Educational

Whole Life Insurance Advantages And Disadvantages

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Like any other financial product, whole life has advantages and disadvantages, along with some unique features. It provides permanent coverage, guaranteed premiums that don’t increase, has guaranteed cash values, a guaranteed death benefit, and offers possible dividends.  However, it is typically more expensive than most other policies, and the cash value growth may be more limited than other permanent policies depending on the performance.

 

Whether whole life insurance is worth it depends on your life situation and goals. If you want protection that lasts your entire life, then a whole life policy from a reputable provider can be an option to consider for your needs. It can also be worthwhile for older people concerned about estate planning strategies and reducing the effects of taxes on their heirs.

 

It is important to find a financial professional who will take the time to learn about your unique situation, listen to your concerns, and clearly explain the different insurance options that best fit your needs and your budget.

 

Whole life insurance, by definition, offers coverage for your entire lifetime so long as you continue to pay premiums. It is sometimes referred to as “guaranteed whole life insurance”, because insurers promise to keep the premiums constant over the life of the policy. Should you die, and the policy hasn’t lapsed, the beneficiaries will receive a payout.

In addition, whole life insurance offers tax benefits and has a cash value component which grows over time.  It’s suitable for those who want not only the benefits of life insurance coverage, but who also plan to use the cash value as an investment vehicle.

 

What is the downside of whole life insurance?

Compared to a term life policy, a whole life policy is more expensive and complex, in part because it’s designed to provide a death benefit that lasts a lifetime. On the other hand, a whole life insurance policy can be a powerful and highly customized asset that provides tax advantages, financial protection, and numerous guarantees and benefits. It can complement your 401k or other savings, but it’s not suitable for everyone – before buying, you need to understand how it works and what it can do, then work with a knowledgeable insurance broker or agent to ensure you get the right policy for your needs.

Why do people choose whole life insurance?

Whole life insurance builds cash value, provides permanent coverage, and can help build your family’s wealth over the long term. These policies also offer more guarantees than other types of coverage, making them an option for many people to consider.

 

Services That Most Seniors Need

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Home Care for Seniors

Aging is both a natural and inevitable part of life. The golden years are a time people should embrace. It is also important to recognize the changes and limitations that are part of the aging process. While maintaining a sense of independence is a priority for many aging adults, it is also important to address trouble areas that are easy to overlook.

For many people, keeping a sense of empowerment and positivity is important in the aging process. However, knowing where help is needed is a good strategy for staying safe and stronger for even longer! So, what services do seniors need most? Here are a few to consider.

Cleaning and Home Maintenance

Living in a safe, clean, and organized environment is vital for aging seniors. Cleaning tasks may not be as easy to complete as they once were.
Many seniors who opt to age in place will need to incorporate house cleaning services into their lifestyle. Having professionals take care of a monthly deep clean and weekly dust-over can make a huge difference in eliminating the risk of falls and slips while cleaning.
It is also important to consider home maintenance standards. Activities like mowing the lawn, shoveling snow, or changing light bulbs might not be possible for a senior at a certain point. Having professionals or family members on hand to handle those tasks keeps a residence safe while reducing the risk of injury to a loved one.

Mobility and Assistance

Mobility assistance often sits at the top of the list. Whether it’s help moving around during an errand outside or within their residence, keeping seniors safe begins with making mobility issues a priority.

Changes to a home may be necessary to make independent mobility more accessible and less risky. Renovating certain areas of the home may be necessary . A good place to start is widening doorways for wheelchairs, adding ramps, and making sure showers have handrails. Walk-in showers are easier for seniors to access than stepping up and over into a tub.
As mobility issues become more of a concern, increasing the hours a caretaker spends at home may be necessary. Similarly, it may indicate that it’s time to upgrade home enhancements to include chair lifts or even hospital beds.

Personal Care

Just as they did when they were younger, senior citizens have to attend to personal care needs. That might include assistance with everything from grooming and bathing to dressing for the day ahead.
In many cases, a family member or home health professional will be needed. Covering the daily basics is important for health standards and overall quality of life for seniors.

Transportation Assistance

At some point seniors may have to give up their driving. Cognitive or physical changes can make driving difficult and unsafe.
It’s important to have options in place for seniors so they can get where they need to go when they are no longer able to drive themselves. You may need to consider hiring a dedicated caretaker who can get your elderly family member or loved one to necessary medical appointments if family isn’t available. If they are involved in a senior citizen community or a member of a local church, many have volunteers to assist with driving seniors to needed appointments.

Monitoring Medication

Sometimes, increased medication use is part of the aging process, as the body requires more support to remain healthy and strong.
Many seniors will require assistance to keep track of daily medication requirements. They also may need help scheduling and keeping track of doctor appointments and follow-ups.
Family members may be able to help with medication tracking but home health care professionals may be an option as well.

Healthy Nutrition

Healthy nutrition is an integral part of a seniors well being. The need for nutritious meals doesn’t change for seniors, but the ability to keep up with cooking typically does.
Having family members willing to prepare meals for seniors aging in place is a good strategy. If the process becomes too consuming there are many meal delivery services that are regularly available to ensure seniors enjoy regular and nutritious meals every day of the week.

Respect and Dignity

It is important for caregivers to understand this next phase in life that the elderly are experiencing. They also need someone to listen to their needs without passing judgment or giving them advice. They also need a little time for themselves, to process this journey of aging.

