Search found 432 matches
- Mon Feb 20, 2023 2:45 pm
- Forum: Personal Investments
- Topic: Sell in taxable to contribute 100% of income to retirement?
- Replies: 28
- Views: 1898
Re: Sell in taxable to contribute 100% of income to retirement?
Hey, Bogleheads. tl;dr: My question is basically: Is it worth selling 20k in taxable to cover my living expenses so that I can contribute 100% of my income to tax-advantaged accounts? More details: I make 53k and have access to 52k in tax-advantaged space: - IRA: 7k - 403b: 22.5k (+4% match) - 457b: 22.5k Current assets: - Taxable: 100k - Roth IRA: 50k - Traditional 403b: 20.5k Last year, I didn't use this to its full advantage and just maxed the IRA and the 403b. This year I am thinking about doing the following: - Contribute 7k to Roth IRA - Contribute 22.5k to Roth 403b -Contribute 22.5k to Traditional 457b - Sell 20k in taxable to cover living expenses After all of that, my taxable income will be 30.5k making my marginal tax rate 12%. ...
- Mon Feb 20, 2023 10:29 am
- Forum: Personal Finance (Not Investing)
- Topic: Help me calculate and understand how much my parents can spend in retirement?
- Replies: 22
- Views: 2702
Re: Help me calculate and understand how much my parents can spend in retirement?
[deleted accidental duplicate post]
- Mon Feb 20, 2023 10:29 am
- Forum: Personal Finance (Not Investing)
- Topic: Help me calculate and understand how much my parents can spend in retirement?
- Replies: 22
- Views: 2702
Re: Help me calculate and understand how much my parents can spend in retirement?
If I were you, my advice to my parents would be would be based on the answers to additional questions:
What are their current monthly expenses?
Do they have long-term care insurance?
What is the current annual cost of nursing home care in your (or their) area? Of assisted living?
Is their house wheelchair accessible? Do they anticipate ever moving to a different house, whether for disability reasons or other reasons?
What are their current monthly expenses?
Do they have long-term care insurance?
What is the current annual cost of nursing home care in your (or their) area? Of assisted living?
Is their house wheelchair accessible? Do they anticipate ever moving to a different house, whether for disability reasons or other reasons?
- Mon Feb 20, 2023 10:07 am
- Forum: Personal Investments
- Topic: Social Security bridge money
- Replies: 23
- Views: 4624
Re: Social Security bridge money
Thanks for the replies. Yes, I've checked out opensocialsecurity.com ( https://www.bogleheads.org/forum/viewtopic.php?p=5756927#p5756927 ) and it was helpful. The recommendation is for me to wait till age 70, while my spouse takes hers at 62 - I'm not sure I'll wait that long but it seems to be good insurance for me to wait at least a few years. The spouse recommendation of 62 was my recommendation from Open Security as well, but then I realized that that was based on a normal lifespan. Because I am healthy and have good genes, I checked the box at the top of the home page: Certain situations require additional input. Click here __ to select situation(s) that may apply to you (and/or your spouse, if filing jointly). [I added underlines whe...
- Sun Feb 19, 2023 8:54 pm
- Forum: Personal Finance (Not Investing)
- Topic: 1099-INT from US Treasury
- Replies: 23
- Views: 3036
Re: 1099-INT from US Treasury
This is all you should receive and should contain all the information that you need to prepare your tax returns.I have a receipt that shows how much interest I earned.
(Edited to fix quote.)
- Sun Feb 19, 2023 8:51 pm
- Forum: Personal Investments
- Topic: Questions for Edward Jones advisor
- Replies: 63
- Views: 6695
Re: Questions for Edward Jones advisor
My questions are pretty straightforward. If you found yourself in a similar situation, what questions would you ask the EJ advisor? I have been in a similar situation, and I would ask the EJ advisor no questions. I would not meet with him. You can probably determine from the EJ statements what most of the fees are and whether the investments are appropriate for an 80 year old. In my situation, I met with my relative and the advisor because I thought that I would be able to determine what the fees were. The advisor told my relative that he didn’t charge any fees, which is what she had previously thought, telling me that the adviser was doing it for free. She thought it was a free service of the bank with which the adviser was associated. I ...
- Fri Feb 17, 2023 2:38 pm
- Forum: Personal Finance (Not Investing)
- Topic: Correct date to use for Bypass trust?
- Replies: 4
- Views: 546
Re: Correct date to use for Bypass trust?
