Challenges Facing Aging Taxpayers

Retirement planning has grown increasingly difficult due to demographic, social, and financial factors. From rising health care costs to longer life expectancy rates, and an estimated 10,000 Baby Boomers turning 65 each day, future retirees are faced with many challenges.

So, what is the best strategy for aging taxpayers to ensure that they will have enough money to sustain their lifestyle after retirement and cover possible long-term health care costs as they age? Unfortunately, there is not a simple answer. Financial planners do suggest considering the following factors.

  • If you believe that Social Security will be a viable benefit when you retire, you will want to determine the best strategy to maximize these benefits. AARP and T.Rowe Price have free online calculators to help taxpayers determine how and when to claim benefits. You may also, for a nominal fee, use certain websites such as www.maximizeMySocialSecurity.com  and www.SocialSecurityChoices.com.
  • As long-term care costs continue to rapidly increase, do your current assets allow for self-insuring or should you consider purchasing Long Term Care Insurance?
  • If you are more concerned with “running out of money” or “dying with too much money leftover,” you may want to begin monitoring your expenditures closely and re-evaluating your financial positions quarterly.

What are your options for the money that is in your employer’s retirement plan? The amount of the monthly payout will depend on the amount in the account and your age. Remember to consider your tax bracket when you begin taking distributions as these are taxed at your ordinary income tax rate.

For more information, contact Padgett Business Services in Bothell, Washington at (425) 408-1695. We handle your bookkeeping, accounting, tax (personal & business) and payroll needs – so you can focus on what makes you money. Serving Bothell, Lynnwood, Kenmore, Mill Creek and surrounding areas.

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