Tax time is almost here again. Are you one of those filers who wait until the last minute? You’re not alone. Unfortunately, procrastination can be costly, especially in retirement when every dollar count. If you wait, you may rush and that may cause you to miss valuable deductions, credits, and other strategies.
 
The good news is you still have time to prepare. Below are five actions you can take today to get prepared for tax time and possibly save yourself some money. If you haven’t gotten started on your tax planning, now is the time to do so.

Get organized early. 

Time is a valuable asset, especially when it comes to tax planning. Take time now to organize all your receipts for major purchases, especially for things that may be deductible like business expenses or health care costs.
 
You should also use this time to get all your 1099s, W2s, and other income documents in order. If you haven’t received some yet, call the appropriate administrator and ask for one. The earlier you can ballpark your total income for the year, the sooner you can start analyzing possible deductions and credits.

Track your medical expenses. 

Did you have major medical expenses in 2019? If so, those expenses could save you tax dollars. You can deduct medical expenses that exceed 10% of your adjusted gross income in 2019.1
 
Of course, you need to know how much you had in medical expenses and be able to document those costs to take advantage of this deduction. Track down all statements and receipts to find a total. You also may want to contact your health care provider for documentation if necessary.

Make a retirement contribution. 

Do you have a traditional IRA? If so, you still have time to make a contribution and potentially realize a tax deduction. In a traditional IRA, your contributions are tax-deductible, assuming you meet certain income restrictions. Growth is tax-deferred and your withdrawals in retirement are taxed as income.
 
You can make a deduction up to April 15 and count it as a 2019 contribution. In 2019, you can contribute up to $6,000, or $7,000 if you are 50 or older.2 If you haven’t yet met the maximum, you can still do so and possibly see a deduction on your upcoming return.

Take your RMD. 

If you’re age 70 ½ or older, your tax issues may not involve contributions but rather withdrawals. At age 70 ½, you are required to start taking minimum distributions from your 401(k), IRA, or other qualified accounts. These required minimum distributions (RMDs) amounts are based on your account balances and your age.
 
What happens if you don’t take your RMD? You could face a penalty of up to 50% of the required withdrawal amount.3 Fortunately, you have until April to take your RMD for 2019. If you haven’t done so yet, now is the time to make that distribution.

Think about the future. 

Tax planning isn’t just about your upcoming return. It’s also about your long-term future. What steps can you take now to reduce your tax exposure ion future returns?
 
For example, perhaps you could create tax-efficient income in retirement. Maybe you can take advantage of additional deductions and credits by planning ahead. You may be able to reduce your taxable income by delaying your Social Security filing. A financial professional can help you explore these options and develop the right strategy for your needs.
 
Ready to take control of your taxes this year? Let’s talk about it. Contact us at Marshall Life and Financial Solutions, Inc. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://turbotax.intuit.com/tax-tips/health-care/can-i-claim-medical-expenses-on-my-taxes/L1htkVqq9
2https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-contributions
3https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#9
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
19562 - 2019/12/16

As a married couple, your life is often marked by milestones. There’s the day you met and the day you married. You buy a house and perhaps welcome children. You celebrate anniversaries and birthdays and advances in your careers.

And then there’s the ultimate milestone - retirement. That’s the day you are both able to leave the working world behind and live life on your own terms. You can spend your time however you wish. You can travel, pursue new hobbies, spend time with family, and generally do whatever you wish. Life should be perfect, right.
 
Not necessarily.
 
Data from researchers at Bowling Green State University shows that divorce rates are at 40-year lows for every demographic except one - those over age 55. Divorce rates for those ages 55 to 64 tripled between 1990 and 2017. For those over age 65, the rate has more than tripled.1
 
Why are retirees and near retirees divorcing at record rates? There are plenty of theories with no concrete answers. However, one possible cause is that couples haven’t adequately planned for spending retirement together.
 
Retirement can be the happiest time of your life, but only if you prepare for it that way. Below are a few points for you and your spouse to discuss as you approach retirement. If you haven’t had these conversations, now may be the time to do so.

Talk about your goals. 

You probably have your own vision for retirement. Maybe it includes playing golf or traveling the world. Or maybe you want to start a second career or even volunteer for a favorite cause.
 
But what happens if your spouse has different ideas about how to spend retirement? For example, you may want to travel but your spouse would rather spend time with the grandkids. Your spouse wants to buy a lake house, but you’d rather travel to various locations instead of just one. These disagreements can create serious conflict within a marriage.
 
