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Six Common Social Security Questions

Six Common Social Security Questions

While the majority of Americans will collect Social Security at some point in their lives, not everyone fully understands the program. This program, which is often a vital part of a person’s retirement plan, is notorious for being confusing. Taking the time to gain a deeper understanding of Social Security can help you maximize your benefits and avoid benefit reductions. 

Whether you’re looking to claim your benefits in the near future, or you’re years away from retirement, it’s in your best interest to gain a fundamental understanding of Social Security.

While the majority of Americans will collect Social Security at some point in their lives, not everyone fully understands the program. This program, which is often a vital part of a person’s retirement plan, is notorious for being confusing. Taking the time to gain a deeper understanding of Social Security can help you maximize your benefits and avoid benefit reductions. 

Whether you’re looking to claim your benefits in the near future, or you’re years away from retirement, it’s in your best interest to gain a fundamental understanding of Social Security.

1. What is it?

Social Security is a program created in 1935 to provide retirement income to Americans. It’s still used today by most Americans once they reach a certain age. Some use it in conjunction with other retirement income sources and some use it as their only income stream.  

Currently, the system works like this: every time you receive a paycheck for working, a portion of the taxes you pay go towards Social Security. This money is then reallocated back to Americans who are collecting their benefits.

2. How are benefits determined?

Not everyone receives the same benefits. Your benefits are determined by how many credits you earn during your working years. Essentially, the more you make the more credits you receive. As of 2020, a credit is defined by $1,410 in income, and you need to earn 40 credits to qualify for benefits. 

Once you qualify, the Social Security Administration (SSA) uses a formula to determine your benefits. They look at your highest 35 years of average earnings. This is then used to determine your Average Indexed Monthly Earning (AIME). Once you have your AIME, you can apply it to the Social Security benefits formula. 

3. When should I claim?

When you claim your Social Security benefits is completely up to you and is different for each person based on their unique financial history. If you claim at your full retirement age (FRA) you’ll get your standard benefit. Your FRA is designated by the law and is based on the year you were born. Filing even a month early could lead to early filing penalties which reduce your benefits. Waiting to claim past your FRA has advantages, too. If you wait, you earn delayed retirement credits every month until you turn 70—leading to a bigger check from Social Security.

4. Does working affect benefits?

Many retirees choose to pick up a part-time job after they’ve claimed their benefits. If you’ve reached full retirement age, you can work without affecting your Social Security benefits. However, if you’re under FRA and receiving your benefits, you could forgo a portion of your benefits (temporarily) if you’re earning too much. In this case, once you do reach FRA, your monthly check will be recalculated to account for the lost benefits.

5. How do spousal benefits work?

As with any aspect of Social Security, spousal benefits are a bit confusing and come with many stipulations. If you’re unfamiliar with spousal benefits, they work like this: current spouses and ex-spouses (who were married for over 10 years and are not remarried) are eligible to receive equal to half of what their spouse earns if it’s higher than their own.

In certain cases, when someone dies, their Social Security benefits may be available to their current or former spouse. You can also collect spousal benefits without a death occurring. In order to qualify for spousal benefits, the spouse with a work record must already be receiving their benefits and the other spouse must be at least 62. If your spouse dies, you can collect a survivor’s benefit as early as age 60.

6. Do I owe taxes on Social Security benefits?

You may owe taxes on your Social Security benefits based on your income. If it’s above a certain threshold, you could be taxed on up to 50% of your benefits. 

If you’re a single filer, this threshold is $25,000 to $34,000 of countable income per year. If you make more than that as a single filer you could owe even more in taxes (up to 85% of your benefits). If you file jointly, this income threshold is $32,000 to $44,000. As with single filers, if you make more than that in countable income you’ll be taxed even higher. 

Again, with any aspect of Social Security, tax rules for benefits are complicated and conditional.

When to claim, deciding to work after claiming, tapping into spousal benefits and understanding how your benefits will be taxed are all extremely important if you’d like to get the most out of Social Security.

Keep in mind that we’ve provided surface level answers to these common Social Security questions. Having a professional dive deep into each of these questions while keeping your unique situation and financial history in mind is the key to maximizing your benefits. SimplyAdvised can put you in contact with a knowledgeable professional who can help.

Five Retirement Planning Mistakes to Avoid

Five Retirement Planning Mistakes to Avoid

Many of us spend years looking forward to and planning for retirement. It’s only natural to want to enjoy the fruits of your labor and spend your golden years stress-free. That’s why it’s important to avoid making mistakes that could throw a wrench in your plans. A secure retirement comes from meticulous planning and not leaving anything up to chance. 

Steering clear of these five mistakes can help you accomplish your long-term financial goals.

