Are you planning for your future?

Posted by random olio

Have you thought about where you might want to retire? I have not. Maybe it is my age, but I still feel like I have too much to experience in life before I know what I want to do in my retirement. However, whether I know where I want to retire or not, I am going to do all I can to plan for how I will support myself in retirement. The place will eventually be clear to us. In the meantime, we are doing what we can to put ourselves in the right financial place for retirement.

I have strong opinions about setting up a plan for saving for our future. I will tell you why. Just like you might eat well, or exercise so you can be around for many years to come for your children, you have to do the same with your financial future. When my parents passed on, they had not a single penny put away for retirement. I do not blame them. They had to use whatever income they did have to make sure we had food on the table. My mom often worked a few jobs to make that happen. They did not have the luxury to even think about their retirement, and yet when they passed on in their fifties they had not a penny to their name. I have no idea what they would have done if they had lived. Would I, or my siblings be taking care of them?

Life is different now. It used to be that folks would have a pension and Social Security. These days I am not sure that Social Security will be around when I am in retirement. Because of that possibility, Chris and I believe we have to do our own part to ensure we have the funds available to retire. If Social Security is around then it will just be icing on the cake. Yet, according to Fidelity Investments, “41% of couples surveyed in 2011 do handle retirement decisions together—which leaves about one in six couples who don’t.” It is an interesting article, definitely worth reading further.

Yet, I am a bit shocked. 41% is not enough. I am grateful for the 41% of couples that are talking, but what about the other 59%? And, of the 41% that are talking, are they saving, or just talking? How many of you are taking care of your future? Have you begun saving for retirement? It is not an exciting topic, but an important one to ensure that we can continue to live, retire, and enjoy our future.

Random Olio Snippets: 1

Posted by random olio

I am trying something new. Once a week (on no specific day of the week) I want to share snippets of a few “random olios” or ideas from my week. Often I have random thoughts I want to share, but they are short and so in 2013 I have decided to share small snippets together in one post each week. We’ll see!

More books for me! – Thank you to a work colleague, I just found out that I can check out books from libraries in another county. She made my day. Call me a dork, but it gives me the ability to find books that never make it to my county library locations. For those of you in the Portland area, there is the Metropolitan Interlibrary Exchange (MIX) and they have a reciprocal borrowing agreement with libraries in neighboring counties (I can explain more if anyone has questions). If you are not in Portland, maybe you have a similar consortium in your town or local area.

Facebook Graph Search – Not sure what I think about this yet. It is a beta version, and I have not signed up for this feature. 2012 was the year that I put myself out there in the online community, and this online world is starting to feel limitless. In some ways, as online search capabilities grow, so does the potential of someone’s community to grow. Yet, I wonder if there is point where it all goes to far? There is connection and community, and there is TMI. Too much information exposed to the whole world. I have at times wanted to find something on my own page on Facebook and not been able to find it, but separate from that, what do we really need to search and know more about our Facebook friends? I would love to hear different opinions on this topic!

Social Security – Starting February 15, $61 billion in Social Security benefits are due, but the federal government might only be able to cover 60% of that. Yikes. Yet, CNN Money was the only place I found that was talking about this massive oversight? Why are other news outlets not talking about this? This should be front and center. It would be important to me if I was in the age range to collect benefits. This does continue to remind me that while I am paying into Social Security, I should not expect it to be there for me when I retire. Food for thought.

IRAs – we can now contribute $5500 a year (up $500 from 2012), $6500 for those over 50 years old, into IRAs for 2013.

All random I know, but hey, that is why this blog is called Random Olio – you never know what will inspire, bring me to tears, or piss me off!

Less money in your paycheck?

Posted by random olio

Unless you make buttloads of cash, you might have been scratching your head and wondering why your paycheck was considerably smaller this week. I am not complaining, as it is what it is. Politics aside we could be in a worse situation where we are out of even more money. Let’s face it, our country is in major debt and that is not going away anytime soon.

In case you do not know the specifics, the Social Security payroll tax rate is currently 12.4%. Employers pay 6.2%, and for the past two years employees have paid a reduced rate of 4.2%. With the recent fiscal cliff changes, that reduction will now go back to the normal 6.2% which means that employees will now pay 2% more Social Security tax (as we did in 2010). This is also true for those who are self-employed (if you make more than $433). According to Kiplinger: “Originally a one-year break, the holiday was extended at the last minute to cover 2012. Extending it again to cover 2013 would have cost about $100 billion…”

As an example: if you make $50,000 a year, you will now take home $1000 less a year, or about $38 a paycheck (about $80 less a month). If you are a dual income family, the amount is much higher of what will be lost in your take home pay.

A question: If I am paying more tax now in 2013, does that mean I will have a higher refund in 2014 due to paying more taxes now? The answer: Yes. Depending on your allowances. Since I am not the expert, here is Kiplinger’s answer: “By eliminating overwithholding of income tax, the average taxpayer who normally gets a refund can both defeat the paycheck-shrinking impact of higher payroll taxes and add a couple thousand dollars to 2013 take-home pay. (Yes, you’ll be giving up a fat refund in 2014, but wouldn’t you rather get your money when you earn it?)” Complete answer, full article, and their calculators.

What I find odd is that the Social Security website has not been updated with the 2013 rates and details. Kind of sad considering my company was able to make changes in their system to ensure that the Federal government received the extra 2% out of the first paychecks of the 2013 calendar year. Yet, the government still has not updated their website about the changes. Seriously?

Another interesting fact I found: “…many workers do not know that any annual wages above $106,800 are not taxed by Social Security. In other words, a worker who makes twice the Social Security wage cap – $213,600 per year – pays Social Security tax on only half of his or her earnings, and one who makes just over a million dollars per year pays the tax on only about a tenth.”

In case you are wondering: These are the 13 tax changes going into effect in 2013.