Thanks for your reply. I think that some information is missing and that the best course is to ask the attorney for an explanation. I was halfway hoping (because it would make things clearer) that your answer would be: I looked again at the recorded deed, and it actually says that the other owner is the John Smith Testamentary Trust dated March xx, 2014, or something similar, so the attorney is correct. I lean toward believing that the attorney is right because it appears that he is saying that your father’s will created the bypass trust. Your father’s date of death would then be the date of creation (because of course the date of death caused the will’s provisions to go into effect). I cannot figure out how it would have been possible for ...
- Wed Feb 15, 2023 9:08 pm
- Forum: Personal Finance (Not Investing)
- Topic: Correct date to use for Bypass trust?
- Replies: 4
- Views: 546
Re: Correct date to use for Bypass trust?
The answer to your question depends on the answers to other questions:
1. Which entity currently owns the property in question, as evidenced by the recorded deed?
2. On which date was that entity formed?
1. Which entity currently owns the property in question, as evidenced by the recorded deed?
2. On which date was that entity formed?
- Fri Feb 10, 2023 6:08 pm
- Forum: Personal Investments
- Topic: Strategies for Gifting Money to Kids To Minimize Co-Mingling of Assets Going Forward
- Replies: 57
- Views: 5222
Re: Strategies for Gifting Money to Kids To Minimize Co-Mingling of Assets Going Forward
Is your primary goal to give money to your descendants in a manner that would keep the funds under the control of your descendants in the event your child (now a minor) later marries and then divorces? Why do you want avoid informing the IRS of the gift? Are you trying to hide illegal income (in which case I can’t help you) or do you just want to avoid filling out the form? Perhaps you could set up a 529 account with yourself as the owner and your child as the beneficiary. Even if your state doesn’t offer a state income tax deduction, the earnings will grow tax free. Then if your child doesn’t ultimately use all the money in the 529 account for education expenses, you can change the beneficiary to your child’s child or to another of your de...
- Tue Feb 07, 2023 1:48 pm
- Forum: Personal Consumer Issues
- Topic: Scam letter? Collection agency for IRS?
- Replies: 34
- Views: 3865
Re: Scam letter? Collection agency for IRS?
This seems a bit fishy to me, but enough is legit so thought I'd ask here. We moved into our current home roughly 8 years ago. Prior to our purchase, the home was rented out for several years, and I believe one of the renters was associated with a business that has since gone out of business. There is a debt collector (Coast Professional Inc) that has been sending mail to our home (as a Contractor of the IRS), addressed to the business I'm assuming was tied to one of the renters prior to our obtaining the home. Outside of a business name, there aren't any individuals listed on the mail. The debt itself is purported to be a tax debt in the sum of $20K (original tax due + penalties) Questions: 1) I didn't think the IRS leveraged 3rd parties ...
- Sat Feb 04, 2023 11:53 am
- Forum: Investing - Theory, News & General
- Topic: Inflation, do you really have to out earn it?
- Replies: 91
- Views: 6889
Re: Inflation, do you really have to out earn it?
Inflation affects even the person who owns a home without a mortgage loan if he or she ever hopes to move again (particularly without selling the current home first). Inflation in home prices in such a situation means:
1. The amount of cash needed for a 20 percent down payment for the new house will increase (and if obtaining the additional funds results in a taxable event, taxes will increase);
2. The dollar amount for the selling commission when the current house is sold will increase;
3. The new mortgage (to be paid off when the current house is sold) might have to be a jumbo mortgage, with stricter underwriting requirements;
4. Closing costs will increase.
1. The amount of cash needed for a 20 percent down payment for the new house will increase (and if obtaining the additional funds results in a taxable event, taxes will increase);
2. The dollar amount for the selling commission when the current house is sold will increase;
3. The new mortgage (to be paid off when the current house is sold) might have to be a jumbo mortgage, with stricter underwriting requirements;
4. Closing costs will increase.
- Sat Feb 04, 2023 11:21 am
- Forum: Personal Investments
- Topic: From which accounts should my mom gift a large sum of money?
- Replies: 90
- Views: 8657
Re: From which accounts should my mom gift a large sum of money?
The OP should carefully consider the comments about long-term care made above. Also, the OP’s mother might also prefer a single room in a skilled nursing facility rather than the shared room that Medicaid would provide (with the corresponding loss of privacy, reduced room for visitors, or possibility of a loud, intrusive, or abusive roommate, about all of which I am personally familiar). As a matter of policy, some facilities won’t allow family members to pay the differential to allow the Medicaid recipient to have a private room. I agree with prior comments about a possible sham transaction. If the money the mother is “gifting” is going into a separate account that is being saved for her future needs, and therefore doesn’t benefit her desc...
