Retirement Starts Today

We've all been sitting at home for the past year and now everyone is getting the travel bug. That's why today we're kicking off the Summer Travel Series with an interview with Lee Huffman. Lee hosts a podcast called We Travel There and he writes a frugal travel blog at BaldThoughts.com. I've been curious about the world of travel hacking, so I have plenty of questions for Lee about using travel points, how to find the best travel resources, and, of course, where to travel. Check out this interview to help you plan your summer vacation.

Outline of This Episode

• Where should we get started?
• What should one look for in travel points?
• How saving miles and points are like saving for retirement
• The go-to resources to use
• Places to check out

How should we all get started traveling again?

The pandemic has left many of us homebound for over a year, so now that many people are fully vaccinated, everyone is ready to get on the road again. The big question is: how should we get started?

Lee recommends using the travel credits that you may have accrued from canceled vacations over the pandemic. Those credits and vouchers may have expiration dates, so be sure to check the fine print to ensure that you don't lose out.

He also suggests getting your summer trips booked ASAP. The sooner you book, the sooner you'll be able to find reward availability and lower prices. The more people begin traveling the higher the prices will rise.

What about international travel?

Travel within the U.S. is on the rise, but people are also itching to travel internationally. Since the vaccine rollout has been different in each country, it is important to carefully investigate the specific travel rules for the country you wish to go to. Each country has its own pandemic rules and regulations. Some countries require negative Covid tests upon arrival and others may require you to be fully vaccinated. It is also important to remember that if you travel internationally, you will need a negative Covid test to enter the U.S. again, regardless of your vaccination status. Listen in to hear how many hotels in Mexico are helping travelers with this requirement.

What are the best ways to earn points?

You can earn travel points and rewards even when you are not traveling by using a credit card. Lee recommends the Capital One Venture Rewards card to get started. You can get cash back or earn extra miles with each purchase that you make. Listen in to hear how you can get started with the Capital One Venture rewards program to start traveling this summer.

Lee compares saving miles and points with saving for retirement. He states that the two best days to start saving your miles are 10 years ago and today. He also mentions the importance of using your miles periodically. You don't want them to become devalued over the years.

How to use your travel miles

There are more ways you can earn travel miles than just making purchases. There are apps that you can use like Dosh to help you earn extra miles on each transaction.

If you have had a travel rewards card for years but find it difficult to use, you won't want to miss this interview with Lee Huffman as he explains how you can best use your hard-earned miles. He not only mentions how to use your miles, but he also includes fantastic resources that you can check out to help you find availability so that you can actually use the points that you have accrued.

Make sure to check out Lee's podcast, We Travel There, to get inspiration for your next travel destination. He interviews locals to help his listeners understand how to get there, where to go, what to do, how to get around, and where to stay.

Resources & People Mentioned

• Dosh rewards app
• Juicy Miles - app for redeeming rewards.
• Capital One Venture Rewards card
• Frugal Travel Facebook Group with Holly Johnson

Connect with Lee Huffman

• BaldThoughts.com
• WeTravelThere.com

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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What is the number one travel goal for people approaching retirement? Disney! People young and old alike love to go to Disney. In my 15 years of retirement planning, I have discovered that a multi-generational trip to Disney is at the top of most people's bucket lists. That is why I have brought the world's foremost expert on Disney travel, Lou Mongello, on to Retirement Starts Today for an interview. Lou and I discuss all things Disney: the must-see attractions, when to go, how to plan, and what is so special about Disney.

Outline of This Episode

• [1:52] What's so special about Disney?
• [4:29] What are the must-see attractions?
• [8:45] When to go
• [12:53] Plan in advance
• [15:56] Lou's favorite thing at Disney

What's so special about Disney that everyone wants to go there?

Since Disney is the number one bucket list item for many people there must be something extra special about it. When I ask Lou why it is so special, he is unable to quantify this phenomenon. He chalks it up to the way Disney makes us feel. If you have been, you know what he means.

One way that Disney is able to give us those warm fuzzy feelings is with its customer service. Disney's level of service is unparalleled. They always go beyond expectations which is why everyone remembers Disney with such fondness. No other place in the world enjoys such a level of brand loyalty.