Understanding Retirement Distribution: Making sure your retirement funds go to you

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“As much as 70 percent of your hard-earned retirement funds can be eaten up by income, estate and state taxes,” says IRA guru Ed Slott, author of the retirement-planning books “Fund Your Future: A Tax-Smart Savings Plan in Your 20s and 30s” and “The Retirement Savings Time Bomb … and How to Defuse

If you think saving for retirement is complicated, try figuring out how to withdraw retirement funds while minimizing taxes.

That’s money that most people would prefer to keep in their own pockets. But how exactly can it be achieved?

Follow the Rules for RMD’s

RMD stands for required minimum distribution, and once you hit age 72, you’ll have to start taking this minimum amount of money from many retirement accounts, such as a traditional IRA or 401(k) plans.
You must take RMDs annually by April 1 of the year after you turn 72 and by Dec. 31 in subsequent years. In other words, if you turn 72 in 2022, you have until April 1, 2023, to take your first RMD.
The penalty for not following the rules is severe. Failure to make on-time RMDs triggers a whopping 50 percent excise tax.

That’s true if you underpay, too. Let’s say your RMD for the year is $20,000 but you take only a $5,000 distribution because of a miscalculation. The IRS will levy the 50 percent penalty — in this case $7,500, or half of the $15,000 you failed to withdraw.
When you calculate your RMD, be aware that it will change from year to year. That’s because it’s determined by your age, life expectancy (the longer it is, the less you have to take out) and account balance, which will be the fair market value of the assets in your accounts on Dec. 31 the year before you take a distribution.

Gardening for Senior Citizens

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It’s common for aging loved ones to feel overwhelmed by new senior living environments, and the benefits of gardening for mental health are outstanding.

Maintaining a garden, or even caring for a single plant, gives them control in an unfamiliar situation. Nurturing plants also helps maintain existing skills that provide pleasure and confidence at a time when memory loss or physical decline can affect people’s self-esteem, says the Alzheimer’s Society’s garden guide.

Gardening may also decrease loneliness, according to healthcare workers that assist the elderly. Researchers found a significant drop in loneliness among adults in their 80s who participated in an eight-week indoor gardening program compared with their peers who did not garden.

Reduces the Risk of Dementia

Most seniors tend to suffer dementia, and gardening can address this challenge as well. Since gardening is a physical activity involving cognitive functions, it helps keep the mind active. Studies indicate that daily gardening can lower the risk of dementia by up to 36%, making it great natural therapy for seniors.

Critically thinking about what to plant and how to take care of plants when preparing a garden is paramount, and that can also reduce the risk of Alzheimer’s among seniors. Driving can also become a challenge for seniors, but regular gardening will help them maintain their motor skills, while improving strength and endurance too.

Relieves Stress

Sometimes, seniors become anxious about various things, which can be quite stressful. They often experience restlessness or hopeless when they have to depend on someone else. But gardening can give them their own outlet and responsibility.

Gardening allows seniors to take care of something, which helps them cultivate a sense of self-worth. This activity can also increase serotonin levels to boost your mood reduce feelings of depression. Thanks to these benefits, “horticulture therapy” is gaining popularity today.

Lowering stress levels can also reduce the risk of high blood pressure, and that explains Additionally, seniors who engage in gardening activities lower their level of cortisol, the “stress hormone,” since the soil itself appears to contain bacteria that unlock serotonin to elevate their mood

Meal prep tips for seniors that will make cooking easier

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While there is no one tip that will work for everyone, there are a few ideas you can incorporate into your week that will help make cooking easier on you and your older loved one.

  • Make a plan and write it down. Sit down on a Sunday and plan out your loved one’s meals for the entire week. This will help you avoid making several trips to the grocery store during a busy work week. Write down the menu for the week and put it in a place where your loved one can easily access it. Knowing ahead of time what is planned will make it less overwhelming for seniors whether they are the ones cooking or not.
  • Make meal prep a group project. Enlist your loved one’s help in prepping for the week’s meals. Not only will you get assistance (and company), but they’ll feel more invested in what they are eating and will enjoy having a weekly project to look forward to.
  • Prep versatile ingredients for the week. Meal prep is supposed to make your life easier, not more difficult. Instead of trying to prep each meal individually, start by prepping certain foods that make more than one appearance in the week’s meal plan. For instance, cook enough quinoa for the week or wash and chop vegetables and put them in tightly sealed containers in the refrigerator. This will ensure that no one is starting from zero when they begin cooking the meal.

Healthy and easy meals for seniors

From breakfast to dinner (and snacks in between), these are great meals for seniors that pack a seriously nutritious punch.

Breakfast

Good  sources of protein are important with every meal, but especially with breakfast, as seniors are just beginning their day. While a frequent component of a balanced breakfast, nuts and seeds can be difficult for some seniors to digest, so Karr suggests looking to avocados as a substitute.

“Good sources of protein are important with every meal, but especially with breakfast.”