- Sat Feb 04, 2023 10:48 am
- Forum: Personal Investments
- Topic: percentage of holdings that are government obligations for state taxes 2022?
- Replies: 15
- Views: 4023
Re: percentage of holdings that are government obligations for state taxes 2022?
If you are seeking info in order to determine the amount of investment income that is exempt from state income taxes, you don’t need the percentage of holdings (as your title states) but the percentage of income from US government obligations (except to the extent that your state requires a certain minimum percentage of holdings from US government obligations, as discussed above).
The link that TimothyB provided is valuable because it provides other information about tax deductibility of income from government obligations in addition to the forthcoming link to the income percentages.
The link that TimothyB provided is valuable because it provides other information about tax deductibility of income from government obligations in addition to the forthcoming link to the income percentages.
- Tue Jan 17, 2023 5:11 pm
- Forum: Personal Investments
- Topic: Investing for elderly mother-in-law--opinions please?
- Replies: 75
- Views: 6173
Re: Investing for elderly mother-in-law--opinions please?
Thanks again--here is my issue: she went to assisted living in Portland, Oregon, near her older son. Her younger son, my husband, and I live in New York City. So my brother-in-law would have to be willing to take the lead on the Fidelity transfer. I suppose we cannot do it from here. I will look up the thread you mention about Vanguard vs Fidelity. I live in a different state from those of my mother and my MIL, and that has absolutely no effect on my ability to establish accounts for them with Vanguard and Fidelity. The Fidelity accounts were established fairly recently. After I contacted Fidelity to obtain the required forms, Fidelity assigned me a very helpful rep who walked me through the process and was available to answer questions. H...
- Tue Jan 03, 2023 9:56 pm
- Forum: Personal Finance (Not Investing)
- Topic: Elder care - Gaining power of attorney for father with dementia
- Replies: 42
- Views: 4645
Re: Elder care - Gaining power of attorney for father with dementia
Very important detail - he lives in North Carolina. That is indeed an important detail. NC has adopted the Uniform POA Act, which requires third parties (with certain exceptions) to accept a validly executed and notarized POA, and imposes timelines for acceptance or rejection. You can read the details here: https://civil.sog.unc.edu/third-party-refusals-to-accept-a-power-of-attorney-under-the-new-north-carolina-uniform-power-of-attorney-act/ My experience was that Vanguard required use of its own form but Fidelity didn’t, so it was easier to transfer the principal’s funds to Fidelity than to Vanguard (and easy enough that we didn’t pursue the issue with Vanguard). Fidelity’s legal team reviewed the POA and discovered an error made by the p...
- Sun Oct 09, 2022 9:58 pm
- Forum: Personal Finance (Not Investing)
- Topic: Maximizing employer contributions
- Replies: 2
- Views: 308
Re: Maximizing employer contributions
The best approach is to read the language in the summary description of your plan. If it is unclear to you, please post the language here!
The excess won’t be returned to you next year; the employer will stop transferring money from your paycheck to your 401k when the maximum is reached.
The excess won’t be returned to you next year; the employer will stop transferring money from your paycheck to your 401k when the maximum is reached.
- Fri Oct 07, 2022 4:08 pm
- Forum: Personal Finance (Not Investing)
- Topic: Trust/Tax question
- Replies: 38
- Views: 2977
Re: Trust/Tax question
You are correct that the part you bolded refers to the final year. The part that deals with intervening years is (with boldface that I added for emphasis): d) Capital losses. Losses from the sale or exchange of capital assets shall first be netted at the trust level against any gains from the sale or exchange of capital assets, except for a capital gain that is utilized under paragraph (b)(3) of this section in determining the amount that is distributed or required to be distributed to a particular beneficiary. See § 1.642(h)-1 with respect to capital loss carryovers in the year of final termination of an estate or trust. Paragraph (b)(3) says: (3) Allocated to corpus but actually distributed to the beneficiary or utilized by the fiduciary...