What are the must-see attractions?

There is so much to do at Disney. In Orlando, there are not only the 4 main theme parks but there are water parks and resorts to enjoy as well. It can be challenging to figure out what to do when there is so much to choose from.

There is something for everyone at Disney. Lou recommends the classics from Magic Kingdom in addition to some of the newer attractions. Grandma and the littles are sure to enjoy It's a Small World and the Jungle Cruise. The Haunted Mansion is another Magic Kingdom classic. At Hollywood Studios, the Tower of Terror and Rock n Roller Coaster are fun for the thrill-seekers in the family. And Frozen and Toy Story are hits with the kids. The Animal Kingdom safari also brings joy to the entire family.

When to go?

When planning your Disney vacation it is you'll need to consider when to go. This will depend on your family's schedule, but there is more to consider. Disney has different travel seasons. The peak season includes major holidays and summer. The off-peak times are the rest of the year. During the off-peak times, you can find values on food and lodging prices.

One tip to use while planning your Disney vacation is to use a Disney travel agency. Many don't realize that Disney agents are free to the consumer since they get paid by Disney. When planning your Disney vacation make sure to take advantage of these experts. They can help you make the most of your holiday.

What is the best age to go to Disney?

There is no bad age to go to Disney. There is so much to do that appeals to every age group. That is what makes Disney such a great multigenerational vacation getaway. Not only is there something for everyone, but there is a wide variety of accommodations and food choices. You can customize your vacation to your family's specific wishes. The most important thing to do is plan ahead. Much like financial planning, planning before you go to Disney will ensure that you get the most out of your family holiday.

Resources & People Mentioned

• Stacking Benjamins

Connect with Lou Mongello

• Lou Mongello on Facebook
• Lou's podcast - WDW Radio
• LouMongello.com

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
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Since travel is on many soon-to-be retirees' must-do lists I have created this summer travel series with various travel experts. Danielle Desir from the Thought Card podcast joins me today to discuss how to travel to any destination on a budget. Recognized by Flight Network as one of the best travel hackers in the world, Danielle has figured out how to travel to bucket-list destinations on a dime. Are you ready to learn how to plan your next big trip on any budget? Listen in to discover how.

Outline of This Episode

• Danielle's journey to bucket list budget travel
• Identify the things that you value
• Take an individual approach
• Danielle's top destinations
• How to choose to repeat a destination
• Jet lag tips
• Where to learn more about travel hacking with Danielle

If you're on a budget, don't settle for inexpensive destinations, think big!

Many people think that if they are on a budget they can only travel to budget-friendly places, but Danielle Desir takes a different approach. As a travel hacker, Danielle has learned how to make travel to bucket-list destinations more affordable. She describes using an abundance mentality as a way to make affordable travel work. She recommends getting creative when planning, "take what you have and make it work."

Identify what matters to you

The first step in becoming a financially savvy traveler is to identify what you value in travel. Is it important to you to be comfortable on a flight? Do you like to eat out and try the best local cuisine? Do you want to see everything you can in one location? Do you prefer luxury accommodations?

Once you have identified what the most important aspects of travel are to you then you will understand where you can be flexible in your spending. If eating out isn't important to you then you can save money by packing a sack lunch each day. If a fancy hotel room isn't important then you could save money by staying in a hostel or an inexpensive Airbnb or motel.

Understanding what you value in travel will help you save money and ensure that you have an amazing time on your trip.

Make a game of saving money

Another way to save money is to gamify your planning experience. By making a game of saving money you can compete with yourself to see how much money you can save each time you travel. You can cut costs in a variety of ways by looking for inexpensive accommodation, saving on flights, or by using travel points. Gamifying your travel costs allows you to get creative and save more.

Communication is key when it comes to couples' travel

When traveling with your significant other it is important to take into account what they value as well. Make sure to communicate with them so that you are both on the same page. They may value different things about travel so it is important not to skimp in the areas that matter to them.

