Retire VA 24 - 8

TAXATION OF BENEFITS
* Federal Taxes: Depending on your income, up to 85% of
your Social Security benefits may be subject to federal
income tax.
might be too aggressive for this stage in your
life. Everyone's growth needs and comfort
levels with risk are different.
* State Taxes: Some states also tax Social Security benefits.
Check your state's specific rules.
WORKING WHILE RECEIVING BENEFITS
* Earnings Test: If you work while receiving benefits and
are under FRA, your benefits may be temporarily reduced.
In 2024, the earnings limit is $21,240. Exceeding this
reduces benefits by $1 for every $2 earned over the limit.
In the year you reach FRA, the limit increases and the
reduction is $1 for every $3 earned over $56,520.
* After FRA: Once you reach FRA, there is no penalty for
working, and your benefits will be recalculated to give
credit for any months that benefits were withheld.
COST-OF-LIVING ADJUSTMENTS (COLA)
* Annual Adjustments: Benefits are adjusted annually based
on the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) to keep pace with inflation.
SPOUSAL AND SURVIVOR BENEFITS
* Spousal Benefits: A spouse can receive up to 50% of the
higher earner's PIA. Divorced spouses are also eligible if
the marriage lasted at least 10 years.
* Survivor Benefits: Widows and widowers can receive
benefits based on the deceased spouse's record, starting
as early as age 60 (or 50 if disabled).
MEDICARE AND SOCIAL SECURITY
* Enrollment: Medicare eligibility begins at age 65. If
you are receiving Social Security benefits, you will be
automatically enrolled in Medicare Part A and Part B.
APPLICATION PROCESS
* When to Apply: It's recommended to apply three months
before you want benefits to begin.
* How to Apply: Applications can be submitted online,
over the phone (you initiate the call) or at a local Social
Security office.
RESOURCES AND TOOLS
* My Social Security Account: Create an account at the Social
Security Administration's website to access your earnings
record, estimate future benefits and manage your benefits.
* Benefit Calculators: Use online calculators provided by the
SSA to estimate your benefits based on different scenarios
and claiming strategies.
5. Monitor spending trends: Track your spending
for six to 12 months after retirement to establish
a realistic long-term budget, as so much
can shift when you start retirement that your
spending in the first few weeks to months may
not be realistic for a longer term budget.
6. Address psychological impacts: While there
are many positives to retiring, challenges such
as identity shifts and the anxiety of spending
your savings can arise. If you want a third
party's help, there are financial therapists
available to navigate this time.
7. Consider responsible investing: If you haven't
explored sustainable, responsible and impact
investing due to a busy work schedule, retirement
is an ideal time to reassess your investment
alignment with your values. There are
resources available to help you invest responsibly
and make a positive impact.
Andrew Hudick and Eden Bowen of Fee Only
Financial Planning in Roanoke have six starterrules
for those wanting to manage investments.
Herewith:
1. Keep it simple. No-load index mutual funds or
ETFs. Good diversification, low management
fees, long-term positive records.
2. Buy individual bonds. Low cost and a defined
maturity date should match your goals for the
funds you are investing.
3. Low cost. See 1 and 2 above.
4. Invest consistently and periodically and start
today. Even if you have procrastinated, today
is the day to start.
5. Do not invest in anything you do not understand
and cannot be explained in three sentences
or less.
6. Diversify. Think about diversification in terms
of your total net worth. How much of your
wealth is concentrated in real estate, other
hard assets or in one company/industry?
Managing investment risk is important and
oftentimes an afterthought.
And if any of this is all too confusing, consult with a
financial planner. It's not that expensive when you
consider what you receive in expertise. I
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Retire VA 24

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