- Fri Oct 07, 2022 10:58 am
- Forum: Personal Finance (Not Investing)
- Topic: Trust/Tax question
- Replies: 38
- Views: 2977
Re: Trust/Tax question
I believe that this is the relevant regulation: https://www.law.cornell.edu/cfr/text/26/1.643(a)-3 The section on capital losses states: (d) Capital losses. Losses from the sale or exchange of capital assets shall first be netted at the trust level against any gains from the sale or exchange of capital assets, except for a capital gain that is utilized under paragraph (b)(3) of this section in determining the amount that is distributed or required to be distributed to a particular beneficiary. See § 1.642(h)-1 with respect to capital loss carryovers in the year of final termination of an estate or trust. One would need to read the entire regulation to get a fuller understanding of the rule, but note that the phrase “the terms of the govern...
- Fri Oct 07, 2022 9:57 am
- Forum: Personal Finance (Not Investing)
- Topic: Trust/Tax question
- Replies: 38
- Views: 2977
Re: Trust/Tax question
I believe that this is the relevant regulation: https://www.law.cornell.edu/cfr/text/26/1.643(a)-3 The section on capital losses states: (d) Capital losses. Losses from the sale or exchange of capital assets shall first be netted at the trust level against any gains from the sale or exchange of capital assets, except for a capital gain that is utilized under paragraph (b)(3) of this section in determining the amount that is distributed or required to be distributed to a particular beneficiary. See § 1.642(h)-1 with respect to capital loss carryovers in the year of final termination of an estate or trust. One would need to read the entire regulation to get a fuller understanding of the rule, but note that the phrase “the terms of the governi...
- Mon Oct 03, 2022 9:11 pm
- Forum: Personal Consumer Issues
- Topic: Car Insurer Demanding Transfer of Ownership before Settlement
- Replies: 7
- Views: 1239
Re: Car Insurer Demanding Transfer of Ownership before Settlement
I heard from the insurer today and progress is being made. Thanks for your responses!
- Mon Oct 03, 2022 11:12 am
- Forum: Personal Consumer Issues
- Topic: Car Insurer Demanding Transfer of Ownership before Settlement
- Replies: 7
- Views: 1239
Re: Car Insurer Demanding Transfer of Ownership before Settlement
...The insurer made an offer about a month after the accident. Last week, I provided the claims rep with details of two higher nearby comparables and an improvement that the insurer didn’t record as being present. It has been several days since I did so, with no response from the insurer towards reaching a settlement. ...I would like the insurer to respond to my emails, to work toward a mutually-agreeable settlement number, and to refrain from sending any threatening letters to my relatives. Are you an attorney or do you have a power of attorney for this family member? If not, the insurer has no obligation to discuss the matter with you or respond to your contacts to them and if they are prudent they would not enter settlement negotiations...
- Sun Oct 02, 2022 11:19 pm
- Forum: Personal Consumer Issues
- Topic: Car Insurer Demanding Transfer of Ownership before Settlement
- Replies: 7
- Views: 1239
Re: Car Insurer Demanding Transfer of Ownership before Settlement
Bumping in hopes of advice.
- Sun Oct 02, 2022 9:16 pm
- Forum: Personal Investments
- Topic: Alternative to High Interest Savings Account
- Replies: 40
- Views: 5930
Re: Alternative to High Interest Savings Account
OP, Why would you contribute to 529 when you can save even more taxes by max contributing to 401K and HSA? Don't consider 529 until you have done that. In a recession, folks unemployed and usually the housing market crashes too. If you don't sell the rental now, how do you know that you would not be unemployed in the coming recession? And, it could be while your kids are in college. Sell you rental would be my recommendation. KlangFool Someone could want to contribute to a 529 even when they can save more on taxes by maximizing 401(k) and HSA contributions because her goal is not to maximize tax savings; it is to fund retirement and college educations . In a state that offers state tax benefits for contributions to 529s that constitute mon...
- Sun Oct 02, 2022 9:12 pm
- Forum: Personal Consumer Issues
- Topic: Car Insurer Demanding Transfer of Ownership before Settlement
- Replies: 7
- Views: 1239
Car Insurer Demanding Transfer of Ownership before Settlement
I am helping elderly relatives whose car was totaled in an accident deemed to be the fault of my relative who was driving. Their insurer is demanding that my relatives sign blank documents transferring the car to the insurer now, before a final settlement is reached, and is threatening to begin the process to declare the car “abandoned” if they don’t do so immediately. The car has been released to the insurer and it is truly not repairable. The insurer made an offer about a month after the accident. Last week, I provided the claims rep with details of two higher nearby comparables and an improvement that the insurer didn’t record as being present. It has been several days since I did so, with no response from the insurer towards reaching a ...