  • Warm oatmeal and berries. Place frozen or fresh berries in a crockpot at a low heat setting. Add a pat of butter and one serving of old-fashioned oats and water. Cover and cook on low for several hours (or overnight). This will give it the consistency of bread pudding. (The easier option is adding berries to warm oatmeal.)
  • A hard-boiled egg. Accompany with a side of fresh fruit and a slice of whole wheat toast.
  • Whole grain pancakes or waffles. If you can find one, choose a brand that contains chia seed, which Karr says is more stable than flaxseed and contains essential fatty acids and proteins. Then top with fresh berries. For protein, also eat a handful of walnuts or almonds.
  • Yogurt parfait. Mix together yogurt, nuts and fruit. It’s a good combo of healthy fat, Vitamin C and carbohydrates.
  • Power toast. For healthy fat and some protein, spread peanut butter or almond butter on whole wheat toast. Enjoy fresh fruit on the side.
  • Poached egg. Place egg on top of whole wheat toast and steamed asparagus. Top with a small amount of butter.

Lunch

Lunch is the ideal meal for loading up on colorful vegetables. Feel free to add leafy greens to any of these meals for additional midday nutrients. Lunch should be the most substantial meal of your loved one’s day and suggests steaming or sautéing all vegetables for easy chewing.

  1. Quinoa salad. Sauté pre-chopped stir-fry vegetables (onion, red pepper, mushrooms). Combine with pine nuts or pecans and cooked quinoa. Toss with Italian salad dressing. Eat fresh, warm or cold. Keeps well refrigerated. Steam or sauté vegetables in olive oil instead of boiling, which drains the nutrients.
  2. Eggs and red potatoes. Melt a pat of butter in a skillet. Chop up potatoes and add to skillet over a medium heat. Cover skillet for two minutes. Then, pour scrambled eggs over potatoes, add pepper and toss until eggs are hot. Rather than season with salt, which can lead to water retention and high blood pressure, use fresh herbs and spices.
  3. Cottage fries. Slice parboiled red potatoes. Heat extra virgin olive oil in a skillet and cook the potatoes at a medium heat. Top with leftover vegetables and grated sharp cheddar cheese. Cover, let steam and serve.
  4. Southwest omelet. Beat two eggs. Put 1 tablespoon olive oil in a skillet. Pour in the egg mixture, and add pepper jack cheese chunks and natural salsa or chili sauce. When eggs are firm, fold and serve with sliced avocado. Tip: Chili and spices help boost diminished taste buds.
  5. Salmon wrap. Place canned Alaskan boneless skinless salmon on a whole grain wrap. Add chopped avocado, tomatoes, greens and plain yogurt. Wrap tightly, cut in half and serve.

Dinner

“Research is supporting lower calorie plans with intermittent fasting and high fat for seniors,” as this approach helps support brain function and reduce inflammation.

 

Tax breaks When You are 50 Years Old or Older

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For people over the age of 50, reaching this milestone has one advantage that is often overlooked. It is a tax incentive plan that suits you. Now you can put more into your retirement plans than when you were younger. For example, Roth or a traditional personal annuity account (IRA), will allow you to invest more. Also, your Health Savings Account (HSA) or your employer-provided plan would be on this list as well. And you can exclude other income from your tax calculation. Congress has included some of these provisions in the Economic Growth and Tax Relief Settlement Act. This act came into effect in 2002. The reason it passed congress was because of concerns that the baby boomers were not saving enough for retirement.

Congress has added other tax-saving provisions, such as larger standard deductions as well. For example, the 2017 Tax Reduction and Employment Act will allow you to catch up on savings. If you’re behind on your retirement saving, this plan allows you to add money to it. In addition, if you’re nearing or in retirement, the tax legislation permits you to pay somewhat lower taxes. You should not pass up this opportunity to enhance your retirement dollars.

Increase Your Retirement Savings Contributions

Employees who contribute to 401(k), 403(b), most 457 savings plans, and Thrift Savings Plans can now contribute more. The amount per year is up to $20,500 in 2022, from $19,500 in 2021. Employees over the age of 50 can earn an extra $6,500, bringing their total to $27,000. How do you earn extra? Both Traditional and Roth IRA contribution limits remain at $6,000 each. The catch-up payment is $1,000, which is the same as in 2021. A Savings Incentive Match Scheme for Employees (SIMPLE) plan costs $3,000 to participate in. Many people are squandering this chance, despite the fact that there are extensive catch-up provisions for individuals 55 and older. Only 15% of those people who are eligible use these great savings plans.

Boston College Center for Retirement Research’s National Retirement Risk Index, states that half of the retirees will lose their current lifestyle. Half of all American households will be unable to maintain their present quality of life once they retire. As of June 2020, half of all married and 70% of single retirees relied on Social Security benefits. Their benefits made up half of their income in retirement. The average monthly Social Security retirement payout for 2022 is anticipated to be $1,657.

Your Tax Burden Might be Reduced by Retirement Contributions

Contributing to a tax-deferred retirement plan, such as an IRA or 401(k) lowers your yearly income. It not only makes your retirement more pleasant but also lowers your income yearly taxes. Increased contributions won’t take as big a bite out of your income as you would expect. This is thanks to the tax cut. For example, if you have a 25% tax rate, and contribute to your 401K, your taxes go down. For instance, if you make $5000 a year, and contribute 5% to your 401(k), $144 would be sent to your 401(k). However, just $108 will be deducted from your biweekly income. Traditional IRA contributions are tax-deductible as long as you adhere to IRS guidelines, which include income restrictions.

