Social Security Checks Increase 2023

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social security checks

Fortunately for retirees depending on Social Security, payments on Social Security checks 2023 will be quite a bit higher than the payments on 2022 Social Security checks. New Social Security Payment Amount 2023 The 2023 Social Security payment amount hasn’t been officially released yet, but some groups are expecting a 10 percent or more increase for Social Security retirees in 2023 thanks to high inflation in 2022. Although some financial groups are expecting an even higher increase. If inflation remains the same as in June, then the COLA for Social Security would be around 9 percent. Social Security COLA Increase COLA stands for cost of living. Social Security payments are adjusted each year to keep up with inflation. For the last few years, Social Security check amounts had been relatively flat thanks to low inflation until 2022. 2022 Social Security checks were increased by a COLA of 5.9 percent. However, inflation has been even higher during the first half of 2023. The Fed has been trying to combat inflation by aggressively raising interest rates. If the Fed’s gambit works, inflation could be lower by year end. Whether that would translate through to the 2023 Social Security check calculations remains to …

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What Is an IRA?

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ira retirement account beach

What Is an IRA? An IRA is an individual retirement arrangement, but what does IRA really mean? IRA Definition An IRA is a tax-advantaged account used for retirement savings. IRAs are defined and governed by the IRS through Publication 590-A Contributions to Individual Retirement Arrangements, and Publication 590-B Distributions from Individual Retirement Arrangements. Is An IRA a Good Way to Save for Retirement Saving money in an IRA is smart. To know, “Is an IRA right for me,” depends on your financial situation and your retirement goal. An IRA is a great way to reduce taxes and to grow your money without paying taxes for years. There are actually several different types of IRAs such as Roth IRAs, SEP-IRAs and SIMPLE IRAs. The standard, or plain IRA is often referred to as a traditional IRA. What Is a Traditional IRA? A traditional IRA allows taxpayers below a certain income threshold to deduct the value of contributions made to the IRA. The money also grows tax-free inside the IRA. Overall, the funds in a traditional IRA are considered tax-deferred because you will have to pay taxes on tax-deductible contributions and tax-free growth later when you withdraw the money. How Does an …

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Fed Raises – Did It Break the Economy?

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Fed Raises - Did It Break the Economy? 1

I’m not an economist and I don’t play one on TV. I haven’t even stayed at a Holiday Inn Express, but I have been involved in finance for a long time now, and I’m old enough to have a pretty good memory. Add that to a lot of research over the years as a freelance financial writer for a lot of publications and websites, and I have an informed opinion, if not a professional one. Fed Raises Rates 0.75% Again The Fed raised interest rates again, another big 0.75% hike. So, here is the punchline. The Fed has raised interest rates a total of 1.5% in just two months. Look up the last time the Fed raised rates that quickly. Go ahead. I’ll wait. It was the 1980s and inflation was crazy rampant. Every economist older than 50 had drilled into their head that inflation was more of a problem than a recession because that is what is true for Wall Street. Unfortunately, that is not necessarily what is good for Main Street, and by extension, the markets. Last time the Fed raised rates was from 2016 to 2019. That increase was a nice gentle 2.25% increase over three years. …

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IRA Contribution Limits 2022 and 2023

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ira contribution limits for 2021 and 2020

Not all tax numbers stay the same over time. Many income limits and other tax numbers are adjusted each year, either for inflation, or by another statutory mandate. These tax numbers include the tax tables and tax brackets for each year, for example. It also includes IRA contribution limits. The IRS announces the numbers each fall. Since the numbers are adjusted based on inflation, they only increase if there is enough inflation over the course of the year to increase the IRA contribution limits by the same percentage. With some crazy inflation this year, you would expect some of the IRS numbers to be up significantly. IRA contribution limits for 2023 are higher than they were in 2022. 2022 IRA Contribution Limits The 2022 IRA contribution limits were published by the IRS in late 2021. Note that these limits are for contributions made during the 2022 tax year, for use when filing income taxes due by April 2023. IRA Max Contribution 2022 The maximum IRA contribution for 2022 is $6,000. This is the same as the maximum deduction for 2021, 2020, and 2019. The maximum IRA contribution in 2023 is $6,500, up $500 from the year before. Both the 2022 and …

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Roth 401k and Roth 457 Plans

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457 retirement

By now, many people are familiar with the basic concepts of a 401k retirement savings plan. But did you know there are different kinds of 401k plans? Do you know what a 457 plan is, or what its variation, the Roth 457 plan is? If you already have a good understanding of regular 401k plans, or traditional 401k plans, then it’s pretty easy to see the difference. If not, don’t worry, we’ll walk you through it step by step. Standard Features 401k and 457 Plans The regular parts of a 401k plan are relatively well known. An employer must start and run the 401k plan. Contributions made to the 401k plan are traditionally made with pre-tax dollars. That means that you pay no taxes on the amounts you contribute to a 401k plan. Also, no capital gains taxes or taxes on dividends are due while the money grows inside of the 401k savings plan. In exchange, you cannot withdraw money from a 401k plan prior to age 59 1/2 except in very specific circumstances without penalty. In addition, you will have to pay taxes on the money as you withdraw it from the account. And, finally, once you turn 70 1/2 …

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Are I Bonds a Good Investment Right Now?

