In our modern society, changing benefits and fluctuating prices can make it difficult for many of our elderly residents to make ends meet. Even if you planned for retirement, impacts on savings accounts, pension plans, health care coverages, and more can leave you in need of additional financial assistance to cover your living expenses. Unfortunately, many people commit to retirement before discussing the total value of their estate with a local expert. If you’re on this page seeking help from experienced estate lawyers across Maryland and D.C., JDKatz is here and ready to help. Our estate planning attorneys in Bethesda have the tools and expertise needed to optimize your plan and secure your hard-earned wealth from life’s unexpected changes.
Our team understands the complexities surrounding estate law, and our legal experts will work hard to create a plan that optimizes your current situation and your future. Those that have decided to retire today often find that their financial situation is not strong enough or reliable enough to live on alone. Today, we’ll highlight a few things you need to consider when heading back to work after retiring. No matter your current age or financial standing, our team is here and ready to get to work!
Age and Income Can Impact Benefits
Those that retire can begin collecting their Social Security benefits for added income assistance with few chances for complications. However, if you decide to retire before 66 years of age (the minimum age for collecting retirement benefits in this country), keep in mind that the government will reduce your benefits by as much as 30 percent. For those expecting to meet the minimums with their Social Security benefits, losing nearly a third of the amount immediately can prove to have a very negative impact. Those born between 1955 and 1959 will need to plan accordingly, as the retirement age is expanding two months every year until the new retirement age reaches 67 for those born in 1960 or later.
Working to gain extra income in retirement is commendable and oftentimes necessary, but keep in mind that your retirement will be impacted if you begin to make too much money. Retired residents under the age of 66 can make up to $17,040 in 2018 without penalty. After this amount, expect benefit reductions of 50 percent per dollar made. If you make 10 dollars over this amount, the Social Security Administration will reduce your benefits by five dollars!
Once you hit the retirement age, full-time employment becomes available for those in need. In 2018, the income limit retired residents receiving Social Security benefits is $45,360. Those working before the retirement age are often recommended to avoid taking their SSI benefits until they reach 66 years of age to receive the most support later on in life.
Be Aware of Taxation Amounts
One area that impacts many elderly residents across Maryland is budgeting with their expected tax figures. In many cases, retired residents assume that their Social Security Income (SSI) is tax-free. It is a governmental program that is regulated for this purpose, after all.
Remember that the IRS treats Social Security benefits as ordinary income, and can tax you in your SSI. Those that work, collect revenue from investments, and benefit from other revenue streams may see a large amount of their income taxed. If you are planning on receiving benefits soon for your retirement and are budgeting based on your gross payout, be sure to speak to our estate planning attorneys in Bethesda first! We will help you navigate the complex field of estate law to optimize your estate and income to get the most out of life.
Find Appropriate Health Coverage
Medical costs and associated bills are the top cause for bankruptcy in this country, and the trend is only growing worse. If you are an elderly resident looking for medical coverage, things can looks grim. Medicare is available for residents in need, but many people do not qualify before age 65. If you are planning on retiring before this point, it’s essential to find and finance medical coverage to keep you and your savings account healthy.
Recent governmental changes have lowered the penalties for not having health coverage, with future years uncertain in terms of penalties and restrictions. Employment can provide enough health insurance for many elderly residents to get by, but oftentimes, medical costs demand further coverage. If you are dealing with health complications, needing to work in your retirement years, or you are simply interested in finding coverage to protect from gaps in your Medicare, JDKatz is here to help.
Consider All Costs
Finally, senior citizens should consider all of their expense before beginning employment. Working can be a demanding experience, especially for those that have worked hard into their 60s and beyond. You will want to be sure that all of your needs are covered throughout employment. This can include uniform costs, transportation methods, and so on. Ultimately, paying for gas and meals to go can add up, making the prospect not as beneficial for some seniors. Before you go back to work, be sure to calculate all of your expected expenses to truly determine how much this job will help your life. Those with impacted health and mobility may need to find a different avenue for support.
Citizens across the country entering the retirement era may find that extra employment is required for financial stability. If you decide to do so, it helps to have a local estate planning attorney assist you to ensure a qualitatively comprehensive solution. JDKatz is proud to be your trusted estate lawyers in Maryland and D.C., delivering comprehensive support in elder law, estate law, and more. Contact us today to see how we can help prepare for your best future!