Retirement thoughts…

You can plan for it, dream about it and try to visualize it, but there’s no way to tell for sure what retirement will be like for you until after you’ve actually pulled the trigger and left the job. As you contemplate this major life change, remember to prepare for these potential retirement surprises.

Many retirees keep on doing what they’ve always been doing, except they don’t go to work. There’s more time for shopping, doing home repairs, seeing friends and playing golf. But after a while it begins to sink in that time is a precious resource. People begin to reflect on their lives, start to say no to activities they really don’t want to do and consciously focus on the important, more purposeful things in their lives.

Eventually the fantasy of never again having to punch a time clock or rush to the commuter train gives way to the … Read More

Retirement and Working Part Time – Know the Facts

If you start taking Social Security before your full retirement age, earning more than $17,040 from work will reduce your benefits temporarily. Once you’re on Medicare, extra income could potentially trigger surcharges for parts B and D. Also, don’t overlook your required minimum distributions from retirement accounts once you reach age 70½.

After leaving a 40 hour work week behind, many retirees end up taking on part-time work even if it wasn’t part of their initial retirement plan. Today’s retirees are active and want to continue being productive in some way, it brings them a sense of value that they had in their long-time professional career. More than half of people ages 60 to 64 were working at least part time in 2017, according to the Bureau of Labor Statistics. In the 65-to-69 crowd, nearly a third were in the workforce last year. If you find yourself among those who return … Read More

What is the Net Investment Income Tax

Understanding the Net Investment Income Tax

It’s been around since 2013, but many are still struggling to come to grips with the net investment income tax. The 3.8% tax, which is sometimes referred to as the Medicare surtax on net investment income, affected approximately 3.1 million federal income tax returns for 2013 (the only year for which data is available) to the tune of almost $11.7 billion.1 Here’s what you need to know.

What is it?

The net investment income tax is a 3.8% “extra” tax that applies to certain investment income in addition to any other income tax due. Whether you’re subject to the tax depends on two general factors: the amount of your modified adjusted gross income for the year, and how much net investment income you have.

What income thresholds apply?

Modified adjusted gross income (MAGI) is basically adjusted gross income–the amount that shows up on line … Read More