Downs Law Firm, P.C.
Downs Law Firm, P.C.
One of the great things about being retired is that you no longer have a job tethering you to a particular location. You have the freedom to move. However, just because you can pick up and go, doesn’t mean it’s a good idea to go just anywhere.
Since Social Security is a target, it is best to be prepared and to be protected. Unfortunately scammers are relentless and merciless. Theft from Social Security is increasing. One way to help prevent it, is to create your account now, according to Next Avenue in “Protect Yourself Against Social Security Identity Theft.” Opening your account can be considered as a preemptive strike against theft. The advice is relative, because everyone should go to the Social Security website and create an account, if they haven’t already. It’s a gateway to many online services from the Social Security Administration. If you don’t set up your account, there is a greater chance that someone can set one up using your name. One woman took this advice, since anyone who is older than 18 and has a Social Security number, and email and a mailing address, is allowed to open an account, even if they are decades away from claiming any benefits. However, within nine months of doing so, she received an email from the Social Security Administration saying they were deactivating her account. What happened? She hadn’t done anything. No one else, as far as she knew, had access to the account. Therefore, she called the Social Security Administration and requested a direct deposit block on her account. This did two things: it prevented changes to direct deposit information through a financial institution or through the Social Security website. It also stops anyone who might be trying to change a mailing address. Some further research resulted in information about what might have happened. The U.S. Public Interest Research Group website reports that with a name, birth date and Social Security number, a thief can try to open an account in your name and then change your direct deposit information to their checking account. It’s not that hard to gather that information online. A 2018 report from the Javelin Strategy and Research firm found that nearly 30% of Americans were notified of a breach of their accounts in 2017. That’s up from 12% in 2016 and cost $16.8 billion dollars. Scammers have shifted tactics. One consumer helpline reports that there have been fewer complaints about people impersonating IRS agents demanding money and an increase of complaints about people impersonating Social Security Administration representatives. How can you protect yourself? If you haven’t already done so, sign up for a “my Social Security” account. Check it on a regular basis to monitor your address information or date of birth. If you see any information that has changed or is wrong, contact the Social Security Administration immediately. If there’s any fraud or identity theft, you may also want to contact fraud hotlines at the Social Security Administration, Office of the Inspector General, the Federal Trade Commission and the Senate Select Committee on Aging. Reference: Next Avenue (Jan. 17, 2019) “Protect Yourself Against Social Security Identity Theft”
If you have found your niche, now its time to take advantage of it. Are you in your 50s and now have some disposable income? It is time to take advantage of retirement planning opportunities, according to the Sioux City Journalin “In Your 50s? Do These 3 Things to Plan for Your Retirement.” Unfortunately, many people who turn 50 start thinking now is the time to retire early, go on extravagant vacations or buy themselves big ticket items that they’ve always wanted. A better approach: consider this a time to make the most of your income, keep saving for retirement and stay on a steady course. Use the catch-up options available to you. The federal government knows that many people don’t have the means or the motivation to save for retirement until later in their careers. That’s why there are several provisions in the tax laws that let you catch up, once you reach 50. You can put away an additional $1,000 above the annual contribution limit to an IRA. You can add $6,000 in annual contribution to 401(k)s and similar employer-sponsored plans after age 50. Once you pass your 55th birthday, you can make an additional $1,000 annual contribution to health savings accounts. If you’ve got the cash to spare, these are great opportunities. Educate yourself about Social Security. Many people rely on Social Security for their retirement, while others use it as a safety net. You’ll want to start learning about the rules. When you take your first benefits has an impact on how much you’ll receive over your lifetime. Yes, you can start at age 62, but the difference in the amount you’ll get at 62 versus 70 is substantial. If you plan to keep working indefinitely, maximizing earnings is the best way to boost your Social Security benefits. Get access to savings in the early years of retirement. If you can afford to retire in your 50s, know when you can tap your retirement savings. If you’ve used regular taxable accounts to invest your savings, it won’t matter when you make withdrawals. However, if your money is locked up in 401(k)s, SEPs, IRAs and other tax favored accounts, you’ll need to know the rules. Penalties for taking withdrawals before the specified age, can take a big bite out of your retirement accounts. You may choose to work every day for another 10 years or 20 years once you’ve celebrated your 50th birthday, or start to back off. However, keeping these three key ideas in mind as you plan for the future, will help put you in the best financial state possible. If you are in your 50s, now is the time to meet with an estate planning attorney for advice on creating an estate plan that fits your unique circumstances. Reference: Sioux City Journal (Aug. 25, 2018) “In Your 50s? Do These 3 Things to Plan for Your Retirement”
Bad news in the media can spark people to take Social Security before it is gone. Claiming Social Security benefits early means a smaller monthly and lifetime benefit for you and likely for your surviving spouse, according to The Motley Fool tit in an article on a Gallup survey of retired and non-retired people in “Social Security: Why Claiming Early Could Be All the Rage Next Decade.” The Social Security Administration reports that 62% of retired Americans rely on their benefits for at least half of their income stream, with about a third of Americans relying on Social Security for almost all their post-working income.Only one in 10 people don’t depend on Social Security at all for income, when they are retired. Your retirement benefits are based on your 35 highest earning, inflation adjusted, years. To max out, you’ll need to have worked for 35 years. Years with zero income can impact your overall totals. Birth year is another factor. That determines your Full Retirement Age (FRA), the year that you become eligible to receive your full retirement benefit. Claim earlier, and you risk permanently reducing the monthly benefit by as much as a third. Claiming after your FRA could boost benefits by 32%. Most people do start claiming Social Security benefits before their FRA, for a variety of reasons. Sometimes it’s because they have lost their job, are over 60 and can’t get hired. Some people simply don’t know that the longer they wait to claim, the higher their benefits will be. What is clear is that 60% of retired workers in 2013 took their benefits between 62-64, with another 30% claiming between 65-66. One in 10 workers took benefits after their FRA. There has been a change in recent years. While more people are waiting longer to claim their benefits, fewer are waiting until their FRA. The reason is tied to the headlines. People are worried that Social Security is going to be cut, and they want to get the income they can while the agency is still fully funding benefits. The 2018 Trustees Report (officially, “The 2018 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds”) said the agency will pay out more than it collects in 2018, the first time this has occurred since 1982. The net cash outflow is expected to grow faster starting in 2020, and then by 2034, the $2.89 trillion in assets may be gone. Congress will need to act, or benefit cuts to all retirees will have to be made—by as much as 21%. Can anyone know what will occur between now and 2034? Congress could fix any concerns by passing a bill that solves the problem, and those who claim early will be left with smaller benefits. We also don’t know when we are going to die. The decision of when to claim must be made by each individual, based on their FRA, their other sources of retirement income