low for valuables such as jewelry and collectibles. One option is to contact your insurer to see if the limits can be raised. Alternatively, consider what’s called a personal articles floater, a supplemental policy that provides added coverage for specified valuables, says David H. Borg of the Borg & Borg insurance agency in Huntington, N.Y. You’ll likely need to get the items “scheduled,” which means providing original receipts and/or written appraisals. It’s a good idea to keep appraisals up to date for items that fluctuate widely in value. Be sure to take photos, too, in case you ever need to file a claim. Spare Keys A spare key is one of the worst things to keep in your wallet. If your wallet is ever lost or stolen, the key combined with the address on your driver’s license is an open invitation to thieves to ransack your home. Keeping a spare house key in a safe deposit box is also a bad idea, albeit for different reasons. Think about it: You only have access to your safe deposit box during normal banking hours – and only if you have the box’s key with you. If you’re like most people, your safe deposit box key is squirreled away somewhere inside your home…from which you’re currently locked out. Save yourself the aggravation and leave a spare key with a trusted neighbor (or two) or a nearby relative. Illegal or Dangerous Items Your bank should offer up a list of what isn’t permissible to keep in a safe deposit box. Pay attention. Firearms typically aren’t allowed, nor are explosives. The same goes for illicit drugs and hazardous materials. Figure anything illegal or dangerous is a no-no. Use common sense, but remember that different banks might have different rules, so read the fine print of your bank’s safe deposit box agreement. If still in doubt, ask your banker for clarification. Source: Kiplinger.com

For many older Americans, retirement is shaping up to not really be retirement at all. In addition to those who continue working full-time well into their 60s and beyond, many who do leave 40-hour workweeks behind end up taking on part-time work even if it wasn't part of their initial retirement plan. "We're seeing a trend of people retiring from a long-term career … and a while later deciding they want a part-time job," said certified financial planner Julie Virta, a senior financial advisor with Vanguard. "I still see people working at age 70, 71 or 72," Virta said. "It brings them a sense of value that they had in their long-time professional career." More than half (54.7 percent) of people age 60 to 64 were working at least part-time in 2017, according to the Bureau of Labor Statistics. In the 65-to-69 crowd, nearly a third (31.2 percent) were in the work force last year. If you find yourself among those who return to work for any number of reasons — i.e., personal fulfillment, financial necessity — it's important to be aware of the impact that the extra income could have on other areas of your financial life. "If you choose to go back to work, there are probably a whole bunch of reasons it makes sense," said DeDe Jones, a certified financial planner and managing director at Innovative Financial. "You just should know what to expect." Effect on Social Security If you tap Social Security before your full retirement age (as defined by the government) and are still working or return to work, your wage income could reduce your benefits. “You do not want to give Jeff Bezos a seven-year head start.” Hear what else Buffett has to say While delaying Social Security for as long as possible means a higher monthly check, many people take it as soon as they can — at age 62 — or soon thereafter. If you do start getting those monthly checks early, there's a limit on how much you can earn from working without your benefits being affected. For 2018 that cap is $17,040. If you earn more than that, your benefits will be reduced by $1 for every $2 you earn over that threshold. Then, when you reach full retirement age around age 66 or 67 — the exact age depends on your birth year — the money comes back to you in the form of a higher monthly check. At that point, you also can earn as much as you want from working without it affecting your Social Security benefits. Also, if you are one of those early takers who is working and you reach full retirement age during 2018, $1 gets deducted from your benefits for every $3 you earn above $45,360. Beware Medicare Surcharges In addition to more income potentially pushing you into a higher tax bracket, it also could trigger additional costs for Medicare. Basically, higher earners pay a surcharge for Medicare Part B (outpatient coverage) and Part D (prescription drugs). The extra charges start at income above $85,000 for individuals and $170,000 for married couples who file joint returns. "If you're a professional and you continue to work, you can be subject to the surcharges pretty easily," Jones said. "It's good to at least anticipate it if it's unavoidable." Medicare Part B Premiums Don't Overlook RMDs When you reach age 70½, you face required minimum distributionsfrom certain retirement accounts. When you're employed, it can be easier to forget those RMDs. "If you're working, you might not think of yourself as retired, but you still have to take the distributions," said Virta at Vanguard. If your work includes participating in a 401(k) plan, you generally are still allowed to make contributions and not take the RMDs from that workplace plan. However, you would still have to take those distributions from any traditional individual retirement account you have. If you don't, you'll face a potential 50 percent penalty tax. Roth IRAs do not have RMDs while the original owner remains alive. Source: cnbc.com

