A Retirement Fact Sheet

Retirement Fact Sheet

Some specifics about the “second act.”

Does your vision of retirement align with the facts? Here are some noteworthy financial and lifestyle facts about life after 50 that might surprise you. 

 

Up to 85% of a retiree’s Social Security income can be taxed. Some retirees are taken aback when they discover this. In addition to the Internal Revenue Service, 13 states currently levy taxes on some or all Social Security retirement benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. (West Virginia, incidentally, is phasing out such taxation.)1

 

Retirees get a slightly larger standard deduction on their federal taxes. Actually, this is true for all taxpayers aged 65 and older, whether they are retired or not. Right now, the standard deduction for a single filer in this age bracket is $13,850, compared to $12,200 for those 64 or younger. It is scheduled to rise to $14,050 in 2020.2

     

Retirees can still use IRAs to save for retirement. There is no age limit for contributing to a Roth IRA, as long as the owner earns income. So, a retiree can keep directing money into a Roth IRA for life, provided they are not earning too much. A senior can potentially contribute to a traditional IRA until the year they turn 70½.3

 

A significant percentage of retirees are carrying big debts. Looking at data from the Federal Reserve’s triennial Surveys of Consumer Finances, the median debt of senior households (age 65+) has more than doubled since the start of the century.4

 

The most stressful debt for seniors, according to a 2019 study from Ohio State University researchers, is credit card debt. The study calculates that each new dollar of credit card debt taken on by a senior household creates financial stress approximating an additional $14-20 of home loan debt.4

 

Moreover, a sudden financial liability may delay retirement. Another 2019 study, co-authored by researchers from the Urban Institute and the Congressional Budget Office, looks at the potential impact of a new $10,000 debt on an individual between 55-70 years old carrying the median amount of credit card debt for their age. The researchers concluded that this jump in debt would make a baby boomer 9% more likely to put off retiring.4

           

Fewer seniors live alone than you may think. The Administration for Community Living (a federal agency) says around 14% of older adults (65+) live by themselves. With millennials living at home and blended and extended families becoming common, perhaps this is not so surprising. The ACL does note that nearly half of women older than age 75 are on their own.5

   

Just 15% of women say they have a retirement strategy set down in writing. This factoid comes from the 2019 Transamerica Retirement Survey of American Workers. Another 42% say they have unwritten strategies. The remaining 43%? No strategy at all.6

   

Few older Americans budget for travel expenses. While retirees certainly love to travel, a Merrill Lynch study says that only about a third of people aged 50 and older earmark funds for their trips.7

   

What financial facts should you consider as you retire? What monetary realities might you need to acknowledge as your retirement progresses from one phase to the next? The reality of retirement may surprise you. If you have not met with a financial professional about your retirement savings and income needs, you may wish to do so. When it comes to retirement, the more information you have, the better. 

Citations.

1 – aarp.org/retirement/social-security/questions-answers/how-is-ss-taxed.html [4/9/19]

2 – efile.com/tax-deduction/federal-standard-deduction/ [12/4/19]

3 – investopedia.com/ask/answers/03/120403.asp [11/8/19]

4 – nextavenue.org/retirement-older-americans-debt/ [8/9/19]

5 – forbes.com/sites/howardgleckman/2018/05/04/a-new-snapshot-of-older-adults-in-the-us/ [5/4/18]

6 – transamericacenter.org/docs/default-source/women-and-retirement/tcrs2019_op_women_and_retirement_fact_sheet.pdf [11/19]

7 – kiplinger.com/article/retirement/T037-C032-S014-5-surprising-facts-to-know-about-retirement.html [11/11/19]

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

Subscribe to our Newsletter

By subscribing to our mailing list you will always be updated with the latest news from us.  We never spam!

Our Post Archives

More Articles to Explore

get in touch

  • 513-791-8899
  • gwilliams@crownmail.net
  • 8160 Corporate Park Dr
    Suite 210
    Cincinnati OH 45242
  • Open in Google Maps

Weekly Newsletter

Get updates with our latest insights.  We never spam!

Stuff we have to say

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP (with flame logo)®, which it awards to individuals who successfully complete initial and ongoing certification requirements. CHARTERED RETIREMENT PLANNING COUNSELORsm and CRPC® are registered service marks of the College for Financial Planning®. DISCLAIMER: This web-site is for informational purposes only and does not constitute a solicitation or offer to sell securities in states where we are not licensed. Gary L Williams is licensed in the states of Ohio and Kentucky for securities, life insurance, and variable products. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this web-site should be interpreted to state or imply that past results are an indication of future performance. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the user. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY LINKED WEB-SITE. Some material on this website prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

© 2018 Gary L Williams. All Rights Reserved.

Gary L Williams Registered Representative, Registered Investment Advisory Associate
Securities and Investment Advisory services offered through Crown Capital Securities LP 8160 Corporate Park Dr Ste 210 Cincinnati OH 45242 513-791-8899 Member FINRA, SIPC

Want My Job Loss Checklist?

Subscribe for regular updates with personal finance tips and actionable ideas starting with my Checklist.

Unsubscribe with 1 click at any time.

I hate SPAM and promise to keep your email address safe.
 
Already subscribed? Submit anyway. You won’t be added to my list twice, don’t worry.