Remember that guy or gal you dated then broke up with in the 80’s? I know, I know, I’d like to forget him too. Could that old flame get some of your money when you die? Remarkably this scenario is playing out now in federal court. You can read the whole fascinating story in the Wall Street Journal. (non-paywall link) From the article: “Jeffrey Rolison and Margaret Sjostedt dated in the 1980s. Now, almost 40 years after they broke up, she stands to inherit his $1 million retirement account.” In 1987 Rolison listed Sjostedt on a handwritten 3x5 card (pictured below) as “cohabitor” and the sole beneficiary of his Procter & Gamble workplace retirement …
You Must be Present to Win
I have such wonderful clients. Many of them send me items of interest. Recently, my client JC, a former J.P. Morgan employee, sent me a gold mine: the J.P. Morgan Guide to Retirement 2024. It is 53 pages chock full of interesting data. You can see the whole thing HERE. But the page that really grabbed my attention was page 47 - “Impact of being out of the Market”. You can see page 47 in its entirety HERE. It features this graph: Let’s walk through it. This graph shows the growth over 20 years of a hypothetical $10,000 investment made in the S&P 500 Index on January 1st, 2004. The S&P 500 Index is a group of 500 of the largest companies in the United …
How Much Social Security Tax do you Pay?
In my last blog article, I reviewed Federal income tax liability. Today we move to Social Security tax. Almost all workers, whether they work for themselves or someone else, pay Social Security taxes. How much do you pay? Let’s begin with taxpayers who work for someone else. Employees pay Social Security tax of 6.2% on their Social Security wages. This is automatically withheld from pay. Their employers also pay 6.2% of pay for a total of 12.4%. You can see this on your W-2 form, Boxes 3 and 4: This client had Social Security wages (Box 3) of $142,813.91 This number multiplied by 6.2% = Social security tax withheld (Box 4) of $8,854.46 Her employer also paid …
How Much Federal Income Tax do you Actually Pay?
Taxes are on my mind this month as tax season is in full swing. Also you may have heard there is a Presidential election later this year. I probably follow tax policy discussions more closely than the average bear, but I suspect everyone will be hearing a lot about who does or does not pay their fair share of taxes during the campaign. What’s more, several provisions of the 2017 Tax Cut and Jobs Act, including lowered individual tax rates are set to expire on December 31st, 2025. We will also be hearing a lot about whether these cuts should be extended. Which bring me to the topic of today’s newsletter. How much Federal income tax do you *actually* pay? I believe …
Facts about IRMAA … and some editorializing.
It is that time of year when Social Security/Medicare recipients receive letters outlining their 2024 benefits. About 7% of Americans will see an ‘IRMAA’ surcharge on their Medicare premiums. Read on to learn more about IRMAA. What is IRMAA? IRMAA stands for Income-Related Monthly Adjustment Amount. It is an additional fee levied on top of the basic Medicare Part B and D premiums for those above certain annual income thresholds. How is IRMAA determined? Your IRMAA amount depends on your tax filing status and income. These charts from Medicareresources.org show the IRMAA amounts at various income levels (called tiers) for Medicare Part B and D premiums in 2024. Medicare uses your …
