A vibrant senior couple smiles while shopping outdoors

The 12 Best Senior Discounts Out There

The senior years can be challenging in many ways. Financially, seniors normally have less to spend but have an increase in medical expenses. The aches and pains of being a senior citizen may not be considered a blessing, but companies that provide a discount are a blessing. There are age requirements, with some starting as early as 50. Also, some locations may not honor them, so check before you purchase. Here is a listing of the 12 best ones available for seniors.

  1. Amtrak – Travelers 65 and over can receive a 10% discount off most fares on Amtrak. Have your proof of age identification ready, and check before you book.
  2. Avis – Offers card-carrying AARP members 30% off base rates for those who are renting in the US and Canada.
  3. Bloomin Brands – This includes the restaurants of Bonefish Grill, Outback Steakhouse, and Carrabba’s Italian Grill. AARP members can receive 10% off their meal every day.
  4. British Airways – It must be booked by January 31, 2019, but if you carry an AARP membership you can get $65 off economy travel and $200 off business club travel.
  5. Grocery Stores – Publix, Kroger, Fred Harris, Piggly Wiggly, Harris Teeter, Bi-lo, Fred Myer, ShopRite, and many others are included. Almost all grocery stores have some kind of discount, 5 to 10% and a special day they offer it. These offers change from time to time. Check with your favorite store to see what the policy is that they have in place.
  6. Joann Fabric and Craft – They announce special senior discount days. They offer customers 55 and older, with a state-issued ID, 20% off. There are limitations on what is or is not included so check ahead of time so you won’t be disappointed.
  7. Kohl’s – Every Wednesday, for shoppers 60 plus, a 15% discount is given. If you are over 60 plan your shopping at Kohl’s on Wednesday.
  8. Marriott If you are 62 or older you can receive 15% or even more off your room rate. It is subject to availability, but there are not any limits to the number of nights. Please check if it is available at the Marriott you are booking. This offer is also available worldwide.
  9. Pep Boys – 10% off every day for those 55 and up.
  10. United Airlines, American Airlines, and Delta – They all offer senior rates, but for domestic flights and subject to availability. When you book online look for the “seniors” designation. If you don’t see it, even though it can be a hassle to call an airline, do call them. You could save 10% off an expensive ticket. Do not expect to just show up and get the discount. Check ahead.
  11. Uno Pizzeria and Grill – If you are 55 or older you are eligible to join their Double Nickel Club on their website. This gives you 30% off their deep dish pizza and other menu items.
  12. Walgreens – You only need to be 55 or older to receive 20% off on the first Tuesday of the month. This is for eligible purchases. Check at the store what that includes. Also, if you are an AARP member there are special discount days that will be advertised.

Sources in part are found here and here for the companies offering senior discounts.

Any discount you can get in your senior years can add to your quality of life. If you have extra debt, take the savings you receive and apply it to other areas to help your financial picture. Timberline Financial can help you to figure out a solution to balances that just don’t seem to become reduced.

The previous has been researched to give the most accurate representation. However, sometimes the terms or the discount changes, or is completely removed. What is true at some locations may not be true at another. Also, there are many other discounts and deals available to seniors. A prudent way to shop is to just ask before purchasing to make sure you don’t miss any offers available.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high-interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website https://timberlinefinancial.com.

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Key Influences Impacting Your Social Security Payout

The Social Security Administration makes an estimated 69.7 million dollars in Social Security payments each month to retirees. Recipients received an average monthly payment of $1,360 in 2017, according to the SSA, many households depend on this income for survival. For three out of five retirees, this income accounts for over half of total household income. Without these payments, the poverty rate among the elderly would drastically increase.

There are many factors that determine the amount of money you will receive each month. Given the high level of reliance on Social Security payments, understanding ways to increase the monthly payout can add thousands of dollars to your income throughout retirement. The most important factors affecting the monthly payout include the following:

The Year You Were Born

Your birth year establishes your full retirement age or FRA. The FRA ranges from 66 to 67 years of age, for those retiring today. The age matters because anyone can begin receiving benefits at the age of 62. However, filing before your full retirement age will permanently reduce the monthly payout.

Once you reach your full retirement age, you can claim 100% of your Social Security benefit. Waiting beyond the FRA will increase payouts for every month you wait until you reach the age of 70.

