News and information for current and future retirees.

What 4 Big Social Security Changes Should You Know About

Although it’s a slow-moving train, Social Security changes a little every year. Here are four things that you should know about:

1) Retirees will get a raise. 

Those receiving benefits get a Cost-of-Living
Adjustment every year based on the consumer rate of inflation. It’s 1.3% for 2021.

2) The Social Security rate is unchanged, but amount subject to taxes is higher. 

“The 7.65% tax rate is the combined rate for Social Security and
Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes.” In 2021, the amount of income
subject to Social Security taxes is $142,800, up from $137,700 in 2020.

3) The “full” retirement age is slightly higher this year. 

Based on your birth year, Social Security pays what they consider to be full or normal benefits at varying times. If you were born from 1943 to 1954, you have a full/normal retirement age of 66. Born between 1955 and 1959? You get full benefits two months
later per year. Full retirement age is 67 for those born in 1960 or later.

4) The Social Security earnings “penalty” is slightly lower.

Let’s say you’re still working, but collecting Social Security and you’re not at full retirement age (see above). Social Security will levy a tax on your earnings, which reduces your benefit. Now the cap for income subject to tax is higher: In 2020, retirees could
earn up to $18,240 before payments began to shrink. The cap is $18,960 annually for 2021. What Social Security doesn’t advertise much is the fact that you don’t have to take benefits at your normal retirement age. If you can wait until 70, “ delayed
retirement credits” kick in that can raise your monthly benefit by as much as 8% per year.


Here Are 3 Ways for Retirees to Trim Costs, Not Lifestyle

There are many ways retirees can save real dollars by reviewing current costs and scoring tax credits, among other things. 

Property taxes. 

Municipalities issue new property tax assessments every few
years, and homeowners who believe their property value assessments are too high should consider an appeal, says Kojonen. Start by researching current market valuations. He says sometimes Realtors will run market assessments of nearby properties to give homeowners a sense of their home’s value. Homeowners can also check out real-estate websites
such as Zillow, Redfin, and Eppraisal for estimates.

These estimates can be provided as evidence to the county assessor that the property is overvalued, or they may confirm that the property is indeed valued properly or even undervalued. In latter cases, the homeowner may not want to contest the original assessment. When homeowners contest assessments, the county will rerun its analysis, which may result in a higher valuation and thus tax burden. “You don’t want it
to backfire on you,” he says.

A successful appeal could shave off a few hundred bucks off property taxes, and that reduced assessment is in place until the county recalculates values.

“It’s not just the initial savings, but it’s going to be long-term savings as well,” Kojonen says.

Home improvements. 

Retirees who are remodeling their homes or are ready to downsize to a smaller home can take advantage of energy-efficiency tax credits, says Susan Carlisle, an accountant at CDW CPAs. Several federal and state-level tax credits exist for energy home improvements, she says. And not only do homeowners reap a tax credit, but buying more energy-efficient appliances or home systems may also cut down on future energy bills, she adds. The federal Energy Star program continues through the end of the year and are tax credits are available to homeowners. Buyers receive a credit of 10% of the cost of the item, up to $500, or a specific amount from $50 to $300.

In late December, Congress extended and increased the federal personal tax credit to 2023 for homeowners who want to install renewable-energy systems in their homes, available for new construction or existing residences.

Homeowners can nab a 26% tax credit for several types of renewable-energy systems like solar panels and geothermal systems, among other things. All 50 states offer some sort of clean-energy policies and incentives for both residential and commercial users. The N.C. State University’s Clean Energy
Technology Center maintains an up-to-date database and it can be searched by ZIP Code. 

Retirees who need to remodel their homes for medical reasons can look into income tax deductions. The cost of modifying bathrooms, lowering cabinets, widening doors and other home improvements deemed medically necessary can sometimes be deducted from taxes, but there are rules to follow.


Near-retirees and retirees should review all of their current
insurance policies as it’s likely they can drop or change some to save money.

Retirees who no longer work can eliminate disability insurance and pocket those savings. If retirees have no mortgage, few debts and plenty of retirement savings, Kojonen says often life-insurance policies can be canceled. Take time to review home and auto insurance policies, too. Many people may bundle these two options together, but it pays to shop around, especially if the
policy holder hasn’t switched in a while. Sometimes, loyalty to insurance companies can work against policy holders.

“Different brands count on having loyal consumers, but they don’t always reward them for that. They may feel that that’s a revenue source that they can count on without having to offer huge discounts or whatever,” says Penny Wang, deputy editor, money at Consumer Reports.

She noted that 22% of Consumer Reports members who responded to the magazine’s 2018 auto insurance survey said they switched insurers in the past five years, and 62% of them said they found a better price.

Additionally, consider other ways to cut costs with current carriers, such as rethinking comprehensive and collision coverage on a car that’s several years old, she says, and ask for untapped discounts, including ones for anti-theft features, affinity group membership (such as an alumni association or union), the taking a            defensive-driving training course.


4 Signs You Need Long-Term Care Insurance

Age, chronic illness, or injury may debilitate you at some point in your life. It pays to know the warning signs and indicators that you may need long-term care insurance.

Here are some signs that it may be wise for you to consider purchasing long-term care insurance.

1. You are older than 55.

Although many people in their late fifties and sixties are healthy and lead robust lives, people tend to become weaker and more prone to illness as they age and aging increases the odds that long-term care will be required.