You should also be understanding of your partner's travel experience. There may be one partner that is more travel savvy than the other. That means that the travel-savvy partner needs to be patient and explain the importance of the things that you do to save money when traveling.

It is also important to remember that traveling in retirement will be much different than traveling for work. You are out there to have fun. Listen to this episode with travel expert Danielle Desir to hear how you can travel to any destination affordably.

Resources & People Mentioned

• Boomer Benefits

Connect with Danielle Desir

• Thought Card Podcast
• How To Save Money In Iceland
• How Much Does A Four Day Trip To Iceland Cost
• Iceland: Nature, Nurture and Adventure

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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Now is a great time to start financial and tax planning for the next year. To do so, you must first look at any changes that were made to tax laws. We'll do that by exploring 2 articles from Forbes and CNBC which take a closer look at any imminent changes to the tax code.

Then we'll dive into the main segment with an article from Investment News which claims that fewer retirees are claiming Social Security at age 62. Listen in to hear if there will be any tax and retirement planning changes that affect you and to hear why fewer people are claiming Social Security early.

Outline of This Episode

• [1:42] Changes in tax planning for 2022
• [5:12] Changes in retirement savings plans for 2022
• [8:08] Fewer retirees are claiming Social Security at 62

Tax updates from Forbes

Despite all the news media clamoring that there might be significant tax changes in 2022, there haven't been many changes. According to an article from Forbes, marginal tax rates will rise slightly. The standard deduction will rise to $12,950 for individuals and $25,900 for married couples filing jointly. Capital gains rates remain unchanged for the next year, however, the brackets moved slightly to keep pace with inflation. Unfortunately, the charitable deduction that was available to nonitemizers in 2021 did not carry over to 2022. The SALT tax cap could possibly increase from $10,000 to a significantly higher number, but as of this recording, it is not yet official.

Retirement plan changes in 2022

Do you max out your 401K? I'm always shocked when I realize how few people actually maximize their savings. Only 8.5% of workers save the maximum allotted amount.

Even though the vast majority of people do not max out their 401Ks, savers will have the opportunity to save even more next year. The employee contribution limit for tax-deferred retirement savings plans will increase to $20,500 which is up $1,000 from 2021. On the other hand, Roth IRA limits will remain unchanged at $6,000.

So despite the dramatic headlines in the financial media earlier this year, very little has changed for tax and retirement planning from 2021 to 2022. We'll keep you posted if anything new arises.

Fewer retirees are claiming Social Security at age 62

If you are curious about the effects of the baby boom consider this: the number of men who turned 62 has more than doubled between the years of 1997 and 2019. This shocking number makes it easy to be fooled by the number of people who claim Social Security early since the number of people who claim Social Security has risen, but when you look at the percentage of people who claim early the statistics have declined greatly. According to a study at Boston College by the Center for Retirement Research (CRR), the percentage of 62-year-olds who claim Social Security early at age 62 has decreased in the past 20 years.

How has the Covid pandemic affected Social Security claiming age behavior?

Although we won't have hard data for another year, it looks like some older workers who lost their jobs may have turned to Social Security to help make ends meet. Early evidence shows that the effects of Covid have not pushed large numbers of people into early retirement. This could be because those most affected cannot afford to stop working.

I'm encouraged that folks are waiting to collect Social Security and in doing so growing the guaranteed income portion of their retirement income. Hopefully, this is due to retirees actively making the decision to defer, rather than deferring because they are having to work longer. Whether it is planned or unplanned, deferring will result in a larger benefit for those retirees.

This is our last original episode of 2021 so that I can spend more time over the holidays with my family. We'll close out the year with a list of my favorite episodes from 2021. Enjoy the holiday season, and we'll meet again in 2022!

Resources & People Mentioned

• Forbes tax article
• CNBC tax article
• Investment News article

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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Have you ever filled out a questionnaire at your financial advisor's office? If you have, it was probably a risk tolerance questionnaire. I have my own opinions about them, but you'll have to wait until the end of this episode to hear what it is.

On this episode of Retirement Starts Today, we'll explore an article from AdvisorPerspectives.com written by Dr. Wade Pfau and Alex Murguia which argues that risk tolerance questionnaires (RTQs) don't work. You'll hear new retirement slang and acronyms as well as a discussion of retirement income sourcing.

