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.