The loss of a spouse can be one of the most difficult times in a person’s life. Living through my own loss, I have learned from others and appreciate all those who dedicate themselves to helping individuals in their state of bereavement. In our work with widows and widowers, we typically encourage them to build a “circle of support.” Experienced, caring professionals can have helpful advice before and after a death. The following is professional advice from two experts I count on with helpful tips for someone who might have recently lost their significant other. 1. Follow the money trail. The loss of your spouse is difficult enough, but now you are faced with the aftermath of the things you need to do to continue on with your life and your grief simultaneously. If you were not the one handling the family finances then start by going through the various expenses paid and the income received. Make sure you understand each expense and income item and whether it is a one-time or recurring income or expense. Make sure you have enough cash on hand to cover your recurring expenses over the next several months. Be sure to cancel unwanted recurring expenses of your spouse, such as medical insurance, subscriptions and club dues, seek partial refunds, if available, as soon as possible. Keep a joint checking account open for at least one year to accommodate potential odd refunds and expenses.  — John Muldoon, CPA, MST 2. Practice sorting and prioritizing to-do lists. Make a list of everything on your mind. Include everything you think you need to do, everything you’re worrying or thinking about, and everything other people seem to think you should do. Then prioritize the items on that list. The only urgent items on your list are those that will damage some part of your well-being if you don’t do them right this minute. While some other tasks may feel urgent, they can and should be deferred, leaving you room to back up and turn around. Focus initially only on the few items that are truly urgent and immediate. All the rest can be divided between a soon list and a later list.  — Susan Bradley, founder of the Sudden Money Institute 3. Gather critical documents. Bank accounts, brokerage and retirement accounts, credit card statements, tax returns, life insurance policies, motor vehicle titles, birth certificates, death certificates (you will need several duplicate copies of the death certificate for financial and tax matters to facilitate change of ownership), your marriage certificate, Social Security numbers and estate planning documents, such as a will, trusts and any powers of attorney executed. Appraisals for real estate, businesses owned and substantial personal or unique assets may be required for tax purposes. If your spouse was employed, review company benefits plans and understand your responsibilities and benefits available to you via your deceased spouse. There may be pension benefits, 401(k) plan (possibly roll it into your own IRA), life insurance, vacation or sick pay, bonus or stock options or funds left in flexible spending accounts available to you. If you were covered by your spouse’s company medical plan, you can likely continue to be covered under COBRA for a monthly premium. If your spouse was collecting Social Security, the agency should be notified of his or her passing. You will no longer receive a benefit payment the following month, but if you do (because of timing) you will be required to return the payment at a later date.  — John Muldoon, CPA, MST 4. Customize meetings with your adviser. It’s normal to feel exhausted by all that you’re suddenly facing both personally and financially. And when you’re tired, focus, information processing, recall and decision-making all suffer. Make a list of areas of your financial life that are making you feel most afraid or least confident. Tell your adviser that during this time you can only handle relatively short meetings, during which you learn about the most important aspects of your new financial situation one (or perhaps two) topics at a time.  — Susan Bradley, founder of the Sudden Money Institute 5. Seek professional help. This is especially true if significant financial assets have been accumulated in the marriage, such as real estate, investments or a business that was owned or partially owned by your spouse. While you can still elect to file a joint tax return with your deceased spouse in the year of death, an additional income tax return (Form 1041) may be needed for your spouse’s post death activity for the remainder of the calendar year. And if assets involved are valued in excess of $11.2 million (2018) at the date of death, an IRS Form 706 may be required nine months from the decedent’s DOD.  — John Muldoon, CPA, MST 6. Remind yourself that what you’re experiencing isn’t forever. Many widows say the first two years are the most difficult; they caution first-year widows to be prepared for the second year when it may feel like there is no end. But, believe it or not, like spring finally emerging after a long, hard winter, eventually the grief and confusion will fade enough that you can begin to look forward and dream again. You will sense the change as it approaches, and you will feel it as it grows. If you have the right advisers, you can ask for some help dreaming and maybe financially testing ideas and possibilities. Take your time; you and your dreams may need room to grow.  — Susan Bradley, founder of the Sudden Money Institute On a personal note, unlike most people who have lost a spouse, I did not need financial planning advice, however, I found the care and support I received from both John and Susan invaluable. Source: Kiplinger.com

