Bonnie replied to the topic What is the minimum annual income I need to make to start paying taxes ? in the forum Tax 9 months ago
The simple answer is if you earn less than your standard deduction, then you would be liable to any taxes.
In 2020, The standard deduction for individuals is $12,400 and $24,800 for married couples. This is before additional tax credits such as child tax credit which is another $2000 per child over your standard deduction.
Bonnie replied to the topic Will social security be able to sustain all the boomers coming in? in the forum Social Security 9 months ago
Social security is never designed to replace all your expenses. In 2019, assuming someone who has worked all of his or her adult life, it is estimated to replace about 38% of your earnings in 2019.
Bonnie replied to the topic When is the best time to retire? What are the factors I should consider? in the forum Retirement 9 months ago
This really depends on your lifestyle needs and your health status. Here is a simple rule of thumb:
1. Try to pay down your debt as much as possible
2. Make sure that your Social Security Income can cover your essential expenses (food, living expense, healthcare etc)
3. Withdraw no more than 4% of your savings to pay for your non essential…[Read more]
Nothing. You aren’t eligible until 65 anyway. If you want to retire earlier, you would need to go the the Healthcare Exchange to shop your healthcare plan.
If you are at a low tax rate (but expecting future tax rate to rise) either because just started working or taking a temporary sabbatical, I would invest in a Roth IRA. You pay taxes now but no taxes at withdrawal. You tradeoff lower tax rate now against higher tax rate in the future. This is particularly true if you expect the overall tax…[Read more]
Bonnie replied to the topic Would you recommend buying stocks directly? Can I do it online? How much should in the forum Investing 9 months ago
This is an interesting question. It all depends on how much knowledge and experience you have. If you are investing in high risk stock, make sure this is not going to devastate your long term goals because while the upside is high, the downside can also be pretty extreme. So, invest only what you can spare. If you are investing in Blue Chip…[Read more]
Bonnie replied to the topic Is it true that Long Term Care is the most important insurance to buy ? in the forum Insurance 9 months ago
It really depends. The worse thing is you start but can’t afford to continue, then the insurance stops
If you have sufficient money to self fund, then you don’t need it. The rule of thumb is if you have $250,000 or $500,000 for a couple (outside your real estate), then you won’t need the insurance.
But, selling assets for liquidity is always…[Read more]
This also depends on how complex your financial status is. This is another complicated area. It depends on how much control and how you want to leave your benefits to your beneficiary. For most financial instruments such as 401(k), life insurance, there is a designated beneficiary already. It is about real estate (also depends on how this is…[Read more]
Bonnie replied to the topic I am already drowning in debt. How can I even start managing what I don't have? in the forum Debt Management 9 months ago
I would first explore consolidating my debt. First check out your bank or financial institutions that you have a relation with. See if you can get a lower rate. There are many online debt consolidation company. Here is something recommended by Consumer Resources. It is simpler to monitor one payment instead of multiple payments. You might…[Read more]
Bonnie replied to the topic Is there a simple way to budget? I don't have the time to do this. in the forum Budgeting 9 months ago
I highly recommend that you at least do it once, so you know what are your spending habits. There are a lot of softwares (FREE) to assist. I would recommend at least trying the Excel Personal Monthly Budget.
Easy thing is to “Pay Yourself First”, put away at least 10% to 15% of your income into your 401(k) for retirement saving. After that…[Read more]
I highly recommend not to. If you take your money out before 59 1/2, there is a 10% penalty. If you take a loan out, considering it is before tax contribution, the money that you return back to your account is after tax money. So, when you withdraw, you will need to pay tax again, so you pay tax twice. No smart!!!