FINANCIaL
FIELd NOTES
Medicare IRMAA Surcharges and 5 Ways to Avoid Them
IRMAA stands for Income-Related Monthly Adjusted Amount. It is an increase to the standard Medicare Part B and Part D monthly premiums that Medicare recipients have to pay each month if they make over a certain amount.
For 2023, the standard Part B premium is $164.90/month and Part D is $0 (plus your plan premium). Depending on your income, your Part B premiums can go up to $560/month and Part D can go up to $76/month…
Is Social Security Running Out? 2023 Edition
Will there be anything left when I retire? Will my benefits get cut? These are some of the most frequent questions I get when it comes to someone’s retirement plan. And the media loves to talk about the Social Security problems.
Fortunately, there is data to answer these questions. Every year the Board of Trustees for Social Security reviews the financial status of the trust fund that pays out Social Security benefits. Recently, the board released its 2022 report, and below is my summary…
Using AARP’s Livability Index to Find Your Retirement Destination
For many retirees, where they live plays a significant role in their overall happiness and well-being. Deciding where to live can be a significant challenge, especially for those that have lived in the same area for most of their working years.
The AARP Livability Index is a useful tool that can help retirees make more informed decisions about where to live during retirement. The Index provides a score out of 100, with 50 being the national average…
10 Facts That Prove the World Is Getting Better
When I open a newspaper or turn on the news, it’s hard to be optimistic about the world. Despite this, I tend to be optimistic, which can come across as a bit naive in the investing world.
As Morgan Housel puts it, “Optimism often sounds like a sales pitch, pessimism sounds like someone trying to help you.” But the opposite has proven true…
Go-Go vs. Slow-Go Spending in Retirement
Oftentimes as retirees head into retirement there is some uncertainty about what monthly expenses will be. Pre-retirees may assume their spending will drop, at least to some extent. That may be the case for the average US retiree because they don’t have the income to support their pre-retirement lifestyle. But a retiree who has saved a nice nest egg may want to spend in a similar fashion, if not more.
The data shows that most retirees with $1-$3M in a nest egg spend 100% of their pre-retirement spending until roughly age 75. It then begins to decline by 20-30% until age 85, at which point it may decline by an additional 10% but there may be increased healthcare costs to consider…
Why Average Life Expectancy Is Deceptive
There’s an old financial planning joke about asking a retiree when they would like for us to plan their funeral. It’s a bad joke but the reality is that when we are planning for a lifetime, we do have to make an educated guess on when that life might end.
I often get pushback when I suggest as late as 90 or 95. That pushback is fair given that the average life expectancy is about 77 – 15 to 20 years less than I would typically plan for. But average life expectancy can be deceiving. ..