If you go by the book, you would shoot for 10% to 20% of your gross income. But that ballpark figure can be deceiving. Savings and retirement estimators are helpful, but often misleading, tools. These calculators can be insufficient to determine how much money you should be saving based on a few calculations. It’s not wise to solely trust calculators to tell you if you’re adequately prepared for an emergency or retirement. In addition, some people trying these calculators may be so discouraged by the numbers they see that the tools end up not helping at all. If you looked in a financial planning textbook, an individual should be saving 10% to 20% of his or her gross income. However, that number, in and of itself, doesn’t tell the entire story. To estimate how much money you should be saving you can’t rely on general advice. And maybe that isn’t the right question to be asking anyway. Maybe instead of asking how much should you be saving, you should ask yourself how much can you save? Are you saving as much as possible? In a time when many Americans live without an adequate safety net, prioritizing savings is increasingly difficult for many people. Here are a few things to consider as you start thinking about your savings goals and how to ramp them up. Lifestyle Choices Affect Savings One of the biggest obstacles to savings is living outside of one’s means. Acquiring debt, installment payments and frequent “Keeping up with the Joneses” spending binges consume funds that could otherwise be saved and earn interest. That probably doesn’t come as a surprise to you, but what if you are living within your means? Your money decisions money can still have an impact on your ability to save. We all can do better. Not being purposeful in aligning your current spending with your priorities will undoubtedly leave you falling short of achieving your goals. I have seen many people who say being prepared financially for retirement is extremely important to them. However, when you look at their finances you quickly see that they’re spending a major portion of their income maintaining their current lifestyle. For example, I knew one man who was saving 6% of his gross income in a retirement account, while also receiving a 3% match from his employer. The problem was that he was also spending, on average, 20% more a month than what he made, running up credit card and home equity debt while depleting his savings. While he was saving for his future, at the same time he was destroying his current wealth and on the path to financial distress. The Curse of Instant Gratification Another problem many families face is the drive for instant gratification. Instant gratification is a curse to savings, in part because of the ease and convenience of both online shopping and digital banking. Advancing technologies facilitate spending money, and consumer demand drives technology’s march forward. More than simple wasteful spending, instant gratification may sometimes include necessary and functional purchases — just at the wrong time. For example, many people like driving a new car with the latest technology, but do you really need it? You may need a car because of where you live or your job, however do you need to purchase the latest model factory delivered with all of your specifications? Ways to defer gratification include: Make a list of wants, and save toward large purchases so you can pay in cash. These don’t have to be major purchase like a home or car, but could be a family vacation, a new washer and dryer or that new Ultra 4K TV. Use a debit card for purchases, not a credit card. If the money isn’t in the account, don’t make the purchase. Leave credit or debit cards behind completely and use only cash. Basically, don’t blow your money. Simple enough, right? But even the rich and famous can have trouble with that concept. Take Johnny Depp. His business managers, whom he is suing, say his “lavish spending” — $30,000 per month on wine, $200,000 per month on private jets and reportedly $75 million to buy homes, a horse farm in Kentucky and several islands in the Bahamas — has put him in dire straits. Saving enough for wants, emergencies and other unpredictable expenditures means having enough money left over from paychecks to save. For many this will be a difficult change to make. It will mean that you are willing to exercise financial discipline and delay purchases until you can afford them while also meeting your savings goals. Conclusion No calculator or estimator can come up with the exact amount for any one person to save. Knowing what to prepare for is personal to each individual situation. Every person who wonders how much to save must first examine a larger picture that includes long-term financial goals, lifestyle choices, spending habits, wants, desires and necessities. It is a personal decision that deserves thoughtful contemplation and strategic financial planning. If you are currently wondering how much you should be saving to reach your version of financial success, you can always reach out to a Certified Financial Planner. The time you take now to prepare for your financial future can make all the difference in your long-term quality of life. Source: Kiplinger.com

Many records are no longer needed three years after filing your tax return, but you may have to keep documents involving the purchase of a house or investments for years longer. Q: Now that I've filed my income tax return, I'm going to clean out my old files. What tax records can I toss, and what do I need to keep? How long do I need to keep them? A: The IRS generally has three years after the due date of your return (or the date you file it, if later) to initiate an audit, so you can toss many of your tax records after that time has passed. But you should keep some records even longer, and it's a good idea to hold on to your tax returns indefinitely. Here's how long you need to keep your tax records—and when you can send them to the shredder. After One Year You can shred pay stubs after you've checked them against your W-2s, and you can generally shred monthly brokerage statements after they match up with your year-end statements and 1099s. After Three Years Keep the following documents with your tax files for at least three years after the tax-filing deadline: Form W-2s reporting income Form 1099s showing capital gains, dividends and interest on investments Form 1098 if you deducted mortgage