Retirement Watch Weekly
The ‘Widow’s Penalty Tax’ and How to Avoid It [Part 2]
It’s one of the “Stealth Taxes” no one talks about, and it comes at an emotionally vulnerable time. I’m referring to the “widow’s penalty tax.” Last week we discussed the first three potential hits to the surviving spouse: Income is likely to decline. Second, the surviving spouse is pushed into a higher tax bracket. A […]
We’re in the Peaking Process
Which will break first: inflation, the economy or the Federal Reserve? Futures mar- kets show that investors believe infla- tion is peaking and soon will return to pre-2021 levels. Investors believe the Fed won’t have to tighten much more, there won’t be a recession, and interest rates will be lower in a year or two […]
How to Minimize the Most Important Number on Your Tax Return
The most important number on your federal income tax return, especially during retirement, is on line 11 of the first page of Form 1040 for 2021. The number is your adjusted gross income (AGI). For retirees, AGI is more important than for most other taxpayers. Before retiring, taxable income probably is the most important line […]
Three Reasons to Turn Part of Your IRA into a QLAC
Many people could achieve a couple of retirement finance goals by adding a quali- fied longevity annuity contract (QLAC) to their IRAs. Even if you never buy one, you should take a look at QLACs and know their advantages and disad- vantages. QLACs were created in regulations issued by the IRS in 2014. They’re an […]
Reap the New Estate Planning Advantages of 529 Plans
If you have young grand- children, take a fresh look at 529 education savings plans. These always were good estate planning tools, but a series of chang- es in recent years make them more attractive ways for grandparents to help grandchildren. You can set up a 529 savings plan account for any beneficiary, and you […]
Here’s the Truth About ‘Secret’ Retirement Plans and Personal Bank Accounts
You’ve seen the hype. Now, let’s look at the facts. There’s a widely promoted estate and financial planning strategy I’m often asked about. It’s been called the Secret 770 Account and the President’s Account. Other names are Banking on Yourself®, Infinite Banking®, LIRP, and Becoming Your Own Banker®. I’ve also seen it described as The […]
Bob’s Journal for 6/30/22
Did You See How the Indexes Changed? A number of popular stock market indexes were changed, and the updates will surprise some investors. Many index investors believe they’re investing in “the market” and that their investments aren’t actively managed. That’s not really the case. The indexes are portfolios of stocks that are selected by committees, […]
The ‘Widow’s Penalty Tax’ and How to Avoid It
The widow’s penalty tax is one of the least known yet most onerous of the retirement Stealth Taxes. Since few people are aware of it, few retirement plans defend against the widow’s penalty. I frequently warn people about the “solo” years. Those are the years after one spouse has passed away. The surviving spouse must […]