- Tue Sep 06, 2022 6:52 pm
- Forum: Personal Investments
- Topic: Alternative to High Interest Savings Account
- Replies: 40
- Views: 5930
Re: Alternative to High Interest Savings Account
OP, Why would you contribute to 529 when you can save even more taxes by max contributing to 401K and HSA? Don't consider 529 until you have done that. In a recession, folks unemployed and usually the housing market crashes too. If you don't sell the rental now, how do you know that you would not be unemployed in the coming recession? And, it could be while your kids are in college. Sell you rental would be my recommendation. KlangFool Someone could want to contribute to a 529 even when they can save more on taxes by maximizing 401(k) and HSA contributions because her goal is not to maximize tax savings; it is to fund retirement and college educations. In a state that offers state tax benefits for contributions to 529s that constitute mone...
- Tue Sep 06, 2022 6:45 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can you buy a house using a 401k as an income source?
- Replies: 7
- Views: 1574
Re: Can you buy a house using a 401k as an income source?
Ask a mortgage broker in your area. In the place I might move for my retirement home, a mortgage broker told me that I should take 401(k) withdrawals for several months in order for the lender to include the income from the 401(k) withdrawals in their computations for purposes of mortgage loan qualification.
- Mon Sep 05, 2022 10:28 pm
- Forum: Personal Investments
- Topic: Alternative to High Interest Savings Account
- Replies: 40
- Views: 5930
Re: Alternative to High Interest Savings Account
Virginia allows a deduction on state taxes for contributions of up to $4000 per year to each 529 account. Therefore, you can receive state tax deductions of up to $16,000 per year for 529 contributions:
1. 529 you own with child 1 as beneficiary.
2. 529 you own with child 2 as beneficiary.
3. 529 your spouse owns with child 1 as beneficiary.
4. 529 your spouse owns with child 2 as beneficiary.
1. 529 you own with child 1 as beneficiary.
2. 529 you own with child 2 as beneficiary.
3. 529 your spouse owns with child 1 as beneficiary.
4. 529 your spouse owns with child 2 as beneficiary.
- Fri Sep 02, 2022 10:28 pm
- Forum: Personal Consumer Issues
- Topic: Europe Trip 2023 Summer
- Replies: 63
- Views: 5744
Re: Europe Trip 2023 Summer
I have traveled extensively in Europe with children, the youngest of which was 10, and I can state that while your itinerary might be geographically possible, I would consider it a nightmare. While you would be able to check off having been to various places, you would not really experience any of them. Transportation, packing and unpacking, and getting your bearings in a new place would consume most of your time. Consider whether your children can each pack and unpack their own suitcases and are able to carry all their own clothes for a month. Planning ahead to wash clothes partway through would be essential. Also, what are your children’s particular interests? What languages other than English do you speak? Regarding reservations, would y...
- Wed Aug 17, 2022 9:58 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
The concepts in the last paragraph are new to me. Are you saying that it is possible to annuitize the whole life policy in order to reduce the assets of the owner, thereby converting the asset into income, without doing a conversion? If so, how does one do that in practical terms? You take the cash value of the policy and annuitize it for a lifetime income. Now you have no more life insurance or cash value, just an income stream. Or you can 1035 exchange to a SPIA at another company to accomplish the same thing. I cannot say whether there would be implications with Medicaid qualification, you need to consult an attorney. Regardless, you said the face amount is about 40k. The cash value is probably substantially less. Is this too small to e...
- Wed Aug 17, 2022 9:52 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
It’s not clear to me if that 3rd party is another insurance company and with an unusual annuity since they discussed time period payments. It seems to lack details possibly purposefully. Purposefully, for sure. It's a third party, a standard life settlement. Except instead of a lump sum purchase, they are spreading the payments over time. If it was another insurance company with an unusual annuity, payments would be based on the cash value of the whole life policy. Which could be accomplished by an ordinary 1035 exchange to any SPIA, or even annuitizing the policy itself. The concepts in the last paragraph are new to me. Are you saying that it is possible to annuitize the whole life policy in order to reduce the assets of the owner, thereb...