Dr. Pfau has also developed his own tool to use that can help you select the best deaccumulation approach. Don't forget to stick around until the end to hear my thoughts.

Outline of This Episode

• [2:22] How risk tolerance questionnaires are used
• [5:45] The different approaches
• [10:35] Two different styles
• [12:58] My personal criticisms of risk tolerance questionnaires

What are risk tolerance questionnaires used for?

RTQs are a tool that help financial advisors identify the amount of volatility that clients can handle in their investment portfolios. These tools generally consist of 9 questions and they are designed to establish a baseline so that the advisor can rank the investor on a scale of 1-5 from conservative to aggressive. These documents are especially helpful for advisors to stay compliant as they choose portfolio recommendations.

Why retirement investing is different

RTQs work best in the accumulation stage of people's lives, but when it comes to retirement they fall flat. In retirement, a person must shift their way of thinking from accumulation to decumulation and this can be a challenging adjustment in mindset. Viewpoints on funding daily expenses inevitably change when one is completely dependent on living off one's investment capital without the luxury of human capital to cushion the blows of a bear market.

Retirement brings added risks

In addition to a change in mindset, there are unavoidable spending shocks that arise in retirement. This means that retirees need to consider how much of their assets they need to keep on hand for these unexpected events and market downturns.

Not only are there the everyday expenses that come along, but retirement brings on further risks. There is constantly the risk of outliving your money and becoming a burden to others since no one knows their own longevity. Another retirement risk is lifestyle risk. To maintain a comfortable lifestyle in retirement it is important to ensure enough discretionary income to fully enjoy retirement.

Why RTQs don't work

RTQs work better for people in the accumulation stage of life because they weren't designed to handle the broader questions that retirement brings. They can play a small role in helping to decide asset allocation, however, they cannot be used in place of a retirement plan.

It is important to come up with a retirement income strategy based on goals first. By beginning a retirement plan with a questionnaire you end up boxing yourself into a strategy that may not be in alignment with your ultimate retirement goals. Listen in to hear why I think RTQs are a poor excuse for proper retirement planning.

Resources & People Mentioned

• Boomer Benefits
• Why Risk Tolerance Questionnaires Don't Work for Retirees
• The Mullet Episode
• BOOK - Paychecks and Playchecks by Tom Hegna
• Wade Pfau's Retirement Researcher blog
• The American College

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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Do you let news headlines affect your choices? The Center for Retirement Research at Boston College wanted to learn more about this question, so they conducted a study to find the answers. In this episode of Retirement Starts Today, we'll take a look at the findings of this study and analyze how people's misconceptions can influence their life choices in retirement. After checking out the retirement headline, I'll clarify a Rule of 55 question from Dave. Listen in to hear how headlines may be affecting your decisions.

Outline of This Episode

• [2:32] Media coverage of Social Security could affect claiming age
• [7:21] Don't let scary headlines plan your retirement for you
• [9:40] A tricky Rule of 55 question from Dave

Do sensational headlines affect people's retirement decisions?

I found an article written by Emile Hallez at Investment News titled Media Coverage of Social Security Could Affect Claiming Age which piqued my interest since, as a financial advisor, this is exactly what I don't want to hear.

In this age of social media, we are used to immediate gratification which means that many people don't dig past a news story's headline to learn more. The Center for Retirement Research at Boston College studied this phenomenon in relation to Social Security benefits and retirement age. Articles on Social Security often emphasize the trust fund depletion date which leads people to believe that the entire Social Security system is insecure.

Check out the episode where we recently reviewed an article similar to the ones shown in this study.

How did people react to the experiment?

To analyze how people reacted to headlines, researchers showed several types of headlines on Social Security to participants and then asked them a series of questions about their confidence in the Social Security system. The researchers studied how the type of headline affected people's decisions regarding their own retirement plans.

They discovered that workers shown headlines that emphasized the Social Security depletion date decided to claim Social Security a year earlier than those in the control group. Learn more about how the study was conducted and the results by pressing play.