MAGI Deduction Explained

Another tax qualifier is Modified Adjusted Gross Income (MAGI) in the simplest terms is your Adjusted Gross Income (AGI) plus a few items — like exempt or excluded income and certain deductions. The IRS uses your MAGI to determine your eligibility for certain deductions, credits, and retirement plans. MAGI can vary depending on the tax benefit. For example, for single and married couples, the adjustment changes. If you (or your spouse) aren’t protected by a workplace retirement plan, your IRA contributions are completely deductible. Based on MAGI, retirement plans, and yearly income determine your deductions. If you make more than $78,000, IRA deductions for individuals insured by a workplace retirement plan are no longer available. For married couples filing jointly, the deduction is no longer available after MAGI reaches $109,000.

Contributions to a Roth IRA or Roth 401(k) are made after-tax, which means you don’t get a tax advantage upfront. However, when you withdraw the funds, they are tax-free. Traditional IRAs and 401(k) s grow tax-free. Except when you start withdrawing money in retirement, you’ll have to pay taxes.

Contributing Additional Funds

Because contributing an extra $6,500 to a 401(k) may be difficult for some, Nicole Gopoian Wirick, has a suggestion. As a certified financial planner (CFP) of Prosperity Wealth Strategies, she encourages her clients to save catch-up money. To catch up, automatic payment to 401(k) is set up for each month, divided evenly over each paycheck. She claims that contributing $250 over 26 pay periods may appear more feasible to people. Clark Randall, a CFP at Financial Enlightenment advises his customers to reassess their budgets. This helps to boost their monthly retirement payments throughout the year. These 401(k) payments are budgeted in the same way as any other.

Discipline and compromise are required. If you still want to catch up with your traditional IRA or Roth IRA payments, you have time. The deadline is April 15th, unless you request an extension. However, most investment plans are by calendar year, so you should invest by the end of the year.

You can Start Your RMDs at 72

A required minimum distribution (RMD) is a specific amount of money a retiree must withdraw from a tax-deferred account. The RMD is a yearly amount that must be withdrawn each year after age 72. While the owner is still living, Roth IRAs do not demand distributions. Consider giving the RMD to a charity if you don’t need it. You won’t have to pay income tax on your RMD if given to a charity. You must give it straight from your retirement account to an eligible charity for up to $100,000.

Keep Your HSA in Mind

If your company provides a health savings account (HSA), take advantage of it. Even if you don’t itemize, the IRS permits you to deduct contributions to your retirement account. The contributions must come from your gross income, and employer contributions are also exempt. There is no tax on any earnings. Taxpayers will not be taxed on their distributions if they use them for eligible medical costs. These costs include everything from ambulance trips to X-rays. You can even take the account with you to new employment and spend the money in retirement. You can contribute up to $3,650 if you have individual coverage. And up to $7,300 if you have family coverage in 2022. If you turn 55 during the year, you will be eligible for a $1,000 bonus. However, any money given by your company that is not included in your income reduces your contribution limit.

When You Reach the Age of 65, You Earn a Larger Standard Deduction

With age, the standard deduction improves, lowering your taxable income. Married couples will receive a standard deduction of $25,100 in 2022. This deduction is an increase of $300 from the 2020 tax year. The standard deduction for single and married persons filing separately has increased by $150 to $12,550. If you are 65 or older and a single taxpayer in 2021 and 2022, you will receive an additional deduction. This deduction will be $1,700 (single) or $1750 (married) standard deduction.

File jointly if you’re married. If only one individual is 65 or older, the additional standard deduction is $1,350 for the year. The standard deduction rises by $2,700 if both spouses are 65 or older. The additional deduction is doubled for taxpayers who are both 65 and blind. The larger standard deduction has only one disadvantage for some taxpayers: it raises the threshold for itemizing deductions.

If your deductions aren’t greater than the standard deduction, itemizing doesn’t make sense. Regardless, a deduction is a deduction, and earning a higher standard deduction is a reason to rejoice. Bonus: If you’re 65 or older with a simple return, the new simplified Form 1040-SR for seniors is available. There are spaces to input items like Social Security income and retirement payouts. In addition, there’s a useful chart that illustrates basic deductions for people who still do their taxes on paper. Take advantage of your charitable deduction before it expires.

Itemization vs. Deductions

Many people can no longer itemize their deductions because the standard deduction is so large. Itemizing makes little sense if the standard deduction gives you more bang for your buck. However, for 2021, a person filing a single return can deduct $300 in cash gifts to qualifying charities. The cost of filing jointly is $600. This deduction is available if you use the standard deduction rather than itemizing. You might want to wipe your eyes when making this deduction: It will be phased out in the future.

Mistakes People Make When Planning for Retirement

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When it comes to retirement planning, it’s all too easy to make incorrect financial decisions. According to a recent study, 37% of workers feel they are on pace to save for retirement. However, neither the 44 percent who believe their funds aren’t on track nor the 19 percent who aren’t sure that they are doing the right thing set out to fail. Therefore, you must be realistic about your future aspirations and prepare early.  Then by planning ahead of time, you may avoid the following mistakes and safeguard your retirement.

Avoid These 10 Financial Mistakes as You Begin (or Continue) Your Path to Retirement.

