July 31st highlights for Your Safe Money Show

 Make plans to tune into Your Safe Money Show this Saturday morning (July 31st) at 8 at Nice 95.5FM KBEK. We’ll look at the financial effects of losing a spouse. This is never an easy discussion but it’s important to understand. If you have an old 401(k) account or accounts, what do you do with that money? I’ll explain. And the price for used cars are crazy right now. What does that mean for auto insurance costs? KBEK streams live at kbek.com. Hear recent shows at our podcast page at yoursafemoneyshow.com.

Happy Wednesday!

 

Possible COLA for 2022 for Social security benefits

 The Kiplinger Letter is forecasting that the annual cost-of-living adjustment for Social Security benefits for 2022 will be 6.3%, the biggest jump since 1982, when benefits rose 7.4%. That would also be higher than The Kiplinger Letter predicted earlier this year.

The final adjustment in October could be a little different, as the inflation rate for July through September has yet to be determined.

Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers. If prices don’t increase or fall, the COLA is zero. That happened in 2010 and 2011, as the economy struggled to recover from the Great Recession, and again in 2016, when plummeting oil prices wiped out the COLA for that year. In 2020, the COLA increased payouts by 1.3%.

We'll know in October but for now the COLA for Social Security benefits for 2022 is trending higher. If you have questions go to yoursafemoneyshow.com.

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Highlights for your July 24th edition of Your Safe Money Show

 Your Safe Money Show is heard on Nice 95.5 FM KBEK, Saturday mornings at 8. They stream live at kbek.com. On this weeks show if you're ready to save a million dollars I have strategies that can help you toward that goal. I'll also have ways you as a homeowner can save that you might not realize. And if you're doing estate planning The Secure Act can affect what you do going forward. If you can't listen "live" on Saturdays go to our podcast page at yoursafemoneyshow.com.

A little humor for your Wednesday

 

Charitable Gift Deductions

 Charitable Gift Deductions: For the 2020 tax year, a new "above-the-line" deduction was allowed for up to $300 of charitable cash contributions. Only people who claimed the standard deduction on their tax return (rather than claiming itemized deductions on Schedule A) could take this deduction.

The write-off was originally scheduled to expire after 2020, but it was later extended to 2021 – with one important enhancement. For 2020, one deduction was allowed per return, meaning married couples who filed jointly could only deduct $300, not $600. However, for 2021, one deduction is allowed per person, which means married couples can deduct up to $600 on a joint 2021 tax return.

The 2020 suspension of the 60%-of-AGI limit on deductions for cash donations by people who itemize was also extended through the 2021 tax year. If you have questions call 320-679-5183 or go to yoursafemoneyshow.com.

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Your Safe Money Show highlights for July 17th

 Coming up on this Saturday's (July 17th) Your Safe Money Show. I have questions for you about Social Security benefits, you can see what you know or don't know. Also I'll have questions that retirees get wrong about taxes in retirement and there is a financial silver lining when it comes to the pandemic, I'll explain. Listen at 8 a.m. at Nice 95.5 FM KBEK. They stream live at kbek.com. Hear recent shows at our podcast page at yoursafemoneyshow.com

What does Medicare NOT cover

 A reminder about Medicare. While Medicare covers your health care, it generally does not cover long-term care—an important distinction. Under certain conditions, particularly after a hospitalization to treat an acute-care episode, Medicare will pay for medically necessary skilled-nursing facility or home health care. But Medicare generally does not cover costs for "custodial care"—that is, care that helps you with activities of daily living, such as dressing and bathing. To cover those costs, you will have to rely on your savings, long-term-care insurance or Medicaid—if you meet the income and asset requirements. Traditional Medicare also doesn't cover routine dental or eye care and some items such as dentures or hearing aids.

What does FICA mean?

 This in one of the more common questions i get about Social Security. This question and answer are right from the ssa.gov website. Q17:  What does FICA mean and why are Social Security taxes called FICA contributions?

A:  Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes." In the original 1935 law the benefit provisions were in Title II of the Act and the taxing provisions were in a separate title, Title VIII. As part of the 1939 Amendments, the Title VIII taxing provisions were taken out of the Social Security Act and placed in the Internal Revenue Code. Since it wouldn't make any sense to call this new section of the Internal Revenue Code "Title VIII," it was renamed the "Federal Insurance Contributions Act." So FICA is nothing more than the tax provisions of the Social Security Act, as they appear in the Internal Revenue Code.

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Highlights for our July 10th Your Safe Money Show

 For the July 10th edition of Your Safe Money Show we'll discuss grandparents raising their grandchildren the joys and challenges that can bring. Also we'll share the benefits of working longer and non-financial assets to consider in your estate plan. Listen at 8 a.m. Saturday at Nice 95.5 FM KBEK. They stream live at kbek.com. Hear recent shows at our podcast page at yoursafemoneyshow.com.

2021 tax information with retirement accounts

 Just a reminder on tax changes and amounts for 2021.

Many key dollar limits on retirement plans and IRAs remain the same for 2021. For example, the maximum contribution limits for 401(k), 403(b) and 457 plans stay at $19,500, while people born before 1972 can once again put in $6,500 more as a "catch-up" contribution. The 2021 cap on contributions to SIMPLE IRAs also stays the same at $13,500, plus an extra $3,000 for people age 50 and up.

The 2021 contribution limit for traditional IRAs and Roth IRAs also stays steady at $6,000, plus $1,000 as an additional catch-up contribution for individuals age 50 and up. However, the income ceilings on Roth IRA contributions went up. Contributions phase out in 2021 at adjusted gross incomes (AGIs) of $198,000 to $208,000 for couples and $125,000 to $140,000 for singles (up from $196,000 to $206,000 and $124,000 to $139,000, respectively, for 2020). If you have question call 320-679-5183 or go to yoursafemoneyshow.com.

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Closed on July 5th

 Sjoberg & Holmstrom Financial Services and Your Safe Money Show will be closed on Monday July 5th.

We will be open at 8 a.m. Tuesday July 6th. We will monitor messages at 320-679-5183.

Your Safe Money Show topics for July 3rd

 Coming up on Saturday's (July 3rd) edition of Your Safe Money Show. Now is the time for a mid-year review so you can take control of your money if needed. I also want to look at strategies to teach children financial independence. And I have 5 tips for buying a home this summer in this tough buyers’ market with housing. Tune on at Nice 95.5 KBEK at 8 a.m. KBEK streams live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.