Liz Weston

Q&A: The not-so-hidden costs of claiming Social Security at 62

April 20, 2026 By Liz Weston Leave a Comment

Dear Liz: I’ll be 62 next year. I planned to start taking my Social Security of about $2,600 a month and just put that check into an investment account until I retire. However, if I’m going to be taxed $1 for every $2 over $23,000 that I make, then my plan needs to change. Maybe I should wait until 67. I make around $180,000 a year and that should continue until I retire. I loved my plan and am really disappointed that I cannot put it into play.

Answer: Sometimes the things we love aren’t good for us. Your plan would have shortchanged you and possibly your spouse.

You wouldn’t actually pay a 50% tax on your Social Security if you applied at age 62. What you would face is the earnings test, which withholds $1 for every $2 you earn over a certain amount, which is $24,480 in 2026. Given your income, your entire benefit would be withheld.

The earnings test would apply until you reached your full retirement age of 67. At that point, any money that was withheld would be added back into your benefit.

What isn’t added back is the additional money you would have received simply by postponing your application. If you wait, your benefit would grow about 30% between age 62 and 67. After 67, delayed retirement credits boost your benefit by 8% each year you delay until age 70, when your benefit maxes out. In addition, your benefit gets cost-of-living increases beginning at age 62, whether or not you’ve applied.

Those are guaranteed returns, by the way. Other investment returns are not. You could make more in the stock market, but you also could make less or lose money.

If you’re married and the higher earner, an early start would also stunt the survivor’s benefit. The effect can be so dramatic on the survivor’s finances that financial planners typically advise the higher earner to wait as long as possible to apply.

Q&A: Beware the Blurred Line Between Fee-Only and Commission-Based Advice

April 20, 2026 By Liz Weston Leave a Comment

Dear Liz: I am very overwhelmed with life so I’ll try to stick to where I need your help. My 68-year-old husband has been diagnosed with dementia. I thought we were responsible, having a nice nest egg of over $2 million, a house that is paid off and no debts. However, finding out long-term care costs, I am now terrified that it will all be depleted. Per your advice, I found a fee-only financial planner. I wanted his opinion about long-term care insurance for myself (my husband no longer qualifies). Turns out the planner will be the one to get the policy for me, should I decide to go forward. He’s recommending a hybrid policy with a death benefit, which means if I end up not using the long-term care coverage, the value will go to our children. I’m uncomfortable with the fact that this planner has an obvious stake with this long-term care policy and therefore might be biased with his advice.

Answer: If your advisor has an “obvious stake” in the policy you buy, implying that he will be paid a commission, then by definition he is not a fee-only financial planner. Fee-only financial planners are compensated solely by the fees they charge their clients.

What you may have encountered is a fee-based advisor, who collects fees from clients but also accepts commissions.

You want to be able to trust that the advice you get is in your best interests. That means you need a fiduciary advisor: someone who is obligated to put your interests ahead of their own and who is willing to put that promise in writing. If your advisor isn’t a fiduciary, you can find one who is through one of several organizations that represent true fee-only advisors, such as the National Assn. of Personal Financial Advisors, the Garrett Planning Network, the XY Planning Network or the Alliance of Comprehensive Planners.

The advisor also should be able to refer you to an elder law attorney who can discuss ways to protect your finances from being devastated by long-term care costs, or you can seek referrals directly from the National Academy of Elder Law Attorneys.

Q&A: What should I do with inherited gold coins?

April 13, 2026 By Liz Weston Leave a Comment

Dear Liz: When my mother passed away nine years ago, I inherited some gold coins. At the time, it was difficult to go through her life’s belongings and part with things. Now that gold prices are so high, I’m wondering if it makes sense to sell those coins? I’m not sure holding on to them makes a lot of sense, but would appreciate any advice you might have.

Answer: Gold coins can be a good hedge against inflation as well as a portable source of wealth. But you need to store them securely to guard against theft and they probably should be insured, which can raise the costs of ownership.

If you want to turn your coins into cash, make sure to get at least three quotes from different sources such as reputable coin shops and jewelers. Also discuss the sale in advance with your tax pro. The difference between the value of the coins when you inherited them and their sale price would be considered a capital gain. Gold coins are taxed as collectibles, which means they’re subject to a 28% federal capital gains tax rate.

Q&A: Is there a tax break for paying a child’s student loans?

April 13, 2026 By Liz Weston Leave a Comment

Dear Liz: Our daughter took on substantial student loan debt to get her master’s degree. She owes about $60,000 and so far has only been able to work a minimum wage job.

If my wife and I were to pay off the loans, would there be any tax advantages or other benefits we could use to offset the expense?

Answer: You won’t get a deduction for paying your daughter’s student loans and you’ll need to be mindful of gift tax rules, but that shouldn’t deter you from this generous act if you can afford to help.

Education debt is the norm for today’s college graduates, but a Gallup poll found the majority say their student loans caused them to delay at least one major life milestone such as buying a home, starting a business, getting married or having kids. Borrowers often forgo saving for retirement in their attempts to pay down debt, losing years or even decades of compounding and diminishing their future wealth. Student loan debt also can create mental health burdens, leading to more depression, anxiety and a reduced quality of life.

The annual gift tax exemption allows you to give up to a certain amount annually to any recipient without having to file a gift tax return. In 2026, the limit is $19,000 per recipient, so you and your wife could give $38,000 this year toward paying down your daughter’s student loans. The exemption probably will be the same or slightly higher next year, allowing you to completely pay off the loans without having to file a gift tax return.

If you wanted to pay the whole bill in one go, you’d have to file the return but you’d be unlikely to pay any gift taxes. Gift taxes are only owed once the amounts you give away above the annual exemption exceed your lifetime estate and gift tax exemption, which for 2026 is $15 million.

Q&A: Is switching brokerages a taxable event?

April 6, 2026 By Liz Weston Leave a Comment

Dear Liz: Just moving your holdings from one broker to another should not trigger any capital gains implications if you journal over your stocks, bonds and mutual fund holdings without liquidating anything. Right?

Answer: Right, unless you’ve been sold a proprietary investment that can’t be moved to a competitor. Some brokerages create their own funds that have to be liquidated before the money can be transferred.