Everyone born before or in 1954, has a full retirement age of 66 years old. For those born after 1954, the retirement age uses the following schedule:

Table 1: Full Retirement Age
Year You Were Born Full Retirement Age
1954 or earlier 66 years old
1955 66 years and 2 months old
1956 66 years and 4 months old
1957 66 years and 6 months old
1958 66 years and 8 months old
1959 66 years and 10 months old
1960 or later 67 years old

 

The Age You Claim Benefits

Aside from the full retirement age, the age you choose to file for benefits has the highest impact on your potential payout. If you claim Social Security benefits before reaching your full retirement age, the benefit amount will decrease by up to 30%. For example, receiving your Social Security payments up to 36 months before your FRA will result in a 6.7% reduction, or 5/9th of a percent reduction for every month you claim early. The earliest you can qualify for benefits is age 62, which could give you five extra years of payments at a lower amount.

For every year you postpone filing past your full retirement age, you can receive an 8% increase until you reach 70 years old. At that point, there is no pay increase for waiting longer. The following chart shows the benefit payouts based on age, assuming full retirement is age 67.

Table 2: Age You Claim Social Security
Age You Claim Social Security Benefits Reduction or Increase Effect On a $1,500 Monthly Benefit
62 30% reduction $1,050
63 25% reduction $1,125
64 20% reduction $1,200
65 13.3% reduction $1,300
66 6.7% reduction $1,400
67 —- —-
68 8% increase $1,620
69 16% increase $1,740
70 24% increase $1,860

If you delay filing for Social Security benefits until the age of 70, you can receive up to 76% more monthly than an individual who claims their benefit at 62.

Work History

Social Security payments rely on your work history, which is determined by how much money you earned and how many years you worked. Calculating the full benefit considers your 35 highest earning years and will adjust for inflation. Those who have not worked all 35 years will have zeros calculated into the formula to determine the 35-year average. Workers who were not employed may receive half of the spouse’s benefit when reaching retirement age.

Work history can also lower your Social Security benefit if you file before reaching the full retirement age. Claiming your benefits before the full retirement age will result in a Retirement Earnings Test on income, which calculates benefits to consider current earned income while receiving benefits. When you surpass the threshold, you could lose $1 in benefits for every $2 in income above $17,040. Earning over $45,360 will result in $1 in benefits withheld for every $3 in earned income. After reaching full retirement, there are no income limits.

Total Income

The IRS can tax up to 85% of benefits based on household income. The IRS uses the adjusted gross income, or AGI, to determine taxation on Social Security benefits. This includes both passive and earned income.

In 1983 Congress included an amendment to the Social Security Program, which gave the Internal Revenue Service the ability to tax Social Security benefits. Currently, you will not pay taxes on earnings up to $25,000 per year for individuals and $32,000 for couples. Individuals who earn between $25,000 and $31,999 and joint filers earning between $32,000 and $43,999, pay taxes on up to 50% of Social Security benefits. Earning above these thresholds can result in 85% of the Social Security benefits becoming subject to taxation.

The above amounts have not been adjusted for inflation in over 34 years, resulting in over half of Social Security recipients owing taxes on their benefits.

Where You Live

In addition to paying taxes at the federal level, some states also tax Social Security benefits. Some states provide residents with low-income exemptions.

For example, Minnesota, North Dakota, Vermont, and West Virginia mirror the federal tax schedule. While Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island, and Utah tax all Social Security benefits, with limited income exemptions.

State level taxation does not directly impact your Social Security check, but it can determine how much money you get to keep.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high-interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website.

 

 

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Retirement Income Strategies

Planning for retirement involves the accumulation of assets and then spending the savings. Creating a twofold approach to retirement savings can give you a more accurate assessment of how much you will need, along with a long-term plan to address both sides of the equation.

One of the major challenges with retirement planning is the high level of uncertainty. You do not know how long you will live, how many years you will have good health, or how investments will perform.

To address these uncertainties, you can choose different withdrawal strategies. You want to employ a method that will stretch investments to last your lifetime while leaving enough money for the rising cost of care. This back-end game plan can lead your front end saving strategies.

There are four primary approaches used to steer investment decisions in retirement. They include the probability, safety-first, bucket, or weighing utility approaches.