Don't let alarming headlines plan your retirement

A careful retirement plan should be created based on what is right for you and your family. You'll want to consider your financial future in the long term and how it will affect your life. Shocking headlines incite many to act on fear, but this would be short-sighted. Once you have a retirement plan in place, you can refer back to it when making any decisions about your retirement rather than a knee-jerk reaction.

Rules of thumb for claiming Social Security

If you are listening to a retirement podcast, hopefully, you aren't easily swayed by sensational Social Security headlines, but how should you plan on claiming Social Security? If you are married then I suggest deferring the larger benefit for as long as possible. You can collect the smaller benefit whenever you need the income. By deferring the larger benefit, you will be deferring income longer which will leave room to do Roth conversions if needed and the larger benefit will grow to serve the spouse that lives the longest. It doesn't matter who earned the larger benefit because upon the first death the smaller benefit expires and the larger one continues.

Resources & People Mentioned

• Media Coverage of Social Security Could Affect Claiming Age
• Episode 210 - The Social Security Update
• Forbes article on the Rule of 55
• Check out Boomer Benefits for your Medicare needs

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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Our chances of death are 100%, so that means at some point in your life you will probably experience the death of a loved one, and you'll need to prepare for your own passing. Choosing the right executor can make a traumatic time more bearable. The role of executor is not an easy one, which is why it is important to choose wisely.

In this episode of Retirement Starts Today, you'll hear an interview with executor expert, David Edey. David has recently written a book titled How to Pick an Executor and Avoid Family Fights. After listening to this interview you'll be able to choose and become an exemplary executor.

Outline of This Episode

• [2:32] How to prepare your executor
• [4:37] Should you hire a 3rd party or ask a family member
• [10:15] How to be the world's best executor
• [15:34] More about David's book

What you can do to prepare your executor

David learned how to be a rock star executor from his own challenging family experience. It took him 7 years, 10 court appearances, and $50,000 in lawyers' fees to settle his parents' estate and they both had a will!

Everyone seems to know someone with an executor horror story which is why he decided to write his book. David wants to teach others how they can choose or be a fantastic executor.

If you ask someone to become your executor, you must ensure that they have all the tools they need to perform their duty. Make sure to have an up-to-date will in place. Talk with your beneficiaries so that they know what to expect when the time comes. Your digital assets and files should be organized and easily accessible. No one wants to be looking around for missing paperwork when they are dealing with the loss of a loved one. Make it as easy as possible for the executor to get the job done.

How to choose an executor

Families can fall apart when it's time to settle an estate which is why it is important to carefully choose an executor. You could choose a family member, a friend, or a third party. If you choose to hire a third party there will be many fees involved. If you choose one of your children over another it is important to communicate with both the chosen executor and the other children to ensure that you help to keep the family harmony after you pass.

There is no one right way to choose an executor, but you should consider the health and age of the chosen executor. It is important to choose someone who can keep the dynamic that you want to set for the estate and that can get the job done.

How to be a fantastic executor

If you have been chosen to be an executor you need to ask plenty of questions. It is important to understand where important documents, passwords, and information are. Insist that the will is up to date and that everything is labeled in an easy-to-find location. David's book has a wealth of resources that can walk you through the process of being an executor. He explains the protocols for shutting down social media, bank accounts, and other online accounts. You can also check out David's Executor Help podcast.

Family dynamics can fall apart when a loved one passes. Doing the proper preparations for your passing may be challenging now, but it will pay off in the long run. Doing so will ensure that you leave a legacy and not a mess.

Connect with David Edey

• How to Pick an Executor and Avoid Family Fights
• Executor Help podcast
• Executor Help on Facebook
• @DavidEEdey on Twitter

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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If you are like many Americans who watch the news, inflation is probably on your mind. Since the Covid 19 pandemic began costs have been rising. We are still facing the effects of the supply chain breakdowns brought on by the pandemic in addition to extreme worldwide weather events.

These events have led to an increase in the price of goods on everything from fuel to food to lumber. This type of inflation can be stressful for the average working family but even more worrisome for those on the cusp of retirement.