1. Not having a plan.

Not having a clear plan for your retirement is a huge mistake. Without a plan in place, your odds of having a stress-free retirement, or even one at all, is slim. Every person’s situation and goals are different, which is why you’ll want to calculate how much you’ll need and figure out how to get there. It seems counterintuitive to list something so basic, but nevertheless it’s true. Not planning at all is putting a nail in the coffin of your retirement. It’s not only important to create a plan, but to update it regularly to reflect your wants, needs and any lifestyle changes. 

2. Not utilizing tax-advantaged accounts.

Another mistake to avoid is not making the most of tax-advantaged accounts you may have access to, such as a 401(k), Roth IRA or a traditional IRA. All of these accounts are great vehicles to grow your retirement income over time. 

A 401(k) is a retirement option provided by your employer. With a 401(k), a specified amount of money is deposited into your account from each paycheck. The money is from your income before taxes are taken out. These plans can vary vastly depending on your employer. Some companies offer a matching program, which can be very beneficial. 

An IRA, which stands for Individual Retirement Account, allows you to save money outside of any options offered by an employer. A Roth IRA puts dollars that have been taxed into your account, they grow tax-free and you can usually take money out tax and penalty free after the age 59 ½. With a Traditional IRA, you can contribute taxed or untaxed money into the account, your money will grow tax-deferred and withdrawals are taxed.

Deciding which type of account is best for you can be confusing, and knowing the differences and benefits of each type of account is a good start. Getting professional help is a great way to determine what you should do or if you’re on the right track. Again, each person has a unique situation and they’ll require a different plan. However, not utilizing any tax-advantaged accounts to save for retirement is a huge mistake! 

3. Underestimating the length and cost of retirement.

Many aim to retire by 62-65. If you do, this means you’ll probably need your funds to last you anywhere from 20-25 years. Because of this, you’ll also want to plan for inflation. As time goes on the cost of living could rise. Not taking this into consideration could leave you without money later in life, or needing to delay retirement. 

Other aspects people tend to underestimate are costs such as healthcare and long-term care. Even if you’re enrolled in Medicare, it only covers a portion of healthcare costs. So, you may have to plan to purchase supplemental insurance or pay out of pocket. Without taking these costs into consideration, you could blow through your retirement savings.

4. Cashing out your 401(k) savings.

Most people have more than one job throughout their lifetime. This means they may be contributing to more than one 401(k) throughout the years. It’s common to cash out this account as you’re leaving a job, however, you may not want to. If you withdraw money from them too early you can be hit with harsh penalties—not to mention the taxes you’ll pay on the income. So, if/when you change a job where you’ve been contributing to a 401(k), you’ll want to be aware of all your options.

5. Not taking care of your health.

Because healthcare can be so costly, it’s imperative that you protect your health now. This means exercising, resting, keeping stress levels low and eating a nutritious diet. Also, getting check ups regularly can help you prevent disease or catch problems early. 

Taking these steps can allow you to work longer, enjoy your life and help prevent you from having to pay for long-term care early. Another benefit of being healthy is the potential to secure more affordable rates for coverage such as life insurance, disability and long-term care.

It’s never too late to start, rethink or change your retirement plan. Not only avoiding the mistakes above, but leaning on advice from a trust and vetted financial professional can help immensely. The thought of figuring out how to set up a successful financial future post-retirement can be overwhelming. SimplyAdvised can match you with a local professional to make the process as easy as possible. 

Five Ways to Minimize Your Taxes In Retirement

Five Ways to Minimize Your Taxes In Retirement

While many choose different paths for their retirement, there is one thing that stays constant: taxes. No, taxes don’t stop once you’re retired. They’re probably even more important to keep an eye on during retirement as you’re on a fixed income—meaning you don’t want to pay the IRS any more than need be.  Let’s start with the basics—what’s taxable and what isn’t? The short answer is basically everything. This includes work income, regular investments, IRAs and 401(k)s.  When you’re planning for retirement it’s important to understand exactly what and how things are taxed. Whether you’re just starting the planning process or already retired, there are things you can do to lower your taxes and keep more of your hard-earned money. 

1. Have a variety of retirement accounts.

By having a diverse pool of retirement accounts, you can use them to balance your withdrawals in a tax-friendly way. If you have a mix of taxable and non-taxable accounts, you can pull from your non-taxable accounts when your income is high and draw from the taxable accounts when it’s lower. Basically, you want to draw money from your sources in a way that cuts your taxes in the best way possible.

2. Minimize taxes on Social Security.

Depending on your income, your Social Security benefits can be taxed. If you’re single and your income is less than $25,000, or if you’re married and your income is less than $32,000, your benefits aren’t taxable. If you make more than this amount, you can be taxed on up to 85% of your benefits.  You can avoid this by either not working, only working enough to make less than the amounts listed above or by delaying your benefits for as long as possible. 

