The following is an email I received from a client:
I’ve been talking with Brad concerning my taxes, and a point came up about GA taxes being applied to my RMD’ s. According to him I qualify for a program called ” Retirement Income Exclusions “. Bottom line is I don’t need to have GA state taxes applied to my RMD’s. Which also means I get more $$ per pay period, and that’s a really good thing!
The Retirement Income Exclusion applies in many States, here is what is says:
Retirement income exclusion refers to the exclusion of taxes on retirement income12. The first $6,000 of retirement income received by anyone 65 years of age or older is exempt starting in 2023. To take this exclusion, the pensioner or retirement income recipient must meet one of the following conditions: 1) 55 years of age or older on December 31, 2021, 2) disabled, or 3) a surviving spouse or a survivor having an insurable interest in an individual who has qualified for the exclusion in 2021 on the basis of age or disability.*

*Investopedia

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Generally, surprises when doing your taxes are not good, most people find they need to pay more, some have the pleasant surprise of getting an unexpected refund. My surprise was different.
I was supposed to be a CPA (according to my Dad) vs a CFP. ® I am so happy I have gone the CFP® path, but I still do my own taxes.
This year when I printed off my return to file, yes, I like to mail my return vs. e-file, at the bottom of the return it said 104S2023 Form 1040-SR., I thought what is that? Then I looked it up. Here is what it is: 2023 Form 1040-SR. Department of the Treasury—Internal Revenue Service. U.S. Tax Return for Seniors.
UGG! I guess I cannot avoid the fact that both my Husband and I fall into this category, but I will still act like a 12-year-old!

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401k savings are under attack. The attitude from some is that “allowing people to shelter their retirement money from taxes is a policy that largely favors the well-heeled.”*
Alicia Munnell, an assistant treasury secretary under President Clinton, argues for rolling back the federal tax expenditure for retirement plan contributions and redirecting the savings to Social Security. Full repeal would fix three-fourths of Social Security’s long-term funding gap.
I feel that if the Social Security Fund were used for the purposes originally stated when it was started, and enforcement against those who are abusing the system are taken off the Social Security rolls, the trust fund could heal itself. Another change to Social Security that could help extend the life of the fund would be to credit those who delay 5% vs the current 8% increase in benefits. A little saving could go a long way to help the Social Security Trust Fund.

*USAToday3/21/24

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Often when I meet new clients, and I am reviewing their current accounts, I notice that they always have a primary beneficiary listed on their retirement accounts, but no contingent beneficiary. Generally, no attention is paid to this beneficiary listing, but it is an important one. Most people list their spouse or significant other as a primary beneficiary, which is natural. I don’t know about you, but I often move around town with my husband. G-d forbid the unthinkable happens, if I had not listed our daughter as contingent beneficiary, my accounts would have to go through probate. Probate is a slow and costly experience that no one wants to deal with.
Please look at your retirement accounts and life insurance policies to make sure you have contingent beneficiaries listed. For your non-retirement accounts you can add a Transfer on Death designation to add beneficiaries and avoid probate on these accounts.

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This is a question I have gotten from a number of my clients this year. A 1099 is the tax form sent out by investment companies for taxable gains and income. We all know that if you roll your 401(k) to an IRA, this is a non-taxable event. The 1099 that my clients have been receiving is a 1099-R, indicating that the funds were rolled over and this is a non-taxable event. Please, do not panic if you have processed a rollover and get a 1099.

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1. Look at your spending. Many people think that all they will need to pull from their investments in retirement is 4% of what they have accumulated. Does this apply to you? In my experience, the 4% rule does not work for everyone. We look at many different expenses of everyday life, plus inflation when planning the withdrawal stage for my clients.

2. What does your portfolio look like? What I am asking is; what is your mix between cash, equity funds, and income funds? Do you have quality funds that will stand the test of time and your changing income needs?