It is important to note, however, that it becomes more difficult to qualify for a long-term care policy the older you get. This is because the insurance company may perceive you as too high of a risk (find out How an Insurance Company Decides to Insure You). Therefore, it’s prudent to look into long-term care insurance while you are still healthy and young enough to qualify. Ideally, you should start shopping for a policy when you are still well under 70.

Applying in your mid-fifties pays since developing a significant medical issue alone can disqualify you for coverage. What’s more, rates tend to be lower the younger you are when you buy.

2. You have a family history of debilitating illness.

People with debilitating illnesses, especially elderly people, may need a lot of help on a day-to-day basis. Those suffering from Alzheimer’s, in particular, require a substantial amount of long-term care—in fact, it could mean long-term care for the rest of your life.

Whether it’s due to Alzheimer’s, cancer, or another serious condition, daily tasks like food preparation, getting dressed, and taking a walk may all require the supervision or assistance of a professional personal care worker.

The rates for professional care workers can be as high as $20 an hour. On a long-term basis, this expense adds up extremely quickly. Fortunately, long-term care insurance can help offset many of the associated costs.

3. You don’t have any children.

Many people who fall ill or who otherwise become disabled in old age rely on their children to help them with the long-term care they require. Some will even allow their parents to move in so they can be provided with round-the-clock help and supervision. Children can help with cleaning, cooking, dressing, laundry, and other necessary household chores.

If, however, you don’t have any children, or your children are not in a position to help you, then you may end up needing long-term care from others. Most people don’t like to think about such a situation, but without children, being left without the care you need is an even greater risk.

4. You work (or worked) in a dangerous field.

If you are working or worked in a job that exposed you to considerable health risks, then you may have an even higher chance of needing long-term care in the future. The greater the probability, the greater the need for long-term care insurance. Occupations in coal mining, asbestos removal, boxing, or others involving exposure to hazardous materials or physical threats can correlate to a higher risk of developing illnesses like mesothelioma, lung cancer, brain-related issues, and more.


The Best Small Town in Every State

The heart of many states exists in the small towns, where you’ll find industrious locals, unique experiences, and a slower pace that makes breathing a little easier. 

Fairhope, Alabama

Located on Alabama’s Golf Coast, Fairhope has beautiful views of Mobile Bay. With a population of 22,600 people, this town is a great respite from the hustle and bustle of city living. Shop, dine on seafood, and watch the sunset at Fairhope Pier. You may want to time your visit to one of the annual festivals or events like the Fairhope Arts and Crafts Festival, Outdoor Art Show, or the Fairhope Film Festival. Make sure you take a gander of the Fairhope French Quarter where you can relax and listen to great music.

Sedona, Arizona

This desert town is one of the most beautiful destinations in America. With red rock buttes, craggy canyons, and copious amounts of hiking trails, you’ll find much to photograph here. Jeep, helicopter, and hot-air balloon tours are also popular in this area. Visit Red Rock State Park, peruse the handmade art and jewelry at Tlaquepaque Arts & Crafts Village, and opt for a spa treatment at any one of the renowned wellness centers. Sedona, with a population of 10,300 people, is ideal for those who want to relax or be active in the outdoors.

Snowmass, Colorado

Whether you visit in the warmer months or when the snow is falling, there’s much to explore in Snowmass, Colorado. From hiking to mountain biking to hot-air ballooning in the summer to world-class skiing and snowshoeing in the winter, everyone will find something of interest to do here. Maroon Bells is a popular hike, even among the town’s 2,770 residents, and you can start the adventure at the Maroon Bells Visitors Center. Stay at the Limelight Hotel Snowmass, where you’ll have easy access to seasonal adventures and any equipment and gear you may need.

New Castle, Delaware

New Castle, with a population of 5,520 people, is home to First State National Historic Park and you’ll see plenty of brick buildings flanking cobblestone streets in this colonial town. Explore the Delaware History Trail, stroll the Farmers Market, and visit the New Castle Historical Society’s three buildings: The Amstel House, The Dutch House, and The Old Library Museum. Delaware is the second smallest state, after Rhode Island, yet there is much to explore.

Galena, Illinois

Galena is ideal for a couple’s vacation or a girl’s getaway trip. Numerous wineries, distilleries, and breweries call this midwestern town home, including Galena Brewing Company, Galena Cellars Vineyard and Winery, and Blaum Bros Distilling Company. Visit Carl Johnson’s art gallery, learn about pottery at Artists’ Annex, and view regional art at Galena Center for the Arts. Finally, tour Ulysses S. Grant’s home (the 18th President) and stop in the Galena History Museum.


On the Bright Side

Some large employers suspended matching contributions to retirement plans last year, but this was only temporary for many of them. Studying 260 such companies, consulting firm Towers Watson reports that 75% have already restored employer matches, with 74% matching at the same level they did before the arrival of the pandemic.*

Source: MarketWatch, December , 2020

Did you know?

Looking for the tallest mountain on earth? Try Hawaii.

Mt. Everest, at the border of Nepal and Tibet, is generally ranked as the world’s highest peak, towering more than 29,000′ above sea level. Hawaii’s Mauna Kea volcano, however, is in one sense even grander. While Mauna Kea rises 13,796′ from the shoreline, it actually measures 32,808′ from its base on the floor of the Pacific Ocean.*

Source:, December 15, 2020

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