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2011 Tax Outlook for Seniors
Tweet Share on Facebook December 29, 2010 Comment (2)Most seniors will get no special breaks from the recently enacted tax package. Still, tax experts note that the extension of current tax rates will create a stable planning environment. They advise seniors to take advantage of the next two years to build a plan that will help them reduce taxes as they liquidate investments to meet retirement expenses. In particular, lower-income seniors will enjoy zero tax rates on qualifying capital gains and stock dividends.
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10 Reasons to Feel Optimistic About the Future
Tweet Share on Facebook December 27, 2010 Comment (1)As 2010 comes to a close, the country seems to be finding some solid footing. After more than three years of what seemed like an economic free-fall, there is a sense that we’ve seen the worst. Maybe we’re not moving in the right direction just yet. But we’ve stopped moving in the wrong direction. Consumer sentiment is a key barometer, and shoppers came out in numbers big enough to support a respectable holiday season. Not a boom, mind you, but a better showing than we’ve seen in recent years.
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Senior Safety Nets at Risk in 2011
Tweet Share on Facebook December 22, 2010 Comment (3)When Texas Governor Rick Perry recently threatened to pull his state out of Medicaid, he was hardly alone. Across the country, state budgets continue to be strapped. Federal stimulus dollars are running out. And the latest federal tax and stimulus package will not provide much relief at the state and local levels. Meanwhile, looming provisions of health reform will add a projected 16 million to the Medicaid rolls. Where are the facilities to take care of these folks? Where is the money?
[See 10 Key Retirement Ages to Plan For.]
As the United States slogs its way through a third year of recessionary conditions, the cumulative impact on government support programs for older Americans has become worrisome. Most eyes are on the federal government's massive budget deficits. Safety net programs would be affected by deficit reduction proposals that have been introduced to generally favorable receptions. Whether you call them entitlements or part of a welfare state, the big three—Social Security, Medicare, and Medicaid—must be reined in for meaningful deficit reduction to occur. The battle over these programs has already begun and will intensify when the new Republican majority takes office next year in the U.S. House of Representatives.
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5 Big Money Uncertainties for Retirees
Tweet Share on Facebook December 20, 2010 Comment (5)As 2010 draws to a close, people in or nearing retirement face a particularly uncertain financial future. The government has approved a package of tax breaks, jobless benefits, and other stimulus spending. But these fixes will last only a year or two and virtually guarantee big shifts down the road. Meanwhile, the landmark health reform law will be under sustained legal attacks for years, adding to already existing questions about the effects of its implementation. Deficit reduction efforts appear unavoidable, if unpleasant. And the economic recovery continues its painfully slow progress.
[See 10 Tips for Retirement Overseas.]
No wonder retirement-age people keep working or are trying to get back into the work force. They're also continuing to reduce their use of credit and tighten up on spending. People are playing defense—cutting spending a bit now to reduce the odds of having to live even more frugally in the future. Looking ahead, here are five major unresolved money issues that are crucial to retirees:
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2011 Outlook for Senior Healthcare
Tweet Share on Facebook December 17, 2010 Comment (3)Senior healthcare will face big changes and challenges in 2011. The health reform law will usher in free preventive health services for all Medicare users and significant reductions in drug expenses for millions of seniors. Private insurance plans that supplement basic Medicare are expected to continue shrinking in number and, in some cases, covered benefits. Medicare also is introducing shifts in the timing for annual Medicare enrollment, and experts are concerned that many consumers may be unaware of these rule changes in time to make the best Medicare coverage decisions.
The Medicare system next year must begin accommodating the mass movement of baby boomers into their retirement years. For most people, Medicare eligibility begins at the age of 65. According to U.S. Census Bureau projections, an average of more than 7,500 people a day will turn 65 next year. This age wave will rise each year until finally cresting in 2025, when a projected 11,700 people a day will celebrate their 65th birthdays.
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Baby Boomers to Inherit Up to $11.6 Trillion
Tweet Share on Facebook December 14, 2010 Comment (4)Baby boomers have even more reasons—11.6 trillion of them—to thank the Greatest Generation. According to a new study, the boomer generation (people born between 1946 and 1964) will inherit that many dollars, largely from their parents.
[See 10 Tips for Retirement Overseas.]
The numbers are broken into three categories, according to a study commissioned by MetLife and conducted by the Center for Retirement Research at Boston College. Already, boomers have received $2.4 trillion in inheritances, and they stand to get another $6 trillion. In addition, wealth transfers from living donors have already totaled $1 trillion and could total another $2.2 trillion. On the downside, the study said the economic downturn eventually could reduce these numbers by up to $800 billion.
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5 Financial Skills Prized in a Tough Economy
Tweet Share on Facebook December 13, 2010 CommentBeing financially capable is normally not the stuff of bragging rights. But in this severe downturn, perhaps, a solid grasp of finance is unusually valuable. So, hats off to residents of New York, New Jersey, and New Hampshire. According to a major study of Americans' financial knowledge, planning, and coping skills, you are at the top of the class in terms of your financial savvy.
[See 10 Tips for Retirement Overseas.]
The FINRA Investor Education Foundation surveyed more than 28,000 Americans last year, or about 500 per state. It gathered information in major categories designed to measure consumers' financial capabilities: making ends meet, planning ahead, managing financial products, financial knowledge, and financial decision-making. It then compared how residents in different states fared in these capabilities. FINRA is the Financial Industry Regulatory Authority—the major industry overseer of securities firms.
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The Best Holiday Gifts for Seniors
Tweet Share on Facebook December 10, 2010 Comment (4)Welcome to the age of gadgets, where Best Buy has become the new Toys 'R' Us. In assembling a gift list for seniors, there are plenty of goodies that either plug into an outlet or require a large intake of batteries. There's just no way around them. But experts drum home some cardinal rules:
1. Remember who the gift is really for.
2. Make sure the recipient has a use for the gift.
3. Make sure you or another family member can provide real-world tech support for the recipient. Your continued help needs to be part of the gift.
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Best Places for Military Retirees
Tweet Share on Facebook December 8, 2010 Comment (46)After an adult lifetime being sent, at government expense, to wherever the government tells you to live, military retirees can face especially challenging decisions about where to start the next chapter of their lives. Usually in their 40s, with pensions averaging half of their pay, nearly all military retirees need to find new careers. Many also have families and growing children to consider.
Steve Keim retired in 2008 after a 30-year career in the Marines as an aviator, electronic warfare expert, and finally, as a colonel and commanding officer of the Naval ROTC unit at Texas A&M University in College Station, Texas. His four-year A&M stint came nearly 30 years after he graduated as an Aggie, and his fondness for the town and area deepened during his last duty tour.
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Retirees Largely Shut Out of Obama Tax Compromise
Tweet Share on Facebook December 7, 2010 Comment (8)The tax deal reached between President Obama and Republican leaders is great for wealthy Americans (no tax increases and reduced estate taxes). Businesses would get some nice investment tax breaks to encourage them to expand and hire more people. Working people get a year-long, $120 billion benefit through lower Social Security taxes. Millions of people who have been out of work for a long time would continue to receive long-term unemployment benefits. Parents would receive education and tax breaks. Low-income citizens would enjoy an expanded earned income tax credit.
Indeed, there seems to be something for everyone in the $900 billion package. Except retirees. I see no breaks for them.