1. Leaving Your Current Job

The average worker will change jobs approximately a dozen times during their career. Many do so without understanding they are foregoing money in the form of 401(k) contributions, profit-sharing, or stock options from their employers. It all comes down to vesting, which means you don’t own the cash or shares that your company “matches” until you’ve worked for a certain amount of time (often five years). Don’t depart without first checking your vesting condition, especially if the deadline is approaching. Consider if the job move is worth leaving those dollars on the table.

2. When Should You Retire And When Should You Start Receiving Social Security Benefits?

Do you intend to retire at 65 or continue working? There isn’t necessarily a right or wrong answer because everyone’s situation is different. There are several social security misconceptions that in reality can damage ones future financial stability. A successful program is prioritizing saving and cutting back on costs. Throughout your working life, most experts recommend putting aside 10% to 15% of your overall income for retirement savings.

3. 401(k)

If your employer offers a 401(k), make the most of it. Contributions are made before taxes, which means they lower your taxable income in the year they are made. Additionally, the interest and gains grow tax-free until you withdraw money in retirement, at which point you’ll have to pay income taxes on the amount you have withdrawn.

4. IRAs

If your company doesn’t provide a 401(k), open a regular or Roth IRA, but keep in mind that you’ll need to save more because you won’t be getting any matching money. Presently, you can make a total contribution of $6,000 to a regular or Roth IRA. Individuals over the age of 50 can make a $1,000 catch-up payment, bringing their total annual contribution to $7,000. These amounts can change, and one should check with the IRS each year to stay on track.

5. Lack of a Financial Plan

Create a plan that analyses your estimated lifetime, desired retirement age, retirement location, general health, and the lifestyle you want before choosing how much to save. This will help you avoid undermining your retirement and running out of money. Your plan should be updated frequently as your requirements and lifestyle change. To verify that your plan makes sense for you, seek the assistance of a licensed financial adviser.

6. Not Using the Full Potential of a Company Match

If your workplace provides a 401(k), enroll and contribute as much as possible to take advantage of the full employer match. Typically, the match is a proportion of your pay. For example, if you donate 6% of your income, your company may match 3% of your investment.

7. Investing Unwisely

Make wise investing selections, whether it’s in a workplace retirement plan or a regular, Roth, or self-directed IRA. A self-directed IRA is preferred by some people because it provides them with additional investing alternatives. That’s not a terrible idea, as long as you don’t put your funds in danger by following “hot suggestions” from untrustworthy sources, such as betting everything on Bitcoin or other high-risk investments. For the most part, self-directed investment entails a steep learning curve and the guidance of a trustworthy financial advisor.
Another poor investment decision is paying excessive fees for actively managed mutual funds that perform poorly. And don’t do it unless you’re ready to fully direct your self-directed IRA, which means making sure your investment decisions remain sound. Low-fee exchange-traded funds (ETFs) or index mutual funds are preferable solutions for most consumers. Your 401(k) plan sponsor is obligated to provide you with an annual disclosure that details costs and how they affect your return. Make certain you read it.

8. Cashing out Savings

If you withdraw all or part of your retirement fund before reaching the age of 59, your plan sponsor will deduct 20% for fines and taxes. You will not get the whole amount. Because most individuals never catch up and repay that amount, you will forfeit future revenues.

9. Not Planning for Health Costs

According to research, a retired couple turning 65 in 2021 will require around $300,000 in after-tax savings to pay health-care costs during retirement. By maintaining a healthy lifestyle, you can hopefully reduce that number. Keep in mind that Medicare does not cover all of your medical expenses in retirement. Prepare to pay the difference — out of pocket — if you don’t have additional insurance.

10. Early Social Security Benefits

Your payout will be larger the longer you wait to file for Social Security (up to age 70). You can file as early as 62, but full retirement is only available at the age of 66 or 67, depending on your birth year. It’s advisable to wait until you’re 70 years old to file for benefits so you can get the most out of them. The only time this doesn’t make sense is when you’re sick. Another factor to consider is spousal benefits. It may be better to register at full retirement age so that your spouse may file and get benefits under your account as well.

In Conclusion

You’ve probably made errors along the road, no matter where you are on the retirement spectrum. If you don’t have enough money saved, start saving today. Take on a part-time job to supplement your income and contribute to your retirement account. Any increase or bonus should be put into your investing fund. In addition to avoiding the aforementioned pitfalls, get counsel from a reputable financial advisor to help you remain on track—or get back on track.

Can People Over 65 Get an Earned Income Federal Tax Credit?

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In March each year, people begin thinking that Tax Day is just around the corner and its time to file a return. If you’re 65 or older and have a low-to-moderate income, you could be eligible for the Earned Income Tax Credit (EITC). This tax credit can help you pay your bills and decrease your tax bill. Depending on your earnings you may be eligible for the EITC. For example, if you earn up to $27,380 per year without children you qualify. Or if you earn $57,414 per year while caring for children, you qualify. So, tax payers meeting the qualifications should verify their eligibility and by doing so might save more than $1,500?