Probability Approach

The probability approach evaluates past market performance to estimate the probability of success with a given portfolio. You choose a range of investments based on your assets and spending needs in retirement, and a computer program will review market performance, analyzes scenarios for future markets, and calculate the probability of success. You can then adjust spending levels early in retirement to reduce the probability of running out of money.

The strategy is popular among investors because it mirrors many pre-retirement investment strategies. Its strength is it alleviates the worst possible scenario. Its weakness is that it does not compensate for the fluctuation of your financial needs.

Safety First

The safety-first strategy focuses on establishing a safety net for essential expenses and then rates other costs in retirement by ranked needs. For example, a contingency fund will have a higher priority than hobbies or travel. The most recent advocate of this method is Professor Zvi Bodie author of Worry-Free Investing and Risk Less and Prosper.

The first step is to prioritize retirement goals, with the highest value given to basic needs, and a lower value given to luxuries. Then match risk characteristics to existing assets and goals. For effective implementation, you must maintain consistent spending patterns and avoid splurging on luxuries in early retirement to ensure you have enough assets to pay expenses in later years.

In most cases, you would fund your essential costs through a guaranteed income strategy such as social security, pensions, or a fixed immediate annuity, that guarantees payments for life, regardless of how long you live. An annuity can also include income for a couple, to provide enough money for you and your spouse’s lifetime, adjusted for inflation.

After meeting basic needs, you invest enough money in conservative investments to cover unexpected expenses, and then other investments earmarked for pleasure or luxury items. The safety-first strategy will not maximize annual returns or beat an investment benchmark. Instead, you chose investments based on spending needs.

The strength of the safety-first income strategy is you are less likely to run out of money because you establish guaranteed income for essential spending in retirement. The drawback is that you need more cash than other strategies because it is the most conservative of the four approaches.

Bucket Approach

The bucket approach establishes categories or buckets for retirement spending based on time. Much like you create a budget using spending categories, you set up timeframes for retirement to determine how you will invest funds in each bucket.

Harold Evensky, the financial planner who pioneered the bucket approach, focused on the basic principle that near-term living expenses should remain in cash, even with minimal yields. You can then invest assets not needed for several years, in a variety of long-term holdings, increasing gains. The cash cushion will provide peace of mind, while long-term holdings provide ongoing growth and the ability to withstand market downturns, without needing to sell investments at a loss due to income needs.

The first bucket, for immediate use, focuses on the safety of principle, rather than account growth. In some cases, returns may not keep up with inflation. To determine the amount, you need in the first bucket, analyze annual spending patterns. Subtract ongoing payments from Social Security, a pension, or an annuity, to determine the amount of deposit in cash investments.

Investments for short-term needs might include a money market for one year’s worth of living expenses, and short-term bond funds or dividend paying stocks for the remaining one to four years’ worth of expenses. You may also choose to include an emergency fund to cover any unexpected costs.

As funds deplete in the first bucket, you adjust the balances from other buckets to replace the money. The number of buckets and their investment goals will differ from person-to-person.

Longer term investments will fill the last bucket, which can withstand more market volatility because you do not need the funds in the near term. Stocks will be a major part of the long-term investment strategy, which could increase profits in the long run.

As the years in retirement progress, you can adjust spending based on the level of risk in your portfolio.

The strength of the bucket approach is the ability to capture higher returns on a significant portion of your investment portfolio in retirement, reducing the chances of running out of money, even with limited assets. The weakness is that you could incur higher costs as you move investments between buckets.

Weighing Utility

The weighing utility approach introduces satisfaction to the retirement income equation. You determine tradeoffs by weighing the value or utility of certain expenses. For example, you might need to decide whether to work an additional three years to increase your level of happiness in retirement or reduce your living costs as you age.

To calculate withdrawals, you determine the amount you need and want and put a weight on each expense. Then prioritize based on the weights. The strategy can help prioritize spending for discretionary items while ensuring you have enough to cover higher medical bills required as you age.

The strength of the weighing utility is that it considers the quality of life. The downside is that it can be hard to qualify the value of happiness.

Having an income distribution strategy in place can help you calculate the amount of money you will need in retirement. How you anticipate on living out retirement and your comfort with risk in investments will determine the best strategy for you.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high-interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website.

 

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