Listen in to hear the latest Social Security news and learn how you can combat rising costs. Make sure to scroll down to the bottom of the show notes to access all the links mentioned in this episode.

Outline of This Episode

• [2:52] Good news about Social Security
• [4:26] How COLA is calculated
• [5:40] COLA may not be enough to keep up with inflation
• [9:28] What can we do to hedge for inflation?

Recipients of Social Security are getting a raise

If you are already retired and receiving your Social Security benefits, I have good news! The annual cost of living adjustment (COLA) will increase by 5.9% in 2022 which will boost the individual income of recipients by about $92. This is the largest increase in Social Security benefits since the 7.4% augmentation in 1983.

Over the past decade, the rise in COLA has been negligible, only averaging 1.65%. This minimal increase is due to the way COLA is calculated. This calculation is based on the change in prices of a market basket of goods as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW).

Even with next year's close to record-breaking increase, COLA may not be enough to truly combat inflation.

Are yearly inflation adjustments to Social Security enough to truly keep up with inflation?

Despite yearly inflation adjustments, Social Security benefits have decreased their buying power by 32%. Even though COLA has increased benefits by 55% since 2000, senior citizens' expenses have actually increased by 104.8% over this same timeframe.

This ThinkAdvisor article has a photo slideshow that illustrates 10 costs that older Americans have seen risen over the past 20 years.

The article cites The Senior Citizens League (TSCL), an advocacy group, which is trying to change the way COLA is calculated. While TSCL supports legislation that could modestly increase COLA, you won't want to wait for Congress to ensure that you can maintain buying power in retirement.

What can we do to hedge for inflation in retirement?

Buying (and holding) stocks in the best companies in the world is the best way to hedge for inflation. The best companies in the world will hire the best employees in the world, and together they will figure out how to find efficiencies and raise prices which will provide you with positive returns and an increasing long-term share price, regardless of inflation.

An allocation to 50-70% stocks should be plenty to keep your portfolio growing, which will grow your account balances over the long term and allow you to increase your monthly distributions. With this kind of diversified portfolio, you'll be able to use your cash and bonds to weather the storms and ride out bumpy markets.

How are you planning to combat inflation in your retirement plan?

Resources & People Mentioned

• 10 Fastest-Rising Costs for Older Americans Since 2000
• Our November 2020 Medicare series
• Boomer Benefits
• AARP Social Security Increase article
• Basket of Goods definition
• The Senior Citizens League

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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The end of the year is coming up right around the corner, and you know what that means: it's time for end-of-the-year tax planning! However, this year's tax planning may look a bit different with new tax legislation making its way down the congressional pipeline. Many wealthy individuals are nervous about what the current regime has in store for them. This is why when I saw the headline Tax Moves Advisors Should Be Making Before Year's End in Financial Advisor Magazine I knew I had to share it with my audience. If the news of the tax legislation has you worried, you won't want to miss this episode.

Outline of This Episode

• [2:22] It's time for year-end tax planning
• [8:53] Why you should donate to charity this year
• [12:44] How to offset future inherited income taxes
• [18:08] How a qualified charitable distribution could help with taxes

Do you have tax-change proposal fatigue?

Keeping up with all the changes in tax legislation over the past few years can be exhausting. It seems like once in a generation tax law changes happen every couple of years.

One of the most troubling things about new tax legislation is wondering when it will take effect. Will the new law come into play at the end of the year, or will the changes be retroactive? While this can cause a bit of worry there is no sense in speculating. There is only so much that you can do to prepare.

Realize more income now to be proactive about the potential tax law changes

While we have no idea what the future might hold, we can still have the presence of mind to plan ahead. One way to combat a hefty tax bill next year is to accelerate your income now.

For instance, if companies typically give bonuses at the beginning of the next year, they could pay those bonuses out in December instead.

Another way to realize more income sooner rather than later is to close any business sales before the end of the year to lock those earnings in under the current tax law.