3. Plan for estate taxes.

Estate planning can be complicated, but avoiding it can result in a nightmare for your loved ones. It’s important to have a plan in place that’s mindful of estate tax—it can be as high as 40%. Considering this, structuring your estate plan in a way that reduces the amount of potential taxes your estate will owe is crucial. Proper planning can keep your assets in the hands of your heirs and not tax collectors. 

4. Pay off your mortgage before retiring.

A great way to minimize your expenses and therefore taxes, is to pay off your mortgage before retiring. A mortgage payment is often a person’s largest monthly expense. By eliminating this expense, you’ll reduce how much income you’ll need to achieve within a tax year. It will also allow you to have more flexibility in retirement as it’s difficult to minimize your taxes when you need to withdraw a large amount of money each month to pay your mortgage. However, we know that for some this is no easy feat. Another option is to try and get your mortgage payment down as much as possible.  

5. Choose where you live wisely. 

Some retirees decide to relocate for various reasons—wanting to be closer to family or friends, wanting better weather or perhaps for a change of pace/scenery. Whatever the reason is, it’s important to be smart when choosing this location as it can affect your taxes. Some states have lower income levies combined with fair rates for sales and property taxes, while others don’t impose income taxes at all! While taxes shouldn’t be an end-all be-all reason for moving somewhere, they’re worth taking into consideration.

While these are just a few options, there are a plethora of ways you can get your taxes in check during retirement. Keeping your taxes low means you’ll have the ability to spend your retirement income exactly how you’ve always wanted to. Consulting a professional to really drill down into your unique situation is extremely worthwhile if you’re not well versed in the world of taxes. SimplyAdvised can help you find a local, knowledgeable and trusted financial expert to guide you through the tax minimization process.

Four Questions to Ask Yourself Before You Retire

Four Questions to Ask Yourself Before You Retire

If you’re nearing retirement, you may find yourself daydreaming about enjoying the fruits of your labor. While it’s important to plan for retirement at any stage of life, if you’re getting close it’s crucial to be realistic about how prepared you really are. One way to take inventory of what you have and haven’t accomplished is to ask yourself a few questions.

1. How much money do I have saved and is it enough?

Without knowing how much money you have saved and determining if it’s enough for your plans in retirement, you can’t be sure that you’re ready. 

With any retirement plan, different people will have different sources of income. Some have multiple 401(k)s, some have a variety of IRAs and/or investments and some people may have a pension plan. Whatever the case is, you’ll want to check on these accounts to get an idea of what you’re working with. You may be pleasantly surprised, or you may be concerned. Either way, it sets up a realistic expectation of what you’ll need to do while moving forward. 

It’s also important to think about what your income source(s) will be during your retirement. You may be banking on a pension, tax-advantaged retirement accounts or expecting help from Social Security. Some retirees also choose to stay busy and start a business, buy real-estate or generate income through other ventures. Making the right decisions now and diversifying your income sources can help contribute to a stress-free retirement. 

2. Have I made an estate plan?

Ensuring there’s a plan in place for easy management of your assets after death or incapacitation should be included in your retirement planning. Without an estate plan, your financial affairs could be left in shambles and headed to probate court—a headache for your heirs. 

Check out these five estate planning documents you may want to have in place before you retire. 

3. What is my plan for healthcare?

Let’s face it—as you get older you’re most likely going to need healthcare. While you’re planning for your retirement, you should be planning for your medical needs and how you’re going to fund them. Healthcare isn’t cheap, and it may even become more expensive. However, healthcare costs don’t have to wipe out your retirement savings if planned for properly.

Many use a Health Savings Account (HSA) to secure funds for healthcare in retirement. Any money you contribute to this account is tax-deductible—and if used for healthcare costs your funds will grow tax-free. Another option is Medicare. Once you turn 65, you’ll want to carefully review and consider all your options. 

At the end of the day, the most important thing to do is to not underestimate these costs. 

4. What will my Social Security benefits look like?

Social Security is another source of income for retirees. However not everyone’s benefits will look the same. There are many stipulations that affect how much you’ll receive. These include:

  • What age you claim your benefits at.
  • The amount of time you worked and contributed to Social Security.
  • How much money you made during those years.
  • Your marital status.

Unfortunately, this program is somewhat confusing and not well-understood by the public. By doing a bit of research and/or getting professional help, you can maximize your Social Security benefits. Getting the most out of Social Security means having an additional monthly income stream to fund your retirement.

While there are many things to consider before taking the leap into retirement, honestly answering these questions can help you create a long-lasting and enjoyable retirement. Knowing where you stand, where you want to be and figuring out how you will get there can be complicated. SimplyAdvised can match you with a vetted and knowledgeable professional to analyze your situation and put you in the best position possible.