Many eligible people lose out on the EITC tax credit because they do not file their taxes. They do not file taxes because their income falls below the level that requires them to file taxes. But they still pay taxes because they are withheld and deserve to receive the credit in the form of a refund, according to the IRS. Others are under the impression that getting the EITC may affect their eligibility for other government benefits. This is not the case. For example, most refunds earned through the EITC are not considered income. Government benefit programs not impacted by EITC are Medicaid, Supplemental Security Income (SSI), and Supplemental Nutritional Assistance Program (SNAP.) Also included on the list are Section 8 housing and other programs with maximum income restrictions.

What is the EITC?

The Earned Income Tax Credit (EITC) was established in 1975. It was created to operate as an anti-poverty program, assisting millions of American families each year. Changes to the American Rescue Plan (ARP) will help even more Americans. This change, which includes the EITC, will make more individuals eligible for significant new tax advantages this year. For the first time, the maximum credit for taxpayers has roughly tripled. And it now applies to both younger and older taxpayers. The Earned Income Tax Credit is a valuable benefit that only a small percentage of the population who qualify. And most people who qualify do not know about the credit. Every year, at least 20 percent of eligible workers miss out on this benefit.

The Earned Income Tax Credit Helps those in Poverty

The EITC is a work subsidy that motivates people to work and helps them get out of poverty. When it comes to getting out of poverty, refundable tax credits like the federal EITC are second only to Social Security. The credit motivates people to work since the benefit grows in proportion to the wages for low-wage workers. A single worker with one child receives a $34 credit for every additional $100 earned. This credit is up to a maximum of $10,370. After that, the credit-level plateaus, then progressively declines to zero. A single worker between 25- and 64-years-old with no children will receive around $8 for every $100. The max benefit is $6,920, with no benefits after earning $15,570.

I’m Not Sure if I’m Eligible for the Earned Income Tax Credit

Before you find out if you qualify for the next tax year, keep in mind that this is a tax credit, not a loan. Also, social security and pension payments aren’t considered income for this credit. To be eligible for the Earned Income Tax Credit, or EITC, you must meet the following criteria:

  • Have you ever worked for a yearly salary of less than $57,414?
  • In the previous tax year, your investment income must be less than $10,000.
  • You must have a valid Social Security number
  • You must be a U.S. citizen or a resident immigrant for at least 12 full months.
  • Do not submit Form 2555.
  • You must have filed your tax return for the previous year.

The amount of EITC credit is based on several qualifying conditions. For example, if you have children, dependents, are disabled, or fulfill other conditions, this can affect the amount you qualify for. If you’re unclear if you qualify, review the Internal Revenue Service (IRS) website or call them. The IRS has created an EITC Assistant, which is a tool that evaluates your eligibility. You’ll need the following items to use the EITC Assistant:

  • Income statements such as W-2s, 1099s.
  • Documents proving that taxes were withheld or that money was paid to you.
  • Any out-of-pocket costs or income adjustments.

VITA sites can be found in a variety of places in your community. Some sites are at neighborhood centers, libraries, schools, and retail malls. To find a VITA facility near you, use the VITA Locator Tool on the internet or call 800-906-9887. GetYourRefund.org, a nonprofit program created by Code for America, can help you learn how to apply for the EITC. It includes free tools and IRS-certified volunteers who can assist you if this is your first-time filing taxes. Also, if you need assistance filling out the form to claim your EITC credit, they can help.

When I Claim the Earned Income Tax Credit, will My Refund be Delayed?

Yes, your refund will be delayed. The IRS warns that claiming the EITC might cause a delay in your tax refund. Regrettably, if you file your return very early, the IRS is unable to release EITC refunds before the middle of February. This is because of a legal requirement. Do the following if you want to make sure you get your refund before March 1st:

  • File your return online.
  • Select direct deposit as your method of receiving your refund.
  • Make sure your tax return is free of errors before submitting it to the IRS.

When submitting your tax return, prevent making typical mistakes, according to the IRS. If you want to check on the status of your return, go to the IRS’ Where’s My Refund website. The website is the best place to go, but you may also use the IRS2Go smartphone app.

What do Medicare Prescription Drug Plans Cover?

Posted on by jameswabw

Everyone on Medicare must choose whether they want drug coverage or not.  Even if you don’t use any prescription drugs, you should consider acquiring Medicare drug coverage to help cut your drug expenses now and safeguard against future needs and prescription drug rising costs. If you’re new to Medicare but already have other drug coverage, you have some new alternatives to think about. If you’re not new to Medicare, take a look at your choices to see if you can select drug coverage that better fits your needs.

Two Prerequisites to Obtain Medicare Prescription Drug Coverage

In order to qualify for prescription drug coverage, you must be enrolled in a Medicare program.  The original Medicare program offered by the U.S. Government has Parts A and B.  Inpatient hospital stays, skilled nursing facility care, hospice care, and certain home health care are all covered in Part A of the Medicare Program. Part B of Medicare provides some doctor’s services, outpatient treatment, medical supplies, and preventive services. It does not cover medicine.

The Medicare Prescription Drug Plan?

Everybody with Medicare can obtain prescription drug insurance coverage. If you don’t join a Medicare Prescription Drug Plan (Part D) when you first become eligible and don’t have any creditable prescription drug coverage or Extra Help, you can still apply for this coverage at a later date, but Medicare will charge a late enrollment penalty.

Two Options for Obtaining Drug Coverage

  • A Medicare Prescription Drug Plan.
  • A Medicare Advantage Plan (Part C), such as an HMO or PPO, or another Medicare health plan that provides coverage for prescription drugs.

