November Personal Finance Newsletter
November 14, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The November personal finance newsletter is now available. It includes all the updates on 2012 IRA and retirement plan contribution limits, plus the 2012 social security and medicare figures. In addition, we cover the importance of long term care planning for women and information on a free upcoming long term care insurance workshop at the library. The newsletter also includes tips on planning for required minimum distributions, an update on college costs, and a market update. Click here to read it.
Keller Social Security Workshop
September 26, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
My free workshop on social security planning at the Keller Public Library is scheduled for Tuesday, October 18 at 6:30 pm.
It’s designed for baby boomers to help you maximize your retirement income. If you are 55 or older, have not yet filed for social security, and live in or around Keller, you should strongly consider attending this financial information session. Attendees will learn:
- 5 factors to consider when deciding when to apply for benefits
- Why you should always check your earnings record for accuracy
- How to coordinate benefits with your spouse
- How to minimize taxes on Social Security benefits
- How to coordinate Social Security with your other sources of retirement income
You are welcome to attend and bring your questions! Please RSVP to library@cityofkeller.com for planning purposes.
A copy of “The Smartest Retirement Book You’ll Ever Read” by Daniel Solin will also be given away.
Small business owners: increase retirement savings with individual 401(k)
July 25, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
If you’re self-employed or own a small business, you’ve probably considered establishing a retirement plan. If you’ve done your homework, you likely know about simplified employee pensions (SEPs) and savings incentive match plans for employees (SIMPLE) IRA plans. These plans typically appeal to small business owners because they’re relatively straightforward and inexpensive to administer. What you may not know is that in many cases an individual 401(k) plan may be a better deal for you. An individual 401(k) plan is worth considering if you’re looking to set up your first retirement plan or increase tax-preferred savings.
What is an individual 401(k) plan?
An individual 401(k) plan (also known as a solo 401(k)) can be implemented only by self-employed individuals or small business owners who have no other full-time employees (an exception applies if your full-time employee is your spouse). If you have full-time employees age 21 or older (other than your spouse) or part-time employees who work more than 1,000 hours a year, you will typically have to include them in any plan you set up, so adopting an individual 401(k) plan will not be a viable option.
What makes an individual 401(k) plan attractive?
- Contribution levels can generally be higher than SEP or SIMPLE
- The employee part of your contributions can be designated as Roth or traditional regardless of income level
- Easy to set up at most discount brokerages without a lot of extra costs
With an individual 401(k) plan you can elect to defer up to $16,500 of your compensation to the plan for 2011 as either Roth or traditional contributions ($22,000 if you are age 50 or older by the end of the calendar year). In addition, your business can make a maximum tax-deductible contribution to the plan of up to 25 percent of your compensation (slightly less than that if you are a sole proprietor or unincorporated).
There are other details to be aware of, so consult your tax or financial advisor prior to establishing a plan.
Keller Social Security Planning Workshop
July 18, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
I am conducting a free social security strategy workshop at the Keller Public Library on Tuesday, July 19 at 6:30 pm.
It’s designed for baby boomers to help you maximize your retirement income. If you are 55 or older, have not yet filed for social security, and live in or around Keller, you should strongly consider attending this financial information session. Attendees will learn:
- 5 factors to consider when deciding when to apply for benefits
- Why you should always check your earnings record for accuracy
- How to coordinate benefits with your spouse
- How to minimize taxes on Social Security benefits
- How to coordinate Social Security with your other sources of retirement income
You are welcome to attend and bring your questions! Please RSVP to library@cityofkeller.com for planning purposes.
A copy of “The Smartest Retirement Book You’ll Ever Read” by Daniel Solin will also be given away.
June Personal Finance Newsletter
June 17, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The June personal finance newsletter is now available. It includes an investment market update and articles on several personal financial planning topics. There’s information on how long to keep financial records, perspective on the debt ceiling debate, an update on the new “net college cost” calculators, and information on the veteran’s pension. There’s also an invitation to the Keller Library Personal Finance workshop on June 28 — this month’s topic is the basics of Life and Disability insurance for those in their working years. Click here to read the newsletter.
Maximizing Social Security Survivor’s Benefits
April 25, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier.
Your family may be entitled to receive survivor’s benefits based on your work record
When you die, certain members of your family may be eligible to receive survivor’s benefits (based on your earnings record) if you worked, paid Social Security taxes, and earned enough work credits. The number of credits you need depends on your age when you die, however, no one needs more than 40 credits (10 years of work) to be “fully insured” for benefits.