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series i bonds investing interest

There is a lot of chatter in the financial planning community as well as the investing writers and bloggers about investing in I Bonds. Are I bonds really a good investment right now? As with almost all investing and savings ideas, the answer is that it depends on your current financial situation and what you want to get out of your I bond investment. What Are I Bonds? The one thing the finance pundits are getting right is the description of I bonds. I bonds are a savings bond from the United States government just like the more well-known Series EE savings bonds. The main difference is that I bonds are designed not as a basic savings vehicle, but rather as one that keeps up with inflation. What Is The Point of I bonds? Technically, if your savings are not keeping up with inflation you are purchasing power. This is not the same as losing money, no matter what anyone tells you. If you have $10,000 in savings earning 1%, you are not losing money. Your savings are increasing at the rate of 1% every year. However, if inflation is 2%, you are losing purchasing power. Statistically speaking, your savings …

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Amazon Flex Side Hustle Gig

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amazon flex side hustle

I’ve heard of a lot of people turning to side hustle gigs like Amazon Flex as a way to make extra money for saving, investing, financial independence, or retirement planning. Is Amazon Flex worth it to make extra money for investing or saving? That depends a lot on where you live, where the Amazon Flex gigs are, and what kind of car do you have. Quick update: Between July 3 and July 9 if you deliver just one block, Amazon Flex will pay you a $40 bonus. That changes some of the calculus about whether Amazon Flex is worth it to you, at least in the short term. Amazon Flex Pay Amazon Flex pay varies based upon factors like day of the week, time of day, and how many drivers are available. For harder to cover times, Amazon Flex pays more. The Amazon Flex base rate varies by city. Is Amazon Flex pay worth it? Yes, but only if you live close enough to where you pick up your Amazon Flex gigs. Calculate your time and mileage starting from when you leave your house and ending when you get back to your house. Now, figure out what you made with …

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Welcome to Rule 8

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rule 8 of investing

No rules about the stock market are 100% valid. In fact, a great many rules and sayings are flat out false, but there is just enough to juice in a few of them to keep, and just enough fund in a few others to keep them around. There’s the Santa Claus Rally, and Sell in May and Go Away, among others. Bob Farrell’s 10 Rules for Investing One of the rules, or set of rules, which keeps floating around due to both their perceived truth, and the fact that several of them are either obvious or broad enough to mostly always be true are Bob Farrell’s 10 Rules for Investing. Bob Farrell’s 10 Rules for Investing are time tested, even if not 100% correct. The most interesting of all Bob Farrell’s ten rules right now is number eight. Bob Farrell’s #8 Rule for Investing: Bear markets have three stages – sharp down, reflexive rebound, and a drawn-out fundamental downtrend. Depending on how you want to look at your bear market, could this be considered the reflexive rebound? It’s actually trickier than it sounds because, unlike what it might feel like, the market has not come straight down. There have been …

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Colorado Income Tax Tips

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colorado taxes

I live in Colorado. Most personal finance and achieving financial independence applies to everyone, nationwide. When it comes to taxes though, there is a great deal of variation among states. I may dig into some other states as time provides, but for now, here are some 2022 Colorado Income Tax Tips for the taxes filing in early 2023. Colorado Income Tax Rate 2022 The best part of writing about 2022 Colorado Income Tax Rates is that the state has a flat tax. In other words, everyone in Colorado pays the same tax rate regardless of how rich or poor you are. Before you get all up in arms, percentages are by their nature, progressive. That is, someone will $500,000 income paying 5% will pay more taxes ($5,000) than someone paying $100,000 ($1,000). The worst part of writing about Colorado income taxes is that unlike the drawn-out battles of doom in the U.S. Congress to change anything in the Federal income taxes, Colorado’s income taxes change all the time, sometimes automatically. Such is the case for 2023 where Colorado’s TABOR law will make the Colorado Income Tax Rate for 2022 down to 4.4% from 4.5% in 2021. In addition, Coloradoans will …

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$400 Wells Fargo Free Checking Offer

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wells fargo checking bonus

I have been in the personal finance game long enough to have seen some trends. One of those trends is the increase in free money offers, zero interest offers, and cash back offers, like the $400 Wells Fargo Free Checking offer that showed up in my mail. If you are in your 30s or 40s, you can probably remember the opposite, when credit cards were stingy with approval and even basic checking came with some sort of minimum fee. Banking and credit offers are a lagging indicator. They get good after the economy and markets get good and stay good after the rest of the market rolls over. Wells Fargo Checking $400 Bonus The Wells Fargo $400 bonus works like most cash bonus offers from other banks. There is no Wells Fargo $400 bonus scam, but you need to read all of the requirements before you leap into a new checking account. First, you have to use the special offer code when you open your new checking account with Wells Fargo. That’s the easy part. How Do I Get $400 from Wells Fargo? Then, you have to have $1,000 worth of qualifying direct deposits during the first 90 days your …

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