To acquire Medicare prescription coverage, you must enroll in the original Medicare-approved plan or an approved plan offered by an insurance company or another private firm. The price and drugs covered by each plan may vary.

Do I Need a Medicare Drug Plan?

Before turning 65, you should look into your health care insurance to fully learn about its medical and drug coverage and costs as it may influence your choice to enroll in the Medicare drug coverage plan. Some forms of insurance provide prescription drug coverage that resembles Medicare and maybe worth keeping rather than enrolling in a Medicare drug plan. The following are some examples:

  • Federal Employee Health Benefits (FEHB) programs
  • Veterans’ Benefits
  • TRICARE

The above insurance policies are known as “creditable.” If you decide to join up for a Medicare drug plan in the future, you can keep them and avoid incurring a Medicare penalty.  If you don’t join when you’re initially eligible, Medicare may impose a penalty on your monthly payment. Many health plans supplied by employers and unions may also qualify as being creditable.

How is Medicare Coverage Organized?

If you decide you need Medicare drug coverage, it’s important to understand how the prescription drug portion of the program works into the wider scheme. Medicare is a government health-insurance program for adults 65 and above, as well as younger people with certain impairments and those with end-stage renal illness (kidney failure). Medicare divides into sections that provide different kinds of coverage that are categorized as Parts:

  • A – Includes inpatient hospital stays, skilled nursing facility care, hospice care, and certain home healthcare.
  • B – Includes some doctor’s services, outpatient treatment, medical supplies, and screenings and immunizations, among other things.
  • C – Medicare Advantage covers Parts A and B, as well as Part D. HMOs and PPOs, for example, are private health insurance firms that provide these plans.
  • D – The prescription drug coverage add-on to Medicare.

How do I Obtain Coverage?

Medicare enrollees can obtain prescription drug coverage in two ways:

  • Original Medicare (Parts A, B, or both) and special plans like Medicare Cost Plans, Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans can all contain prescription drug coverage. Part D, usually known as a prescription drug plan or PDP, covers you if you go this route.
  • It’s available as part of a Medicare Advantage Plan or another Medicare plan that includes prescription drug coverage (also known as an MA-PD). During open enrollment, you can move from a Medicare Advantage Plan that does not provide prescription drug coverage to one that does.

What will my Plan Cover?

Prescription drugs picked up at the pharmacy are covered by your Medicare prescription drug coverage plan. For example, it won’t cover drugs given to you by a doctor during a hospital stay or in an outpatient hospital environment.  It also excludes over-the-counter medicines like ibuprofen and Sudafed. However, it will cover certain drugs like insulin.

The Cost of Drugs Covered by Medicare

The cost of a Medicare prescription drug coverage includes a variety of factors including:

  • The premiums and cost-sharing that come with your plan.
  • The extent of your insurance.
  • The pharmacy that you go to.
  • Whether you reach the coverage gap, often known as the “donut hole.”
  • Whether or not you choose Medicare’s Extra Help program.

Let’s take a look at each one separately.

Cost-sharing and premiums

The majority of plans will demand that you pay a portion of your prescription drug costs (known as cost-sharing). Deductibles, coinsurance, and copays are all examples of cost-sharing. You will pay premiums as well. These expenses will differ depending on the plan.

  • A deductible pertains to an amount you pay for prescription drugs before your insurance kicks in (not all plans have deductibles).
  • After you’ve reached your deductible, you’ll pay coinsurance — a portion of prescription drug costs.
  • After you’ve reached your deductible, you’ll have to pay a copay for drugs.
  • The insured pays a monthly premium for prescription drug insurance.

Consider how much you can afford to spend for each prescription, as well as the overall expenses and coverage when picking a prescription drug plan. A plan’s premiums or deductibles may be costlier, but after you’ve reached the deductible, it usually provides enough coverage. The projected monthly Part D premiums by income are included in a table on the Medicare website. You must pay a monthly adjustment in addition to your premium if your income exceeds a particular threshold.

Covered Medications

When you look at plans, make sure that the ones you consider have a formulary that contains the prescriptions you use. A formulary is a list of drugs covered by a Medicare prescription plan. When your medicine isn’t on the formulary, you should ask your doctor if a similar drug is on the list or if they can assist you to acquire a coverage exemption. Medication is also divided into levels in certain plans. In general, the higher the tier, the greater the cost of the drug. Examine your prescriptions to see where they fall.

A generic drug, as opposed to a brand-name medication, normally costs less and provides greater coverage. Finally, check to see whether your plan imposes any limitations on your prescription coverage, such as prior approvals, step treatment, or quantity limits. These limits don’t always imply you won’t be able to acquire coverage for the medication. However, it may make acquiring insurance more difficult.

Extra Help

You should also think about whether you qualify for Medicare’s Extra Help program. Medicare will help cover your drug expenses, premiums, deductibles, and coinsurance if you fulfill the program’s eligibility and income conditions.

In Conclusion

For those considering the original Medicare Health Program or the Medicare Advantage Plans, you should investigate the different choices before applying for Medicare coverage. Depending on your circumstances, other creditable healthcare insurance choices may provide a better fit.