Survivor’s benefits may be paid to:
- Your spouse age 60 or older (50 or older if disabled)
- Your spouse at any age, if caring for your child who is under age 16 or disabled
- Your ex-spouse age 60 or over (50 or older if disabled) who was married to you for at least 10 years
- Your ex-spouse at any age, if caring for your child who is under age 16 or disabled
- Your unmarried children under 18
- Your unmarried children under 19, if attending school full time (up to grade 12)
- Your dependent parents age 62 or older
This is a general overview–the rules are more complex. For more information on eligibility requirements, go to www.ssa.gov.
How much will your survivors receive?
An eligible family member will receive a monthly survivor’s benefit based on your average lifetime earnings. The higher your earnings, the higher the benefit. This monthly benefit is equal to a percentage of your basic Social Security benefit. The percentage depends on your survivor’s age and relationship to you.
If your family member is already entitled to social security benefits based on his or her own record, he or she will be able to receive whichever benefit is higher – survivor benefits based on your record or benefits based on the family member’s own record.
For example, at full retirement age or older, your spouse may receive a survivor’s benefit equal to 100 percent of your basic Social Security benefit. If your spouse was already receiving social security based on his or her own record when you died and his or her monthly benefit was lower than yours, your spouse would be able to switch to your benefit.
If you delay filing for social security benefits past full retirement age, your spouse’s survivor benefit would also be higher because of your delayed retirement credits. Any delay up until age 70 increases the base for future social security cost-of-living adjustments. This has a powerful multiplier effect on both the standard of living during your lifetime and for your surviving spouse’s lifetime.
You can get an estimate of how much your survivors might be eligible to receive by filling out a request form at your local Social Security office, visiting www.ssa.gov, or reviewing you Social Security Statement.
Before filing for Social Security, consider the many different filing options available to you and ensure that you select the one that provides the best combination of current income, longevity protection, and survivor security for your situation. Keener Financial Planning provides analysis of different filing scenarios and recommendations on which one is most beneficial for you in the context of your overall retirement plan.
April Personal Finance Newsletter
April 15, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
The April 2011 Personal Finance Newsletter is now available. This month’s newsletter includes a reminder on Monday’s 2010 IRA contribution deadline and information on social security statements being suspended. We also have articles on the estate tax exemption portability and the opportunity for some to do Roth conversions inside their 401(k) plans. Plus — it’s my pleasure to introduce Keener Financial Planning’s new Planning Assistant, Megan Horst. To read the newsletter, please click here.
Advice quoted in Money Magazine
April 11, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
Money Magazine recently featured my advice to a reader who’s company had stopped matching their 401(k) contributions. The reader was wondering if they should start contributing to a Roth IRA instead of the company plan. See my comments at Money Magazine’s website.
Your Retirement Savings Game Plan
April 6, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
I will be offering a free Keller retirement planning workshop at the public library on Tuesday, April 19.
There are many uncertainties in saving for retirement right now. Even if you never plan to retire, planning for that day when work becomes optional still carries a lot of unknowns. In this workshop, we will cover how you can take control of your retirement plans by focusing on your personal savings, investing, and tax efficiency. This workshop is designed for those more than 5 years away from retirement. We will cover how to:
- determine retirement income needs
- assess the gap between guaranteed sources of retirement income and your spending needs
- prioritize retirement savings and investing strategies to fill the gap
- review which savings methods are most tax-efficient for your situation
- calculate if you’re on track for your retirement goals
- create a plan flexible enough to accommodate future uncertainty
The workshop is free, but RSVP is encouraged for planning purposes to library@cityofkeller.com. A drawing for a free copy of The Investment Answer by Daniel C. Goldie and Gordon S. Murray will also be held.
Financial Advice Quoted on Retirement Savings
March 17, 2011 by Jean Keener, CFP, CRPC, CFDS · Leave a Comment
I recently had the opportunity to contribute to an article for Classical Singer magazine about the complexities of financial planning for musicians. Greg Waxberg wrote the article called “Filling in the Financial Gaps” and brought together advice from many financial planners on issues with budgeting, retirement planning, health insurance and more.
I shared a retirement savings strategy that works well when your income may be variable from month to month and year to year. This strategy is applicable to those with variable incomes in professional music careers, but also applies to anyone whose income varies. This could include self-employed, sales people with much compensation tied to commissions, and others.
Ideally, you should carve out a baseline retirement savings amount each month that fits within the minimum income you tend to receive. If your income is so variable as to make that impossible, you should set an annual savings goal for the year. When you have large compensation months, you direct 100% of it to achieving this goal until you hit it each year. After meeting your goal, you can split any overages between additional retirement savings and more discretionary items. This approach allows you to stay on track for meeting your financial goals even when your income varies tremendously. It also creates a reward for yourself of achieving your goals by allowing yourself a discretionary spending splurge after the goal is met.