- Tue Aug 16, 2022 9:09 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
I, too, received the ‘Noncovered Earnings’ statement with my 2022 Benefits statement last month. Read this https://www.ssa.gov/pubs/EN-05-10045.pdf but am still scratching my head. • 57 yo and plan to start Social Security (SSA) in 10-13 years. • Retired in 2021 • 5 years of high school and college jobs (below ‘substantial earnings’ limit) + 25 years of career work (above ‘substantial earnings’ limit). • Never worked outside of the U.S. • Do not and will not have a pension • Never had an employer option to contribute to anything but a 401(k) • Am not aware of ever not paying into SSA • I called the SSA. Rep could not tell me the years, employer, etc. being flagged. Said something like, ‘Don’t worry. Everyone gets this.’ • DH has the same b...
- Tue Aug 16, 2022 9:05 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
It’s not clear to me if that 3rd party is another insurance company and with an unusual annuity since they discussed time period payments. It seems to lack details possibly purposefully. Purposefully, for sure. It's a third party, a standard life settlement. Except instead of a lump sum purchase, they are spreading the payments over time. If it was another insurance company with an unusual annuity, payments would be based on the cash value of the whole life policy. Which could be accomplished by an ordinary 1035 exchange to any SPIA, or even annuitizing the policy itself. The concepts in the last paragraph are new to me. Are you saying that it is possible to annuitize the whole life policy in order to reduce the assets of the owner, thereb...
- Mon Aug 15, 2022 5:05 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
If the couple hasn’t already done so, they should consult ASAP with an experienced elder law attorney in their state of residence. How close is the couple to being eligible for Medicaid based on their current countable assets? What is the current cash surrender value of the life insurance policy? Will the community spouse’s monthly income from all sources (SS, pension, etc.) exceed the state’s maximum monthly needs allowance? ——————————- Thank you, everyone for your responses! There is a lot to consider, so I will start by answering some good questions. If the couple hasn’t already done so, they should consult ASAP with an experienced elder law attorney in their state of residence. Attorney: I could not agree more. The couple first consult...
- Sun Aug 14, 2022 11:16 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
You probably need to talk to a lawyer who specializes in this. Unlikely this is a good option. Medicaid is for when you run out of money and has a 5 year look back. Considering it appears he already is in a facility, I’m not sure you have a lot of options. Yes, that is good advice, and I plan to consult an expert in the field. (I am a retired attorney, but didn’t practice in this field). I found introductory info about converting the whole life policy on the attorney’s website, which is why I posted, to see if other Bogleheads had had experience with this, so I can be prepared before meeting with the attorney. We are in the spend-down phase, and during this phase, we need to make sure the SNF resident’s funds are used for his care, and tha...
- Sun Aug 14, 2022 6:48 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
Thanks for clarifying. We have no idea how long the nursing home resident will live, and we aren’t trying to preserve money for heirs (other than making sure that the community spouse has enough).Rex66 wrote: ↑Sun Aug 14, 2022 4:08 pm No I’m saying if he or she will die soon then use loans to pay until it’s used up. That way you get the remaining death benefit. If life expectancy is long then probably no money will be left. You actually have to be doing real care for the new policy to pay. It isn’t a way to shuffle the money to heirs.
- Sun Aug 14, 2022 3:55 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Re: Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
Thanks for responding!
The SNF resident will stay where he is regardless of this decision.
My understanding was that there are only two choices for Medicaid qualification to reduce assets below $2,000: cash out the policy or convert it to long term care benefits. Are you saying that Medicaid won’t count the policy as his asset if he borrows against it? If that is an option, how does that work in practical terms?
We don’t anticipate any money to be available for heirs, as the SNF resident or his wife (in Medicaid terms, the “community spouse”) will need it all for living expenses.
The SNF resident will stay where he is regardless of this decision.
My understanding was that there are only two choices for Medicaid qualification to reduce assets below $2,000: cash out the policy or convert it to long term care benefits. Are you saying that Medicaid won’t count the policy as his asset if he borrows against it? If that is an option, how does that work in practical terms?
We don’t anticipate any money to be available for heirs, as the SNF resident or his wife (in Medicaid terms, the “community spouse”) will need it all for living expenses.
- Sun Aug 14, 2022 3:30 pm
- Forum: Personal Finance (Not Investing)
- Topic: Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
- Replies: 20
- Views: 1628
Whole Life Insurance Conversion to LT Care Benefit Plan for Medicaid SNF Planning
For Medicaid qualification purposes, a SNF resident may have a maximum amount of assets, as determined by the state ($2,000 in my case). As a result, owners of whole life insurance policies in amounts greater than that amount must redeem them or convert them to a “long term care benefit plan” or “Life Care Funding.” I have read everything relevant that I could find online, including an overview at:
https://www.payingforseniorcare.com/lif ... nefit-plan
Have you had any experience with life insurance conversions for Medicaid planning purposes?
https://www.payingforseniorcare.com/lif ... nefit-plan
Have you had any experience with life insurance conversions for Medicaid planning purposes?