interest Canceled checks and receipts for charitable contributions Records showing eligible expenses for withdrawals from health savings accounts and 529 college-savings plans Records showing contributions to a tax-deductible retirement-savings plan, such as a traditional IRA After Six Years The IRS has up to six years to initiate an audit if you've neglected to report at least 25% of your income. For self-employed people, who may receive multiple 1099s reporting business income from a variety of sources, it can be easy to miss one or overlook reporting some income. To be on the safe side, they should generally keep their 1099s, their receipts and other records of business expenses for at least six years. Special Situations You'll need to keep some records for as long as you hold the investments, plus another three years after you sell. For example, keep records of contributions to a nondeductible IRA for three years after the account is depleted. You'll need these records to show that you already paid taxes on the contributions and shouldn't be taxed on them again when the money is withdrawn. Keep investing records showing purchases in a taxable account (such as transaction records for stock, bond, mutual fund and other investment purchases) for up to three years after you sell the investments. You'll need to report the purchase date and price when you file your taxes for the year they are sold to establish your cost basis, which will determine your taxable gains or loss when you sell the investment. Brokers must report the cost basis of stock purchased in 2011 or later, and of mutual funds and exchange-traded funds purchased in 2012 or later. But it helps to maintain your own records in case you switch brokers. (If you inherit stocks or funds, keep records of the value on the day the original owner died to help calculate the basis when you sell the investment.) Keep home-purchase documents and receipts for home improvements for three years after you've sold the home. Most people don't have to pay taxes on home-sale profits—singles can exclude up to $250,000 in gains and joint filers can exclude up to $500,000 if they've lived in the house for two of the five years prior to the sale. But if you sell the house before then or if your gains are larger, then you'll need to have your home-purchase records to establish your basis. You can add the cost of significant home improvements to the basis, which will help reduce your tax liability. See IRS Publication 523, Selling Your Home, for more details. For further information about how long to keep tax records, see the IRS's Recordkeeping fact sheet. Source: Kiplinger.com

Many people don’t quite know what to look for in an adviser. A Harris Poll found that more than a third of Americans don’t even know what a financial adviser does. Choosing the right financial adviser for your needs is crucial. It’s not just your money that’s at stake. Your ideal future is, too. Any good adviser will take as much time as needed to help you feel comfortable with their services. However, the best way to learn how your money will be managed and if you can trust your adviser is to ask questions. The Greek philosopher Socrates is quoted as saying, “The unexamined life is not worth living.” When it comes to finding financial help, I say, “The unexamined adviser is not worth hiring.” The caveat? You should also fully understand the answers to your questions before signing on the dotted line. Here are 10 questions we would ask and the reasons why. 1. What are all the costs and fees associated with investing? When it comes to investing, there are always costs. There are costs associated with owning investments, such as mutual funds and ETFs, as well as transaction fees for trading. If an adviser tells you there are none, proceed no further — except for the exit. The financial industry is creative when it comes to fees though, so this is a question you may need to ask several ways. Ask if you will be charged front-end or back-end commissions. Also, find out if any of the investments charge 12b-1 fees, which are fees charged by mutual funds to shareholders for marketing and distribution purposes. Essentially, these fees don’t directly benefit you, but instead lower your return. Remember, the more you pay in fees, the less you get in return. Some advisers also sell annuities. Be careful. Annuities are often wrapped in layers of fees. If you’re considering an annuity, ask for a complete summary of the fees, including any optional riders and benefits, mortality and expense charges, administration fees and investment fees. Further, make sure you understand the annuity’s surrender fee schedule. 2. How will you and your firm be compensated? The fact is, we advisers don’t work for free. Sorry. We charge for our services just like everyone else. The tricky part is that advisers can be compensated for their services in different ways. Some charge a flat dollar amount or a percentage of assets under management. Others are compensated by the investments they sell in the form of commissions and 12b-1 fees. This is an important difference. It’s better to have an adviser who is compensated for the work done for you and not for the investments sold. Advisers should not be compensated extra for making changes to your account or selling you more products. 