3. Plan for taxes and inflation. These two items will potentially take the biggest bite out of your retirement nest egg. Taxes tend to be the biggest unknown when planning for retirement because as our leaders change, often the taxes change. As far as inflation goes, depending on the CPI used at any given time to calculate inflation, we have no idea if rates will go up or down.

4. Take control of your retirement. You can control the outflow of funds and make sure you have regular reviews with your CFP professional to make sure you stay on track.

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Social Security is often talked about as a major component of retirement. Here are a few changes that are in the works, will they help or hurt you?
The COLA for 2024 will be 3.2% — a decline of two-thirds from this year’s adjustment but still above the 2.6% average over the past couple of decades.
The maximum amount of earnings subject to the Social Security payroll tax will increase to $168,600 in 2024 from $160,200 in 2023.
The maximum Social Security benefit for a worker retiring at full retirement age will rise to $3,822 in 2024 from $3,627 in 2023.
If you also continue to work after filing for Social Security retirement benefits, you might be subject to an earnings test if you earn a certain amount of money. In 2024, the earnings exempt from the retirement earnings test will increase to $22,320 from $21,240 in 2023, according to the Social Security Administration. For every $2 in earnings above that limit, $1 in benefits will be withheld. These earnings rules no longer apply once you hit full retirement age. *
Most of these changes are good, please consider them all when filing for Social Security.

*Material sourced from MSN article 1/31/24

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I know the year has just started, but you want to make sure it starts off in the right direction. Here are some To-Do’s for you to consider implementing before the month is over.
Save More for Retirement
This year you can save more in your workplace 401(k) retirement savings account. The maximum contribution has increased from $18,500 in 2018 to $19,000, so consider increasing the amount you are contributing, making sure you’re saving at least enough to get your employer match.
Consider Rebalancing Your Portfolio
To bring your portfolio back into balance, you may need to shift money from your winning investments into those that are lagging. That will probably require you to take profits in your highest-flying stock funds, which could be a timely move.
Stick to a Budget
Creating a budget is much easier than sticking to a budget, and as a result many attempts at curbing spending fall flat. Set yourself up for success by adding a budget to your financial to-do list this month.
Consider Professional Financial Advice
A financial adviser can help you make sure your finances on track and being managed correctly. But remember that not all financial advisers are created equal.
There are two types: Those who are required to give advice that is in your best interest, and those who are held to a less rigorous standard of being required to recommend “suitable” products and strategies. The former is called a fiduciary and is the preferable way to go to avoid potential conflicts of interest.

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Creeps are, well, creepy, especially when they have to do with taxes. Are you familiar with “Tax Bracket Creep”? This is what it means:
Bracket creep is a situation where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power. This is a problem during periods of high inflation, as income tax codes typically take longer to change than the rate of inflation.
This is something many of us are dealing with right now. Now is the time to look at your retirement accounts to make sure you are contributing as much as you can pre-tax so this creep will not knock on your door.

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Now is the time of year when many people are assessing their retirement savings. I am being asked should I contribute to my pre-tax or post-tax plan? My question is; when do you want to pay the tax? Let’s look at a few questions that are important to your retirement savings.
Should you save to a Traditional IRA or a Roth? Also, do you contribute to the pre-tax portion of your 401(k) or to the Roth 401(k)? The question is, can you afford to wait 5 years or more for your Roth withdrawals to be tax-free? Roth contributions must be deposited at least 5 years for the withdrawals to be tax free. Maybe a combination of both works best.
When should you start taking Social Security? I never want someone to pull before Full Retirement Age due to the fact that you will take a permanent 30% cut in your Social Security. Every year past Full Retirement Age that you wait you will receive an 8% increase in your Social Security. My recommendation is to wait past Full Retirement Age if possible.

Lastly, take a hard look at your spending. Can you pay cash for your items? By this I mean, when you receive your credit card bill, can you pay it in full? If not, you need to ask with each purchase – is this a need or a want item? Controlling your spending will help lead to a comfortable retirement.

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