Enter into deduction mode if you are close to retirement

If you are nearing retirement and you know your income will drop once you retire, you should be in deduction mode. Take advantage of HSAs and 401Ks rather than Roth IRAs to reduce your income and maximize your contributions between now and the end of the year

If your income decreases once you retire then you can start Roth conversions to mitigate the tax deductions you took when you had a higher income.

Year-end tax tips

If you file the standard deduction, don't miss out on the charitable deduction of $300 for singles and $600 for married couples.

If you are able to itemize your deductions and you are charitably minded, consider funding future years' charitable contributions through a donor-advised fund (DAF). If you have highly appreciated stock then you could use it to contribute to charity while also realizing a valuable tax deduction.

Another way to finish out the year is to anticipate your year's earnings so that you can fill up your tax bracket with Roth conversions. This is a great way to take advantage of the historically low tax rates.

Worrying about future changes won't help at all, instead, do what you can to take advantage of this year's low tax rates to prepare for an uncertain future.

Resources & People Mentioned

• Tax Moves Advisors Should Be Making Before Year's End

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
• Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter

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Do you wish that you could have a mulligan when it comes to taking your Social Security benefit? Once you file for Social Security, it seems like your decision is set in stone. But what if I told you that you have options to reverse your decision?

In this episode of Retirement Starts Today, we'll explore an Investment News article written by one of my favorite Investment News contributors, Mary Beth Franklin. This article provides options for those who have remorse about the timing of their Social Security claim.

In the listener questions segment, we'll discuss Jerry's question about his health insurance premiums under the Affordable Care Act and how they are affected by the 8.5% rule.

This episode is jam-packed with helpful retirement information, so press play now to continue your retirement education.

Outline of This Episode

• [3:02] 3 Social Security do-over options
• [8:25] Check out the Retirement Repair Shop podcast
• [9:24] Jerry's ACA insurance premium questions
• [13:50] Clarification on the ACA 8.5% rule

There are 3 ways that you could reverse your Social Security timing

Have you found yourself regretting the timing of your Social Security benefits claim? Maybe you wish that you had waited longer to receive a larger benefit or maybe your retirement timeline has changed based on the pandemic or other factors. If so, I have good news for you. There are 3 ways that you could reverse your decision.

There are many people that wish they could go back and change the timing of their Social Security claim, so if you are one of them make sure to listen to this episode to learn which choice might best fit your needs.

Withdraw your application

You may not realize this, but you can withdraw your Social Security benefits application. Use form 521 to do so, but keep in mind that there's a catch.

You'll have to repay any earnings you or your dependents have received. Withdrawing your application can only be done once, but doing so will allow you to apply again later when your monthly check would be higher.

You'll also want to consider whether you are already enrolled in Medicare. If you withdraw your application, your Medicare premiums will no longer be automatically deducted from your Social Security benefit, so you'll have to find another way to pay.

Suspend your benefits

If repaying your Social Security benefits isn't feasible, then you might want to consider suspending your benefits. This way you don't have to repay anything, however, keep in mind that not only will your benefits stop, but also this action will stop any benefits to a dependent family member. Your benefits would then start again at age 70. Listen in to discover why this may be a good strategy for married couples.

Request a lump sum payout

Requesting a lump sum payout works only for individuals who have reached full retirement age. They can request a lump-sum payout of up to 6 months of retroactive benefits. This option would best be used by someone who has an urgent need for cash or for people who waited until after their full retirement age to claim either spousal or survivor benefits. After receiving a lump-sum payment, that person could then voluntarily suspend benefits and earn delayed retirement credits up to age 70 which would boost future monthly benefits.

Claiming Social Security seems like such a permanent decision so if life comes along and changes your plans it's good to know that you have these alternatives to consider.

Resources & People Mentioned

• November 2020 Medicare series with Danielle from Boomer Benefits
• Boomer Benefits
• Retirement Repair Shop podcast with Mary Beth Franklin
• 3 Social Security Do-Over Options article
• Retirement Answer Man podcast
• Stay Wealthy podcast
• Financial Symmetry podcast
• Market Watch article on the ACA subsidy cliff
• KFF.org - resources for the ACA and other health matters

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/
• Follow Ben on Twitter: https://twitter.com/retiremeasap
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