How To Sign Up For A COVID-19 Vaccine In Your State

 Check out this resource for finding the vaccine: https://www.npr.org/sections/health-shots/

Use NPR's tool to find out where to start when it's your turn to get the COVID-19 vaccine. Plus, helpful advice about how to navigate the system.

Do you know the details on how credit cards work?

 Check out this resource:

How Do Credit Cards Work?

https://cadencebank.com/fresh-insights/personal/how-do-credit-cards-work

It's a great short lesson for newcomers to credit cards and a reminder for people who have been using credit cards for years. Learn how to be an effective credit card user, including how to improve your credit score.  Following are some tips. get the details at the URL above.

·  Pay your balance in full every month.

·  Always pay your bill on time.

·  Check your account regularly.

·  Set up account notifications.

·  Create a budget and stick to it.

·  Use your credit card rewards.

The simplest way to be sure to pay your bill on time is to set up an automatic payment. Set up a budget and don't exceed that amount; be sure the money is in your checking account. Besides avoiding late fees, this method will also avoid interest, which can be hefty.

Tax Season Starts. Why file early?

 One reason to file your federal income tax return promptly this year is that it might result in a higher stimulus payment on the next round which President Biden has proposed. The IRS is likely to base the payments on either 2019 or 2020 income. If your 2020 income is lower than 2019 as is true for many Americans, filing soon may result in a higher stimulus payment on the next round.

Income Tax Standard Deductions for 2020

 It's tax prep time for 2020 income. Don't forget that unemployment insurance is taxable but stimulus payments are not taxed.

The basic Standard Deduction (SD) is $12,400 for a single filer or married filing separately. Double the amount for joint filers and qualifying widow(er)s: $24,800.

For those born before January 2, 1956 or blind: add an extra $1,650 to the SD.

If two spouses are over 65, their SD is $27,400.

The much higher SD is the reason that few taxpayers itemize deductions.

How much does a C-section Cost? $6,241 Or $60,584

 That's the headline on front page of The Wall Street Journal on Feb. 12, 2021. "The rate the hospital charges depends on the insurance plan covering the birth." The bottom price if for Medicaid recipients and the top price is for women who are insured but whose plans don't include the hospital in question. 

Data on rates that hospital negotiate with insurers is beginning to become available. "The submissions also illuminate how widely prices vary--even for the same procedure, performed in the same facility--depending on who is paying." 

"It is shining a light on the insanity of U.S healthcare pricing" said Niall Brennam chief executive of the Health Care Cost Institute, a nonprofit that analyzes medical costs.

Other cost variation examples: 

Major heart procedure with complex patient: Medicare patient: $89,752; out of network insurers are charged $515,697! That's a spread of $425,945!

Non-cervical spinal fusion ranges from $50,000 to $250,000.

Hip or knee replacement: $15,000 to $75,000. 

Don't you think it is time for a single payer health plan for Americans. No one else in the world has to deal with such insanity.

Thanks to WSJ writers: Anna Wilde Mathews, Tom McGinty, and Melanie Evans.

Raising the Minimum Wage to $15/hour

 I guess I was fortunate to be entering the low wage workforce as a teenage when the minimum wage was equivalent to $12/hour in 2021. 

For those people who oppose raising the minimum wage to $15/hour, check out the wisdom from the Pearls Before Swine comic strip by Stephan Pastis  (2/14/21): https://www.gocomics.com/pearlsbeforeswine

Since 1978 the Average American worker had an 11% increase in compensation. During same time period average CEO pay increase 940%.

Tax problems from remote work

 If you've been working remotely (as an employee or self-employed) from outside your "home" state, you may have to file income tax returns and pay taxes in more than one state. For people who have been traveling around and visiting multiple states... ouch! First find out if your "remote" state has an income tax. seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming — levy no state income tax; New Hampshire and Tennessee, don't tax earned wages. New York and California are "famously aggressive" about taxing remote workers according to Laura Saunders, writing for The Wall Street Journal, the source of much of this info. 

About 15 states (& DC) have cross border agreements with adjoining states to not tax workers temporarily WFH due to the coronavirus. Employers include info on where the worker earned money on W-2 forms. Tax preparers will also ask questions.

Each state tax system is unique with rules for how long a worker is in residence, how much income is earned, and the worker's true home state. You may be eligible for a credit to prevent or reduce double taxation. 

Find out the criteria for being a taxable resident in the states where you worked in 2020.

If your job is based in New York, Arkansas, Connecticut, Delaware, Nebraska or Pennsylvania but you worked in another state: the "convenience" rule taxes an individual on where a job is based, not where they reside or actually work. you may end up being taxed by the state where your job is based as well as by the state where you actually worked.

Sources of help: your employer, AICPA: https://www.aicpa.org/

 

Retirement Income: REPLACING SOME BONDS WITH ANNUITIES

"If you want to maximize how much you can safely spend in retirement, some economists say, sell some of your bonds and buy lifetime income annuities," according to Neal Templin, writing for the Feb. 8, 2021 Wall Street Journal. 

"While you’re still working, a diversified portfolio of stocks and bonds is an efficient way to save for retirement. But once you’ve retired and are drawing down that nest egg, income annuities can outperform bonds, some economists’ research shows."

"The most efficient portfolio for retirees consists of stocks and income annuities, says Wade Pfau, a professor of retirement income at the American College of Financial Services. The annuities provide dependable income, while the stocks provide growth, cover unexpected expenses and help leave a legacy for heirs."

But what about the 4% rule or guideline? That's the strategy of spending 4% of your nest egg each year, adjusting for inflation. Lots of problems with this strategy, especially for non-nerds. It takes a lot of attention to detail, decisions on which investments to sell, an iron will to stick to the strategy when the market goes crazy (almost every month in this century), and potentially wide swings in yearly income. Do you still want (and be mentally able) play with spreadsheets and make wise decisions when you're 85? Remember the research that found our ability to handle money declines with age. The 4% guideline comes from research in 1994 based on the era when bonds actually paid a decent return. 

We know that retirees are happiest when they have a reliable source of income. Remember pensions? Annuities are a way to create your own pension.

Specific example from Dr. Pfau:

"Consider a 65-year-old retired woman who has a $1 million nest egg, is risk-averse and wants to finance her retirement entirely through bonds. She is a nonsmoker, in average health. According to actuarial tables, there is a 22% chance she’ll live 30 more years. She decides to build a bond ladder that will run out of money when she’s 95 years old. At current interest rates, such a portfolio could provide her with around $42,000 a year for 30 years, Dr. Pfau calculates. If she instead used her $1 million for an income annuity, she could currently get around $54,000 a year from a range of insurers. One insurer, American Equity, has been offering a payout of more than $61,500."

"Social Security is itself an inflation-adjusted income annuity, and it’s usually smart to max it out by not claiming until age 70 before you buy a private annuity. That’s because Social Security is more generous in how it calculates payouts than other annuities. Your Social Security pension rises 8% for each year you delay claiming beyond your full retirement age."

You don't want to devote all your nest egg to buying an income annuity but buy enough basic income to supplement your Social Security so that you can invest your remaining assets in growth investments. 

Check out the other blog posts about income annuities. Also Dr. Wade Pfau's website: https://retirementresearcher.com/