January 19, 2015
What you don’t know can hurt you when it comes to planning your retirement. Test your knowledge of Social Security, Medicare, IRAs, 401(k) plans and more.
Are you buying the real thing?
Mobile payments: Are they safe?
Low-quality counterfeit goods could prove dangerous
Protect yourself from counterfeit products and fraud when shopping online
Guide to Power Strips and Surge Protectors
Ask UL: Cooking Safety
Ask the Expert: LED and CFL Light Bulbs
Southwire Recalls Wi-Fi Switches Due to Fire Hazard
Louis Garneau Recalls Bicycle Helmets Due to Risk of Head Injury
eheat Recalls Envi Wall Heaters Due to Overheating and Burn Hazard...
How much income should a typical family try to save each year for retirement?
That’s according to the Center for Retirement Research at Boston College, which also estimates that more than half of U.S. households are falling short.
How old do you have to be to open a retirement account?
Anyone with earned income can start a retirement account, including kids who baby-sit or have part-time jobs. If they’re still minors, their parents can set up a custodial IRA. Thanks to tax-free compounding, the account could grow into a sizeable sum by the time Junior is a senior.
If you have kids, when should you get them a Social Security number?
The Social Security Administration recommends getting a Social Security number for children as soon as they are born. Although that isn’t mandatory, kids do need one to be claimed as dependents on your tax return.
Which is more important to save for?
Selfish as it may seem, most financial planners will tell you that your retirement is priority #1. If need be, your child can borrow money to attend college, but you can’t borrow money to retire.
When you change employers, what should you do with your 401(k) account?
If you cash in your 401(k), you’ll face taxes and early withdrawal penalties. Plus, the money will be gone when you retire. Rolling it over into an IRA, where it can continue to grow, tax-free, is a better idea. You may also be able to leave your 401(k) in your former employer’s plan or roll it into your new employer’s.
A spouse who doesn't work outside the home can have an IRA.
If a married couple files a joint tax return, both spouses can contribute to their own IRAs as long as one of them had earned income. The “nonworking” spouse is eligible for what is now known as a Kay Bailey Hutchison Spousal IRA. The IRS explains the rules in Publication 590 on its website.
At what age can you begin to take Social Security retirement benefits?
The big caveat: If you start at 62, your monthly benefit could be 25 to 30 percent less than if you waited until your “full” retirement age, which ranges from 65 to 67, based on your birth year. What’s more, your benefits will be reduced permanently. The longer you wait, up to age 70, the more you’ll get each month.
A spouse can take Social Security benefits based on the other spouse's work record.
Married people can take benefits based on either their own work record or their spouse’s. This is also true for divorced spouses who haven’t remarried, if they meet certain other requirements, as explained on the Social Security website.
People become eligible for Medicare health coverage at:
If you retire before 65, you’ll need to find health insurance in the meantime. (There are some exceptions for people with disabilities or certain illnesses.) The Social Security Administration recommends signing up for Medicare three months before your 65th birthday.
When you start to take money out of your IRA, it will be:
Withdrawals from a traditional IRA are taxable, but those from a Roth IRA aren’t taxed if you’re 59 ½ or older and have had the account for at least five years
You can begin to make withdrawals from an Individual Retirement Account penalty-free at:
There are a few exceptions, but most of us have to wait until 59 ½.
After you retire, your living expenses will probably:
Some expenses, such as commuting, will fall, but others, such as travel and hobbies, often rise. So don’t be surprised if you find yourself spending even more, especially in the early and most active years of retirement.
You scored out of 12
© 2020 SafeBee. All Rights Reserved.