- Sun Aug 14, 2022 3:22 pm
- Forum: Personal Finance (Not Investing)
- Topic: Costs, Pros, & Cons of CCRC - Continuing Care Retirement Communities - Aging in Place. Pitfalls?
- Replies: 99
- Views: 17403
Re: Costs, Pros, & Cons of CCRC - Continuing Care Retirement Communities - Aging in Place. Pitfalls?
The half consists of both assisted living (less costly) and skilled nursing (more costly). CCRCs have both. Weirdly, the CCRC that's my current top choice has no assisted living. They offer suggestions for external services but don't provide them themselves, just independent living and skilled nursing. I would definitely prefer a proper second tier but it's still the best choice for me at the moment. I'm a single childless person and this offers much less of a gamble than trying to stay in my house. If it is possible to obtain personal care services in an independent living home, you might prefer that. In a CCRC with which I am familiar, the independent living apartments and homes are redone to the new entrant’s specifications (within limi...
- Sun Aug 14, 2022 12:59 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
Same here. It would be fine if it included “may,” but it states it as a fact (which is erroneous.)jeffyscott wrote: ↑Sun Aug 14, 2022 10:56 amNo, it does not say "may", it states it as a fact, assuming it is this: https://www.ssa.gov/myaccount/assets/ma ... rnings.pdf
It is really ridiculous, if they just send this out to everyone with a 457 or 403(b). But good to know, as that may be the explanation for me, as well.
- Sat Aug 13, 2022 8:05 pm
- Forum: Personal Finance (Not Investing)
- Topic: Social security fund insolvency and planning
- Replies: 38
- Views: 4844
Re: Social security fund insolvency and planning
The Bogleheads Retirement Portfolio Model provides an entry to take a potential future SS shortfall into account. The default amount is 20 percent.
https://www.bogleheads.org/wiki/Retiree_Portfolio_Model
https://www.bogleheads.org/wiki/Retiree_Portfolio_Model
- Sat Aug 13, 2022 7:51 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
substantial (SS-covered) earnings is an effectively well defined term. SSA maintains and each year extends a table that defines the thresholds across the years. As of today a top-google-hit PDF document with the table embedded including the number for 2022 is at Windfall Elimination Program . The WEP effect is to reduce the multiplier to the first bend point from 0.9 to as much as as 0.4, which limiting case applies if the year count of substantial SS earnings is less than or equal to 20. If the year count of substantial SS-covered earnings is between 20 and 30 then the factor is prorated between 0.4 and 0.9. If there are >= 30 years of substantial SS earnings then WEP doesn't apply. Additionally, WEP is capped at one half of the value of ...
- Sat Aug 13, 2022 7:37 pm
- Forum: Personal Investments
- Topic: Vanguard taxable beneficiary question
- Replies: 37
- Views: 3785
Re: Vanguard taxable beneficiary question
Thank you for posting! I will double check my accounts!
- Sat Aug 13, 2022 3:48 pm
- Forum: Personal Investments
- Topic: Vanguard taxable beneficiary question
- Replies: 37
- Views: 3785
Re: Vanguard taxable beneficiary question
I urge you to write a memo listing the names of the people you would like to be guardians of your children in the event you and your spouse die, leaving survivors. You can do this today so that you have something in writing should this happen in the weeks before you finish your wills. Please put it in a safe but discoverable place in your house, not in a safe deposit box. This won’t be a problem at the current ages of your children, but note that Vanguard doesn’t allow “per stirpes” designations. This means that if you die before one of your children does, and he has children, his children will inherit nothing; your surviving child will receive everything. As a result, it could be preferable to leave the beneficiary designations at Vanguard...
- Fri Aug 12, 2022 10:22 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
When I file for SS benefits in a couple of years, I plan to simply indicate that I am not receiving any pension based on income not subject to SS tax. If they disagree, the onus is on them to prove otherwise. I would like to believe that your last statement is true, but I am not sure. For individual income tax purposes, the onus is on us to prove that we are entitled to our deductions, etc. For social security benefit payments, the SSA is the one with the money. I called up SSA today and had a long talk about the "You Have Earnings Not Covered by Social Security" notice. The SSA person went over my record very carefully, including looking in a database for evidence of my receiving a pension (which I do not and will not). He said ...
