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Liz Weston

Q&A: Deciding when to claim Social Security benefits

April 23, 2018 By Liz Weston

Dear Liz: In a recent article you discussed delaying Social Security benefits and wrote that for married couples, only the higher earner needs to wait until age 70 to get the largest possible check. I don’t understand the logic behind that statement.

I have always been told to wait until 70 to collect; however, my husband is the higher wage earner. Wouldn’t I still benefit from waiting until 70? If he is a few years younger than me, does that make a difference? If I don’t have to wait until 70, I am all for collecting at 66.

Answer: As you know, each year you delay boosts the check you get by roughly 7% to 8%. That’s a guaranteed return you can’t match elsewhere and why many financial planners encourage clients to delay claiming if they can. The “break-even” point — where the benefits you pass up are exceeded by the larger checks — can vary depending on the assumptions you make about investment returns, inflation and taxes. Generally speaking, you’ll be better off delaying until at least 66 if you live into your late 70s. If you delay until age 70, when your benefit maxes out, you’ll pass the break-even point in your early 80s.

None of us has a crystal ball, of course, and planners make the argument that Social Security should be viewed as longevity insurance: The longer you live, the more likely you are to spend your other assets and depend on your Social Security for most or all of your income. Given that reality, it makes sense to maximize that check.

That’s true for all individuals claiming Social Security, but married couples have another complication. When one dies, the other will have to get by on a single check — the larger of the two checks the couple was receiving. That’s the check that should be maximized, so it’s more important that the higher earner delay than that both spouses delay.

If you want a more detailed discussion of the issue, read financial planner Michael Kitces’ blog post “Why it rarely pays for both spouses to delay Social Security benefits” at kitces.com.

Filed Under: Q&A, Retirement, Social Security Tagged With: Q&A. Social Security

Friday’s need-to-know money news

April 20, 2018 By Liz Weston

Today’s top story: Why the new tax law makes Roth IRAs more attractive. Also in the news: 7 ways to save on your next national park trip, how to prep for in-flight interviews and land a job, and the 6 skills you need to be financially successful.

Why the New Tax Law Makes Roth IRAs More Attractive
Taking advantage of tax benefits.

7 Ways to Save on Your Next National Park Trip
A trip that doesn’t have to be too expensive.

Prep for In-Flight Interviews and Land a Job
Interviewing in an unusual location.

The 6 Skills You Need to Be Financially Successful
It’s more than just a budget.

Filed Under: Liz's Blog Tagged With: financial skills, in-flight interviews, national parks, Roth IRA, tax laws, tips

Thursday’s need-to-know money news

April 19, 2018 By Liz Weston

Today’s top story: Beat the retiree crowds to these 5 places abroad. Also in the news: Better options for student loan repayments, the pros and cons of travel loans, and why millennials are piling up debt to keep up with their friends.

Beat the Retiree Crowds to These 5 Places Abroad
Before they become popular.

Student Loans: Are You Making Repayment Harder?
Finding better options.

Fly Now, Pay Later: Are Travel Loans a Good Deal?
Convenience comes at a cost.

Millennials Pile Up Debt To Keep Up With Their Friends, Survey Finds
FOMO.

Filed Under: Liz's Blog Tagged With: debt, millennials, retire abroad, Retirement, Student Loans, tips, travel loans

Wednesday’s need-to-know money news

April 18, 2018 By Liz Weston

Today’s top story: 5 great ways to invest your tax refund. Also in the news: How to say no to being a bridesmaid, when to upgrade at the gas pump, and how to decode your financial aid letters.

5 Great Ways to Invest Your Tax Refund
The best ways to put your windfall to good use.

Ask Brianna: How to Say No to Being a Bridesmaid
While keeping your friendship intact.

Premium and ‘Top Tier’ Gas: When to Upgrade at the Pump
When the higher octane is necessary.

How to Decode Your Financial Aid Letters
Deciphering your offers.

Filed Under: Liz's Blog Tagged With: bridesmaids, financial aid, financial aid letters, gasoline, gasoline prices, tax refund, Taxes, tips, weddings

Tuesday’s need-to-know money news

April 17, 2018 By Liz Weston

Today’s top story: What really happens if you don’t pay your taxes by April 17th. Also in the news: Getting tax audit help might be easier than you think, are you the right person for a do-it-yourself house kit, and 6 great TV episodes to watch after paying your taxes.

What Really Happens If You Don’t Pay Your Taxes by April 17
Cue the penalties.

Getting Tax Audit Help Might Be Easier Than You Think
Your tax software can help.

Are You Built for a Do-It-Yourself House Kit?
Do you have what it takes?

6 Great TV Episodes to Watch After Paying Your Taxes
Join The Honeymooners, Archie Bunker and Homer.

Filed Under: Liz's Blog Tagged With: house kits, interest, penalties, real estate, tax audit, Taxes, TV

Beat the retiree crowds to these 5 places abroad

April 17, 2018 By Liz Weston

Coronado in Panama once had pristine beaches and not much else. Today the resort town is a haven for U.S. and Canadian retirees, with strip malls, fast-food joints and a lot of people speaking English.

“For all the world, it’s like you’re in a U.S. beach town,” says Kathleen Peddicord, publisher of Live and Invest Overseas, a site and newsletter for people who want to work, invest or retire abroad.

That kind of retirement destination appeals to many who are looking for an established expatriate community where they may not have to learn another language, says Dan Prescher, a senior editor at International Living, another site for people interested in life abroad. Places like Coronado or Boquete in Panama, Puerto Vallarta or Ajijic in Mexico and Ambergris Caye island in Belize have been welcoming North American retirees for years.

If you’re looking for places before they become popular, however, you may need to be even more adventurous than the typical expat. In my latest for the Associated Press, the next hot retirement destinations abroad, where couples can live comfortably on less than $2,000 a month.

Filed Under: Liz's Blog Tagged With: Retirement, retirement destinations

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