By Helen Donovan

The Cost of Living (COLA) goes up every year, but you’ve had no increase in Social Security(SS) income since 2014 thanks to Republican President Ronald Reagan who changed the COLA formula affecting 66 million SS recipients today. But at last, you’re going to get a 2% raise.

Let’s say your SS income is $1,500 a month and your increase per month is $30. But when you get your New Benefit Amount statement from the Social Security Administration effective in 2018, your increase is $5 a month. What happened?

The premium for Part B medical insurance spiked in 2018, not a few dollars but by $25, going from $109 to $134. The $134 is automatically deducted every month from your check by Social Security Administration for Medicare, leaving you $5. Your monthly income now is $1,505. (Higher earners pay a higher Part B premium.).

About 42 percent of SS recipients will pay the $25 increase, according to the Chicago Tribune’s “Ask Kim.”  The hold harmless provision that protects COLA adjustments from being consumed by insurance premium increases did not apply because $25 is lower than your $30 raise. The fear is that this situation could repeat itself indefinitely in the future. [Read more…]

By Marty Fogarty, Heartland Law Firm-Glenview

If you’re not familiar with the VA Pension program, you’re not alone. Even most veterans don’t know it exists. But if you served in the Persian Gulf War, Vietnam War, Korean War or World War II—or if your spouse did—you may be eligible to collect up to $2,127 per month.

Called the “VA Improved Pension,” the program was created to help ailing, low-income veterans and their spouses, widows and widowers. It provides a tax-free monthly benefit to vets with smaller incomes and large medical expenses. And it’s not tied to service-related injuries.

Are You Eligible? 

In order to qualify, veterans must have served at least one day during a war period, served at least 90 days of active duty, and received a better than dishonorable discharge.

Claimants must be over age 65 or permanently or totally disabled. They must need help with some of their daily living requirements, and their monthly medical expenses must exceed their monthly income. Surviving spouses of veterans who didn’t remarry are eligible, too. [Read more…]

By Enrolled Agent Steven J. Weil, Ph.D., President, RMS Accounting

As 2017 draws to a close, it may be a good time to take stock of your assets and review your plans for their disposition.

Let’s review what choices you have for a traditional IRA or a Roth IRA and whether it makes sense to leave either of them to your loved ones:

Consider that an IRA may be subject to double or even triple taxation because:

• A  traditional IRA could be taxed as part of your estate.

• Further, the taxable portion of the IRA balance (sometimes the entire balance) is considered income, which means that when IRA withdrawals are made by the recipient, they are taxed.

• In addition, state income tax also may be due.

Those three taxes can reduce the amount that is left to an heir while tax collectors benefit most.

The Solution May Be Leaving the IRA to Charity Instead

Consider naming your favorite tax-exempt charitable organization as the beneficiary of your IRA, and, at the same time, leave other assets that will have a higher after-tax value to your heirs. This option is very tax efficient and avoids double or triple taxation because an IRA balance that is left to charity is not considered part of your estate and, therefore, is not subject to the estate tax. Nor is it subject to federal or state income tax. [Read more…]

The largest wealth transfer in history is looming before us. Are you ready?

By Jess Stonefield

Second acts aren’t just for people. The wealth you’ve earned thus far will eventually have a new life, too. And if you don’t plan properly, it might be a very short one.

As we build families and continue to age, the discussion of wills and estate plans becomes increasingly important. Our loved ones (and lawyers) want to make sure our assets and wealth go where we want them to when we pass away—that nothing ends up in probate—that our money and valuables are transferred seamlessly to the next generation.

The only problem: no one talks about what happens after. 

Right now, we face the largest intergenerational wealth transfer in history. Accenture reports over the next 30-40 years, $30 trillion in assets will pass from Baby Boomers to their heirs in the United States alone. The issue: 70 percent of those intergenerational wealth transfers will fail by the time they reach the second generation. Even worse: by the time that wealth reaches the third generation, it will be worth just 12 percent of its original value. Nearly 90 percent of your hard-earned wealth lost. There must be a better way.  [Read more…]

Get Educated First!

By Jack Schacht, My College Planning Team

So, you want to help your grandchild fund his or her college tuition? What a great gift! After all, paying for college is the second largest expense most families will ever tackle, as tuition continues to increase at twice the rate of inflation.

Case in point: this year, according to CollegeData.com, the average cost of an in-state public college is $24,610. The average cost at a private college is $49,320. Meanwhile, the outstanding student loan debt is approaching a mind-boggling $1.4 trillion.

No wonder so many grands want to help their grandchildren out. According to a survey by Fidelity Investments, more than half of American grandparents are either helping to fund their grandkids’ tuition or planning to do so down the road.

However, it’s not nearly as simple as writing your grandchild a nice big check. A monetary gift to your grandchild may result in a tax event on your end or interfere with financial aid eligibility on theirs. In order to avoid such financial perils and pitfalls, grandparents need to do some research and planning.

[Read more…]

By Keith Armbrecht

You can delay but there are IFs and BUTs

If you are over 65 and still working, you are not alone. Warren Buffet is still at it and he just turned 87! In August of this year, the Bureau of Labor Statistics said there are 9,205,000 U.S. senior citizens in the same boat.

Retirement used to be the pot of gold at the end of the rainbow. You worked all your life, paying into a pension, paying into Social Security or contributing to a 401(k). Somewhere along the line, that pot disappeared.

Now, many people cannot afford to retire. Pensions have dried up. Social Security is no longer enough to live on. 401(k)s have been raided to pay for college tuition, medical expenses or household repairs.

If you are still working when you turn 65 and have other insurance coverage, you still need to pay attention to signing up for Medicare. There are IFs and BUTs to consider. We have them for you. [Read more…]