3. Are you a fiduciary? Fiduciary is the highest legal standard to reach. It means those providing financial services are legally obligated to act in the best interests of their clients. Registered investment advisors (“RIAs”) are regulated under the Investment Advisers Act of 1940, which binds them to the fiduciary standard. This is a higher standard than the “suitability” standard that is followed by registered representatives, such as stockbrokers. Therefore, you should be aware that the advice you receive from one adviser to the next can differ depending on how they are registered. However, one thing to keep in mind is that advisers are technically not fiduciaries on the investments they don’t manage. For example, an adviser helping a client with an active 401(k) or providing advice on purchasing a car is not in those instances held to the fiduciary standard. When interviewing an adviser, ask what standard would apply to the investments he or she manages and any others you need help with. 4. Who’s your custodian? You should never be required to give the money you’re investing directly to a financial adviser. Think Bernie Madoff. Instead, there should be a third party, the custodian, who holds your account and the assets in it. This should be a reputable company that sends you regular statements and provides online access. 5. Are you credentialed? The financial industry is home to an alphabet soup of letters. Arguably, the three most respected sets of letters are CFP (Certified Financial Planner), CPA (Certified Public Accountant) and CFA (Chartered Financial Analyst). Advisers are required to undergo rigorous testing and continuing education to earn and maintain these designations. For personal finance help, look for a CFP. 6. How long have you been a financial adviser? Along those same lines, if applicable, you might also ask how long have you been employed with your company? Further, what’s your future look like? It’s good to know that your adviser has a history with a reputable firm and has every intention of sticking around. It takes time to build a trusted relationship, which is an investment on your part that you don’t want to go to waste if your adviser leaves in 12 months. 7. Do you have any disclosures? If your adviser has any rulings against him or her, it’s important to know what they are. You can also find this information on your own. Search through government websites such as the Securities and Exchange Commission’s Central Registration Depository and the Financial Industry Regulatory Authority’s BrokerCheck. Simply type the adviser’s name in the search field and you’ll find any past disciplinary action, registrations or licenses and educational and career histories. 8. How will you invest my money, and what’s your investment philosophy? You don’t necessarily need to know how the sausage is made, but you should be comfortable with what’s served to you on the plate. You and your adviser should come to an agreement on the appropriate asset allocation in your portfolio based on the level of risk you’re comfortable with and your long-term financial goals. You should also understand what types of investments your adviser recommends. Will your adviser use mutual funds and ETFs, individual securities, insurance products, etc.? And, how often might changes be made? Few investments perform well indefinitely, so it’s inevitable you will need adjustments in your portfolio from time to time. However, frequent investment changes can hurt more than help. Learning how often an adviser buys and sells investments will provide some indication of what you could experience. It’ll tell you whether he or she is trying to help your money grow over the long term or constantly trading in hopes of hitting a home run. 9. How often will we communicate? Perhaps you’ll need a lot of hand holding or want continued comprehensive planning. Or, maybe you just want someone to manage your money while you concentrate on living life to the fullest. Either way, make sure your new adviser will provide the level of attention you desire via written correspondence, phone, email and in-person meetings. 10. How will I fit in among your clients? The last thing you want from an adviser is to be treated as just another number. Nor do you want to have financial needs your adviser isn’t able to help you with. One way to get an idea of where you stand with your adviser is to ask how many clients he or she services. After all, there’s only so much of one adviser to go around. Further, ask how your account size and financial goals relate to other clients. Lastly, what other aspects of your financial life — beyond investing your money, planning for retirement, etc. — can you get help with. If you feel like small fish in a big pond with important financial needs unmet, then it’s a sign you need to find another adviser. Source: Kiplinger.com

Parents know all too well that getting food on the table doesn't come cheap. If you're not careful about your expenses, you might just blow a good portion of your paycheck on a routine stop at the supermarket. To help you figure out if you're overspending on food for your family, budgeting website Growing Slower created a monthly grocery spending guidelines chart. The guideline, which was shared by The Real Deal of Parenting Facebook page, uses data from the USDA's Cost of Food report to make recommendations for a thrifty monthly grocery budget based on family size. The chart starts with a family of one and goes up to a family of 11. For just a mom, dad and child, for example, Growing Slower suggests dedicating between $475 and $558 a month on groceries. For a family of six, the range is $768 to $999 per month. The chart can be seen here or below: Family Size (Total) Thrifty Monthly Grocery Budget 1 $200 - 227 2 $392 3 $475 - 558 4 $557 - 707 5 $633 - 882 6 $768 - 999 7 $870-1089 8 $1013-1216 9 $1166-1343 10 $1355-1442 11 $1543-1536   When the chart was shared on The Real Deal of Parenting's Facebook page, a lot of parents were surprised at how they actually spent less than the range given for their size family. Though, it's worth noting that a family of four that includes a toddler and a breastfeeding baby is very different than one that includes two voracious middle-schoolers. It's also not a complete science — it doesn't account for the cost of groceries in more expensive cities, and it doesn't account for extra spending on meals out of the house. So take it with a grain of bargain salt, and see if your family's spending is on track. Source: PopSugar.com