Keep More of Your Savings
People in their 60s should already be planning ways to minimize taxes in their 70s. Investors can pull money out of tax-deferred retirement accounts without penalty after turning age 59 ½ . Yet many choose to let their investments grow sheltered from taxes as long as possible, which can trigger higher taxes when mandatory distributions kick in. Ironically, tax-deferred growth creates its own tax problem if you do it too well.
Most people tend to delay taxes as long as possible, but this can backfire when it comes to RMDs. “It just pushes all the taxes farther and farther down the line and then they get this huge tax bite later.” “Unfortunately, it’s too late at that point.”
But it’s not too late for retirees in their 60s when withdrawals are penalty free, RMDs haven’t yet kicked in and disbursements are likely to be taxed at a lower rate because the recipient is no longer working. Or consider converting part of your traditional IRA each year to a Roth IRA. You’ll owe income taxes on the amount converted, but it may be at a lower rate if you’re retired.
Design a disaster plan- It should include whom to contact and where to meet family members in case of an emergency. All family members should know the plan and numbers to call.
Fill a fireproof box with important cards and financial records. You may also want to include identification and some emergency cash in small bills.
Turning off Gas, Oil and Water in your home- Label these valves so you access them easily to turn off. The Federal Emergency Management Agency (FEMA) recommends you contact a professional to turn it back on.
Create a go-kit. Such as a back pack or suitcase on wheels and keep it handy. For a list of what to include in your kit, Visit ready.gov/kit.
Have food and water handy- Store at least 3 days of nonperishable food for each family member, plus a gallon of water daily per person. Remember to pack canned foods, peanut butter and granola bars. These are great sources of energy and don’t forget that can opener!
The majority of people do not investigate the “True Cost” of credit cards. The annual fee, late fee and interest charges are moot points that are overshadowed by “miles” or special offers. In addition, those “freebies” have a cost. Either you pay for it via interest rates on the credit card or the merchant/vendor pays for it (which you are actually paying for in higher prices). As mentioned in earlier blogs you may get “1 mile” for each dollar you spend, yet that $1 spent is cashed in, when you redeem them, at one (1) penny. It does take a lot of work to do all the calculations. I found a site that does a good job in filtering all these confusing offers. The “free” portion of the site does give you an excellent starting point to make decisions. You can pay an additional fee for more comparative studies. Give it a try. www.viewfromthe wing.com
Is your garage and storage space still overflowing with clutter after that spring cleaning? You may want to take a second look. You could be holding on to some gold. This means clearing out closets of unwanted tax-deductible clothing and household items that you no longer need. Don’t forget those unused items you placed in storage. But don’t stop there? You may also qualify for write-offs by donating unwanted paint to globalpaints.org, building materials to Habitat for Humanity’s ReStores and old linens (used for pet bedding) to tax-exempt animal-rescue shelters. Utility companies may provide free pickup of older appliances that are not energy efficient. Did you know some utilities will even pay about $50.00 for upgrading your appliances, or they will credit your bill?
5 Key Websites
Shop for the credit card that’s best for you based on interest rate, rewards or other features. Also try cardratings.com.
The site lists the best and latest rates on mortgages, savings accounts, auto loans and other financial products from lenders nationwide.
Find calculators here that can help you determine the size of the mortgage you can afford and the cost of refinancing.
Check out more than a dozen AARP calculators and tools to help you manage your finances. Search for “Money Tools.”
The company that produces the widely used FICO credit score offers tips on how to improve your score to qualify for better credit terms.