Dear Liz: You wrote in a column about retirement plan distributions and the effect that those have on taxation of one’s Social Security benefits. Your example was if someone made over $44,000 in combined earnings then their benefits would be taxed at 85%. Does this apply if one waits until full retirement age to start drawing Social Security? […]
Recent Blog Posts
This week’s money news
This week’s top story: Smart Money podcast on tipping, and managing high credit card annual fees. In other news: If you should financially support adult kids, how to use ChatGPT to plan your next trip, and if you can’t afford long-term care. Smart Money Podcast: Nerdy Tips on Tipping, and Managing High Credit Card Annual Fees […]
Safer ways to raid your retirement, if you have to
Raiding your retirement accounts can be expensive. Withdrawing money before age 59½ typically triggers income taxes, a 10% federal penalty and — worst of all — the loss of future tax-deferred compounded returns. A 30-year-old who withdraws $1,000 from an individual retirement account or 401(k) could lose more than $11,000 in future retirement money, assuming […]
Q&A: Taxes on home sales
Dear Liz: I thought that if you occupied a home as your principal residence for two of the last five years that you could exclude capital gains of up to $250,000 if single or $500,000 if married. Someone recently told me that this has been changed to a pro-rata calculation. Answer: That someone was wrong. The pro-rata […]
Q&A: Roth IRA withdrawal rules
Dear Liz: In a recent column you mentioned that you can take money out of a Roth IRA at age 59½ without a penalty. I believe a Roth IRA must be in force for at least five years before you can take money out, regardless of age. Is this correct? Answer: At any time and at any age, you […]
Q&A: The thought of ending up old and alone can be terrifying. It doesn’t have to be that way
Dear Liz: My wife and I have no children to take care of us in our old age, and I am scared to death regarding what will happen to the surviving spouse when one of us dies or we become incapacitated. We are 69 and 67 respectively and I think a lot of “boomers” are facing […]