iPhone, iPad… and I Bonds? No, not Apple bonds; rather the inflation-linked savings bonds from US Treasury. You may be familiar with treasury bills, bonds, or EE bonds from Treasury Direct, but inflation-linked bonds – called I Bonds – are also offered. The real coupon rate has been very low, often 0%, over the past 10 years but the latest bond has a real coupon of 0.50%, the highest since November 2008. Adding CPI inflation to this 0.50% makes for attractive, safe security.
The 2019 Medicare Part B premiums have been set. There is a small increase of 1.1% or $1.50/month for the standard premium up to $135.50/month. Those with a higher income that are impacted by income related adjustments (IRMAA) have the same % increase but will see a slightly higher dollar increase. The one major change is a new income tier for the highest earners. Those retirees making more than $500,000 individual / $750,000 joint are subject to a new IRMAA tier and will see a $31.80/month increase. But for the majority, you will actually see most of that 2.8% COLA adjustment hitting y
Last month I posted the 2019 Social Security inflation adjustment estimate of 2.8% based on 2 of the 3 months' CPI data available at that time. This morning the final CPI-W data point was released and the final inflation adjustment for benefits is 2.8%, the highest since 2012. Unlike last year when most of the increase went to pay for catch-up Medicare premiums for many (due to hold-harmless clause), most of this increase will actually be seen in the net benefit hitting bank accounts. The 2019 base Medicare premiums will be announced later this fall. For the average SS benefit of $1,413/
The fall season brings us changing leaves, harvest, football - and the inflation adjustment for Social Security benefits and maximum salary subject to Social Security payroll taxes. The final CPI-W data point will be released October 11th but with 2 of the 3 data points known, an early estimate can be calculated. Retirees will be happy to learn the approximate increase for benefits will be around 2.8%, the highest since 2012. Unlike last year when most of the increase went to pay for catch-up Medicare premiums for many (due to the hold-harmless clause), this increase will actually be seen
It is hard to believe but soon there will be “back to school specials”. One critical supply many college students need is student loans. This year's fashion includes a higher interest rate. Like most products linked to interest rates, the rate is up from the previous year. The rate charged depends on the type of loan but for most students using the Federal Direct Loan program, the rate will be 5.05% for undergraduates and 6.60% for graduate students, which is 0.60% higher than last year. Students and parents using the PLUS program will pay 7.60%. This blog post will provide a brief over
Every year the Social Security and Medicare Trustees released a report updating the financial health of the Trust Funds. These programs provide a very important financial base for retirees. The primary source of funding is the payroll tax (FICA) of 7.65% (double if self-employed). Additional individual savings and pensions (if any) augment these social insurance benefits to make up one’s standard of living during retirement.
So how are these base social insurance programs doing financially? Not so well. Let’s take a deeper look.
For those with Home Equity Lines of Credit (HELOC) and a need for borrowing, the last nine years provided extremely low interest rates – and therefore low interest charges - on amounts borrowed. It was the flip side for savers earning close to nothing on cash savings. And unlike credit card or auto loan debt, HELOC interest charges were tax deductible for those who itemized deductions.
Two recent developments have made HELOCs less appealing, though still a solid choice to consider for borrowing needs.
Higher Interest Rates
"The hardest thing in the world to understand is the income tax.” Albert Einstein
It is that wonderful time of year when our mail and now email boxes are being filled with notices of “IMPORTANT TAX DOCUMENTS”. As much as tax time is dreaded, the earlier you start gathering your documents and preparing your taxes the better off you will be. Below are some tips to help you get organized and prepared for tax season.