Talk about these potential points of conflict now, before you reach retirement. Be creative to find a middle ground so you can both do what you want in retirement. Perhaps you spend time supporting each other’s goals. You may even decide to pursue some interests separately. A conversation today will help you avoid arguments in the future.

Plan your time. 

According to the Bureau of Labor Statistics, the average American spends 8.8 hours per day at work. That’s 44 hours per week. That’s a lot of time that you’ll have to replace after you retire.2
 
When you first retire, you may find that amount of free time to be overwhelming. Some retirees find themselves lost without the purpose that comes from a busy career. If you replace all those hours with time home alone with your spouse, it could place stress on the relationship.
 
Instead, think ahead about how you will spend your time, both with your spouse and individually. Together time is important, but you both will also likely need independent activities and lives. Now is the time to explore various hobbies or other pursuits that could keep you busy in retirement.

Make a budget. 

Money can be a major cause of conflict in marriages. Sometimes it’s because there simply is not enough money to pay the bills. In other cases, it’s because the two spouses have differing opinions on how the money should be used.
 
A budget can eliminate these conflicts, even in retirement. More than a third of Americans don’t use a budget.3 If you’re in that group, now may be the time to make a change. A budget puts your spending goals into writing. You can both agree on how your retirement assets will be spent. You can also make sure your spending is appropriate and your assets will last through retirement. A budget can help you avoid some nasty arguments and issues down the road.
 
Ready to plan the next phase for you and your spouse? Let’s talk about it. Contact us today at Marshall Life and Financial Solutions, Inc. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.wsj.com/articles/the-divorce-rate-is-at-a-40-year-low-unless-youre-55-or-older-11561116601
2https://www.cnbc.com/2017/05/03/how-the-8-hour-workday-changed-how-americans-work.html
3https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019----although-they-think-everyone-else-should-300824384.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
19561 - 2019/12/16

Retirement is supposed to be a joyous occasion. After all, this is the time when you get to leave the constraints of a busy career behind. You’re free to set your own schedule and spend your time as you wish. There’s no boss to report to. No clients to manage. No big projects to complete. You’re free to do whatever you like.
 
So why is retirement so difficult for many people? Very often, new retirees realize that this new phase of their life isn’t all they had expected. They miss socializing with their colleagues at work. Without a job, they feel a lack of purpose. They have trouble transitioning to life at home. In fact, a recent study showed that retirees were twice as likely to suffer from depression as those who are still working.1
 
The good news is you can take steps to ease into retirement and pave the way for a smooth transition. Below are a few tips to consider as you leave the working world:

Structure your day. 

During your career, you likely had a set schedule. You had tasks, obligations, and goals you wanted to achieve. You may have even had a to-do list.
 
Just because you’re retired doesn’t mean you have to abandon that structure. If you get comfort from having a list of tasks or objectives, keep doing it in retirement. Set a schedule for the next day. Instead of focusing on work-related tasks, you can pursue a new hobby, meet with friends, or even do something nice for your grandchildren. A structured day could help you fulfill your need for productive activity.

Set short-term goals or milestones. 

At work, you’re always looking forward to the next milestone. Maybe it’s landing a new client or finishing a big project. In retirement, you may not get that same feeling of achievement or success.
 
In retirement, you may feel depressed or anxious without a similar set of goals or objectives. Just because you’re no longer working doesn’t mean you can’t have goals. Plan a big vacation for you and your spouse. Take up a new activity or hobby and set goals for yourself. You could even volunteer for a favorite charity and take on a big fundraiser or similar project. You could coach your grandchild’s sports team. By setting short-term goals you can give your retirement a sense of purpose.
 
Make new friends. 

Maybe you think of your coworkers as friends or maybe you think of them as merely colleagues and acquaintances. Either way, they may play a major role in your social life. They’re a source of adult interaction and socialization. After you retire, you may find that you miss your coworkers and the daily conversation you have with them.
 
Socialization isn’t just important for your mood and happiness. It’s also important for you health. A recent study found that retirees with large social networks had a 26% lesser chance of developing dementia.2
 
Look for opportunities to make new friends in retirement. You could pursue a hobby or join a group of like-minded people. You could volunteer. Many community centers offer outings and activities for retirees. Be proactive in expanding your social circle. It could make your retirement happier and even healthier.
 
Ready to plan your transition into retirement? Let’s talk about it. Contact us today at Marshall Life and Financial Solutions, Inc. We can help you analyze your needs and develop a strategy.
 
1https://www.usatoday.com/story/money/2019/06/11/depression-during-retirement-how-cope-and-prepare/1416091001/
2https://brainworldmagazine.com/friends-with-benefits-socializing-to-fight-alzheimers/
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
19535 - 2019/12/10