- Fri Aug 12, 2022 9:46 pm
- Forum: Personal Finance (Not Investing)
- Topic: [8/27/22 UPDATE] Advice Re: Purchase of Title XIX/Medicaid-Compliant Annuity for Parent
- Replies: 5
- Views: 718
Re: Advice Re: Purchase of Title XIX/Medicaid-Compliant Annuity for Parent
I have been researching this topic, as my family is in spend-down mode.
To answer one of your questions:
Yes, the Medicaid-compliant annuity must have specific language, which in general is detailed here (most of the way down the page.)
https://www.medicaidplanningassistance. ... y-annuity/
Medicaid is a federal program that is administered by the state, so state law might have additional requirements. Both your estate lawyer and the annuity issuer should know how to word it correctly with no problem.
To answer one of your questions:
Yes, the Medicaid-compliant annuity must have specific language, which in general is detailed here (most of the way down the page.)
https://www.medicaidplanningassistance. ... y-annuity/
Medicaid is a federal program that is administered by the state, so state law might have additional requirements. Both your estate lawyer and the annuity issuer should know how to word it correctly with no problem.
- Fri Aug 12, 2022 9:34 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
When I file for SS benefits in a couple of years, I plan to simply indicate that I am not receiving any pension based on income not subject to SS tax. If they disagree, the onus is on them to prove otherwise. I would like to believe that your last statement is true, but I am not sure. For individual income tax purposes, the onus is on us to prove that we are entitled to our deductions, etc. For social security benefit payments, the SSA is the one with the money. I called up SSA today and had a long talk about the "You Have Earnings Not Covered by Social Security" notice. The SSA person went over my record very carefully, including looking in a database for evidence of my receiving a pension (which I do not and will not). He said ...
- Fri Aug 12, 2022 9:28 pm
- Forum: Personal Investments
- Topic: Series EE Savings Bond - Taxation Question
- Replies: 21
- Views: 1896
Re: Series EE Savings Bond - Taxation Question
Whether the bonds are paper or electronic, and regardless of when you redeem them, the interest is taxable at maturity if not before. If you redeem paper bonds in 2023, the bank will probably issue you a 2023 tax form for the interest, but that doesn’t change the fact that the bonds matured in 2022, and therefore must be declared on 2022 taxes. The last phrase in the quote below is applicable here. Source: https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eetaxconsider.htm When must I report the interest on my tax form? You have a choice. You can report the interest every year put off (defer) reporting the interest until you file a federal income tax return for the year in which the first of these events occurs: you c...
- Thu Aug 11, 2022 3:25 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
When I file for SS benefits in a couple of years, I plan to simply indicate that I am not receiving any pension based on income not subject to SS tax. If they disagree, the onus is on them to prove otherwise. I would like to believe that your last statement is true, but I am not sure. For individual income tax purposes, the onus is on us to prove that we are entitled to our deductions, etc. For social security benefit payments, the SSA is the one with the money. My interpretation of the matter too, I started my application for SS a couple of weeks ago. I am subject to the WEP which both myself and the SSA knew. But what counts and what doesn't for WEP calculation was not terribly clear. I tried unsucessfully 4 times in previous years to cl...
- Thu Aug 11, 2022 3:20 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
...Yes, the earnings shown in the SSA account were what we expect, because for the vast majority of them, the amount shown is the maximum amount subject to social security, and as a result, the exact dollar amount earned doesn’t appear on the statement. So on the face of it the SSA notice would seem to be correct. If your earnings exceeded the SSA maximum and you worked overseas you would have had earnings not covered by SSA. I don't think its a real issue however. When I first read the title, that I was my interpretation, too. I recognize that I copied only the title and a few phrases in the notice; the notice itself refers to the following phrases that indicate that the test is not whether one met the maximum, but whether the job itself ...
- Thu Aug 11, 2022 2:24 pm
- Forum: Personal Finance (Not Investing)
- Topic: SSA erroneously claims “You have earnings not covered by social security”
- Replies: 29
- Views: 3397
Re: SSA erroneously claims “You have earnings not covered by social security”
I would like to believe that your last statement is true, but I am not sure.
For individual income tax purposes, the onus is on us to prove that we are entitled to our deductions, etc.
For social security benefit payments, the SSA is the one with the money.