Five Key Estate Planning Documents

Five Key Estate Planning Documents

Many consider having an estate plan a necessity only if you’re extremely wealthy or have a considerable amount of assets. However, believing this myth and not planning ahead could leave your family and financial affairs in shambles. It’s never too early to consider how you’d like your assets to be handled if something happens to you.

Another myth people tend to believe is that estate planning only encompasses having a will or trust, which is not the case. Having a comprehensive plan ensures easier management of your affairs when you’re no longer around. It may not be the most pleasant thing to think about, but doing so can bring you and your family a huge sense of relief. 

While there are many documents you can use to indicate your wants after death or incapacitation, below are five key documents you may want to consider having.

1. Will

There are two types of wills: a living will and a last will. While they sound very similar, they actually serve two very different purposes. 

Living Will

A living will covers exactly what you’d want to happen in case you’re rendered seriously ill, incapacitated or unable to speak for yourself. This legal document communicates what you’d like to occur medically, such as your preference on being on life support and other life-sustaining measures. This is extremely important to have in order for your family and any medical personnel to act according to your wishes. 

Last Will

A last will goes into action after you’ve passed away. A well planned last will very specifically assign who gets what, how much and when. This is extremely important to have in place to minimize any controversy or disagreements amongst your family. It can also name who you’d want to be your children’s guardian in case of death before they reach adulthood. 

If you die without a will, you essentially will have no say in how your assets are distributed. As one could imagine, this can cause strife between family members. Without a will, your estate will go through the probate process. This means the distribution of your assets will be decided by the court—often being a long and tiresome process.

2. Trust

Trusts are another option for the passing on of your estate. A trust is an agreement between you and another entity, either a person or institution, to distribute your assets to your beneficiaries as you see fit. You can design trusts to be arranged in many ways and control who gets access to what, for how long and when from beyond the grave. 

Creating a trust can protect your estate from your heirs’ creditors or inability to properly manage money. Trusts also often avoid going to probate court, which is desirable for a few reasons:

  • Your beneficiaries can receive your assets in a more timely fashion.
  • It’s more private as court records are public knowledge.
  • There are no court fees to pay. 

While there are many types of trusts, there are two main distinctions: revocable or irrevocable.

Revocable Trust

These types of trusts allow you to stay in control of your assets during your lifetime. Once it’s been created, you as the grantor can make any provisions you want, as well dissolve it at any time. While a revocable trust can stay out of probate, it’s subject to estate taxes. 

Irrevocable Trust

An irrevocable trust is more concrete and less flexible as once it’s created, you as the grantor cannot change it. Any assets included in the irrevocable trust are essentially transferred out of your control and can’t be dissolved once it’s established. The major plus to an irrevocable trust is that the assets included are usually not subject to estate taxes as they’re not technically a part of your estate.

3. Power of Attorney

This legal document grants someone the authority to make decisions for you when you’re incapacitated or no longer around. In order for the document to be valid, it must be created when you’re mentally competent. Anything that’s not clearly listed in other estate planning documents will be decided by your Power of Attorney. This is why it’s important to choose someone you trust and update throughout your life if anything changes.

4. Beneficiary Designations

There are some possessions, such as IRAs, 401(k)s, life insurance policies and annuities, that are considered non-probate assets. Once you pass away, these assets are given to the designated beneficiary. A beneficiary designation overrules any distributions laid out in a will, which is why it’s extremely important that these are up-to-date and align with your wishes.

5. Letter of Intent

A letter of intent is not technically a legal document, but it still has great value. This letter outlines any specific requests, instructions or crucial information for your family and friends. This could be usernames and passwords for important online accounts, funeral preferences, instructions for the care of pets, messages you’d like to leave for loved ones and more. 

It’s important to note that every estate plan is going to be different, as every person has different wants, needs and financial situations. Making sure your estate plan is not only established, but cohesive and continually updated is essential to easy management once you’re gone. Having a financial or legal professional guide you through the many options to ensure your affairs are in order could be invaluable to your family and friends. SimplyAdvised can help you find the right estate planning professional to answer your questions and help you create the perfect estate plan.

Estate Planning – Canada

Estate Planning – Canada


Estate Planning – Canada Seminars

Worrying about your legacy and how it will affect your loved ones is only natural, and having an estate plan in place that both considers your individual goals and is designed to maintain family harmony is essential. Without the proper planning, you could leave your assets completely vulnerable to unintended consequences. By creating a strategic plan, you can set yourself up to leave a legacy that reflects your goals, beliefs and values.

estate planning canada

You’ll Learn About:

Wealth Management

We’ll discuss preserving and enhancing the value of your estate and opportunities for tax deferral or minimization.


We dive into the basics of wills – including when you should make one and when/who should review it. Also, how to choose an executor.


We’ll cover what probate is and how you could potentially avoid it.


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