According to a Consumer Finance article, using a social security account makes it easier to track, manage and plan in preparation for collection benefits. A social security account can be an incredible planning tool for helping seniors to evaluate their retirement and estate planning goals. Interested in learning more? Columbus Home Care Assistance shares how seniors can protect their finances using a social security account online:
- Planning Ahead – Seniors can avoid having to worry about whether or not they will have enough income to cover their monthly obligations. A social security account allows one to forecast just how much will be received on a monthly basis at the current savings rate. One can adjust their retirement accordingly to meet their budget and future care needs such as assisted living or live-in care in Columbus.
- Considering Taxes – Many seniors are under the impression that their social security benefits will not be taxed. Up to 85 percent of one’s social security benefits can be taxed legally and tax rate hinges on the person’s income when benefits are collected. Provisional income factors in the senior’s adjusted gross income and any interest accrued on his or her benefits. The taxable income can be half of the dollar amount of benefits or half of the amount of income generated above a certain threshold. Single individuals with a tax income under $25,000 do not have to worry about their benefits being taxed.
- Estate Planning – Social security benefits are also considered in estate planning. Reviewing the account regularly gives a clear picture of what monthly benefits can be expected of survivors if one passes. This can also help one make the appropriate plans for life insurance and other estate planning considerations upon retirement.
- Investing – Developing an investment strategy using a social security account puts seniors in a position to lower their taxes. Some people decide to convert their taxable income into a Roth just before their social security benefits are used. If done strategically, a person can pay a minimal amount at a lower tax rate by distributing payments over time.
An estimated 50 million retires will be eligible to receive social security benefits. Make sure you or your aging loved one have a plan in place to receive these benefits and enjoy security and happiness in the future.
For more information about senior care and planning, contact Home Care Assistance of Columbus at 614-481-8888 and schedule a complimentary, no-obligation consultation.