Some
specifics about the “second act.”
Provided by Taylor McClish
Does your vision of retirement align
with the facts? Here are some
noteworthy financial and lifestyle facts about life after 50 that might
surprise you.
Up to 85% of a retiree’s Social Security
income can be taxed. Some retirees
are taken aback when they discover this. In addition to the Internal Revenue
Service, 13 states levy taxes on some or all Social Security retirement
benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana,
Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West
Virginia. (It is worth mentioning that the I.R.S. offers free tax advice to
people 60 and older through its Tax Counseling for the Elderly program.)1
Retirees get a slightly larger standard
deduction on their federal taxes.
Actually, this is true for all taxpayers aged 65 and older, whether they are
retired or not. Right now, the standard deduction for an individual taxpayer in
this age bracket is $13,500, compared to $12,200 for those 64 or younger.2
Retirees can still use IRAs to save for
retirement. There is no age limit for
contributing to a Roth IRA, just an inflation-adjusted income limit. So, a retiree
can keep directing money into a Roth IRA for life, provided they are not
earning too much. In fact, a senior can potentially contribute to a traditional
IRA until the year they turn 70½.1
A significant percentage of retirees are
carrying education and mortgage debt.
The Consumer Finance Protection Bureau says that throughout the U.S., the population
of borrowers aged 60 and older who have outstanding student loans grew by at
least 20% in every state between 2012 and 2017. In more than half of the 50
states, the increase was 45% or greater. Generations ago, seniors who lived in
a home often owned it, free and clear; in this decade, that has not always been
so. The Federal Reserve’s recent Survey of Consumer Finance found that more
than a third of those aged 65-74 have outstanding home loans; nearly a quarter
of Americans who are 75 and older are in the same situation.1
As retirement continues, seniors become
less credit dependent. GoBankingRates
says that only slightly more than a quarter of Americans over age 75 have any
credit card debt, compared to 42% of those aged 65-74.1
About one in three seniors who live
independently also live alone. In
fact, the Institute on Aging notes that nearly half of women older than age 75
are on their own. Compared to male seniors, female seniors are nearly twice as
likely to live without a spouse, partner, family member, or roommate.1
Around 64% of women say that they have
no “Plan B” if forced to retire early. That
is, they would have to completely readjust and reassess their vision of
retirement and also redetermine their sources of retirement income. The
Transamerica Center for Retirement Studies learned this from its latest survey
of more than 6,300 U.S. workers.3
Few older Americans budget for travel
expenses. While retirees certainly
love to travel, Merrill Lynch found that roughly two-thirds of people aged 50
and older admitted that they had never earmarked funds for their trips, and
only 10% said that they had planned their vacations extensively.1
What financial facts should you consider
as you retire? What monetary
realities might you need to acknowledge as your retirement progresses from one
phase to the next? The reality of
retirement may surprise you. If you have not met with a financial professional
about your retirement savings and income needs, you may wish to do so. When it
comes to retirement, the more information you have, the better.
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for
avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All indices are unmanaged and
are not illustrative of any particular investment.
Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.
Citations.
1 - gobankingrates.com/retirement/planning/weird-things-about-retiring/
[8/6/18]
2 -
forbes.com/sites/kellyphillipserb/2018/11/15/irs-announces-2019-tax-rates-standard-deduction-amounts-and-more
[11/15/18]
3 - thestreet.com/retirement/18-facts-about-womens-retirement-14558073
[4/17/18]