Easiest Ways to Get Fit After 50

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Easiest Ways to Get Fit After 50

We all have be taught that a healthy lifestyle should be pursued throughout one’s life. However, it’s especially crucial after the age of 50. It’s all about developing healthy habits and maintaining them for years. For example, regular exercise and a balanced diet are very beneficial when it comes to aging well. If you’re not sure where to begin, consider these seven fitness practices for people over 50.

Do not skip routine screenings

Routine screenings are the first piece of advice for people who wish to keep fit. Get a yearly physical once a year. It’s a healthy habit to adopt. Even though you’re feeling good, do not skip your yearly checkup. Yearly tests and exams by your doctor can detect a health concern. Also, it can help identify and eliminate the problem before it becomes a costly and incurable health condition.

Routine screenings are critical, especially for people over 50 years of age. For example, no one wants to talk about colonoscopies, yet they are highly recommended for adults over 50. Or if you have a family history of colon issues, you may want to have it before you turn 50. Periodic screenings are critical if we want to age well and remain healthy.

Raise your heart rate

Another recommendation, increasing your heart rate, to keep healthy beyond 50. The national requirements are 150 minutes of exercise each week. This may seem like a lot, but it only takes 2.5 hours a week. Daily, it equates to 22 minutes of aerobic exercise. You got this! Anything that raises your heart rate a little higher than normal will qualify. Try walking, jogging, yard work, or cleaning the house for exercise. Aerobic activity encompasses a wide range of exercises. A decent rule of thumb to raise your heart rate above 100 beats per minute continues to be movement and exercise. On the other hand, excessive aerobic activity may not be healthy.

Resistance Training

It’s critical to look after the muscles that shift weight as we become older. Skeletal muscles are required to pick objects up and they become stronger as we exercise them. Resistance exercise is extremely beneficial for anyone over the age of 50. Again, the right amount remains the key to success. Excessive weightlifting can be harmful, just as it can be with aerobic activity. It has the potential to produce a great deal of stress on the central nervous system. It’s important to get the correct amount. Bodyweight, dumbbells, kettlebells, and barbells are all options. Shifting your weight to combat gravity will work, with simple movements. Whenever starting a new workout plan, talk to your doctor. If you suffer any pain when exercising, you should stop and assess the situation. You may need to change your routine until your muscles grow stronger.

Drink more water

Increasing your water intake will benefit your health as well. As a result, drinking more water will really help. We often mistakenly believe we are hungry when we are truly thirsty. Keep a cup alongside you and fill it with water. Have faith in your own body. Everyone should drink water throughout the day. Water hydrates the body, and water makes up 70 percent of our bodies, much like the Earth. Talk to your doctor to see what amount of water you should drink a day.

Consume enough micronutrients

Micronutrients are the next consideration. Micronutrients are the tiniest nutrients on the planet. Not the macronutrients, such as fats, carbs, and proteins. But the micronutrients, for example, zinc, vitamin D, and magnesium, that human bodies require. These are extremely essential for a variety of functions in the human body.
Zinc contributes a major role to our immune system. Animal and plant foods contain zinc. Magnesium helps many processes in the human body. Foot soaks help to absorb magnesium through your skin. Consider vitamin D as well. Vitamin D supplements are proven to help muscle, bone health, and immune function. Sufficient sun exposure can also help to boost vitamin D levels. These are the three most essential micronutrients, although there are others. If you have any concerns regarding medication interactions, talk to your doctor right away.

Increase your protein and anti-inflammatory fat consumption

Increasing protein and anti-inflammatory fat consumption for people over 50 will help maintain a healthy and fit body. The term “protein” originates from the Greek word “proteinos,” which means “principal.” When you consider your body, you’ll notice that it’s mostly made up of proteins. It’s all about the muscles and the skin. First, we could eat less food if we consume more protein. Second, we may restore those skin cells, joint cells, and muscles, or we can even create new cells.
Anti-inflammatory lipids are also important for a healthy heart. We’re talking about Omega-3 fatty acids that are found in green leafy vegetables, hemp, and walnuts. There are various nuts, but walnuts and cold-water fish are excellent choices. Salmon and halibut are the best fish to eat for a healthy heart.

Reduce your intake of carbs and inflammatory fats

Carbohydrates and inflammatory fats, on the other hand, are two macronutrients to consider reducing. Inflammatory lipids, such as Omega 6 fatty acids, are now being linked to inflammation in a growing body of studies. Foods that are high in omega-6 fats include processed snacks, fast foods, cakes, fatty meats, and cured meats. The increase of Omega 6 fatty acids can induce blood clots, which can lead to heart attacks and strokes. They have the potential to promote water retention and high blood pressure. We should avoid both of these conditions. Reducing our intake of inflammatory lipids, such as Omega-6 fatty acids, may assist us in this endeavor. Carbohydrates will help mood and sleep for adults. When there are fewer carbs in your diet, athletic performance should increase. Unfortunately, many of us probably consume far too many carbohydrates throughout the day. Insulin issues may arise because of this. We create more insulin to get the sugar out of the blood when we eat more carbs. Insulin resistance and hyperinsulinemia are both possible outcomes of having too much insulin. Obesity follows insulin resistance and hyperinsulinemia.

In conclusion, maintaining low insulin levels throughout our lives, according to current studies, will help us live healthier. Staying in shape after 50 does take consistent exercise and knowledge to get the most out of ones life..