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Inflation Hits Social Security & Fixed Incomes

It's predicted that older adults utilizing Social Security benefits might face escalated taxes in 2024, and thus have less disposable income. Their possible tax payment could range between 50% and 85% of their benefits if their combined income goes beyond $25,000 yearly. Why? The effects of inflation. The Social Security benefits saw a significant 8.7% increase in 2023, implemented to counter the increasing cost of living. Nonetheless, this hike may unintentionally (or intentionally) cause increased tax responsibilities for beneficiaries in the ensuing tax year.

Those who haven't previously dealt with taxes on their Social Security benefits might find themselves in the taxable bracket due to the increased benefits. To calculate their tax dues, individuals and couples filing jointly must take into account their combined income. This includes 50% of Social Security benefits and all other revenue, comprising tax-exempted interest.

These taxation regulations operate as follows:

If an individual's combined income ranges between $25,000 and $34,000, they might have 50% of their Social Security benefits taxed. If their income goes beyond $34,000, the proportion subject to tax could be as high as 85%.

Joint filers who are married could face taxation if their combined income falls within $32,000 and $44,000. If it goes above $44,000, the taxable portion could rise to 85%.

To give an example, an individual with a monthly Social Security income of $2,000 adds up to $24,000 yearly. Any additional income affects the combined income: $22,000 results in no tax, $32,000 could lead to up to a 50% tax, and $42,000 might lead to a potential 85% taxation. It is essential to remember that the rates of 50% and 85% indicate the share of Social Security income that could be taxed, rather than the actual tax amounts.

The Internal Revenue Service advises joint filers to amalgamate their incomes and Social Security benefits. Regardless of whether one spouse does not receive benefits, their income should be included in the computation.

Due to the comparatively low combined income thresholds, critiques have surfaced. In 2024, it’s estimated that roughly 40% of beneficiaries will end up paying taxes on their Social Security proceeds, as per the Social Security Administration.

Mary Johnson, a Social Security and Medicare policy analyst, predicts an increase in beneficiaries becoming subject to federal income taxes in the forthcoming tax season. A poll conducted by The Senior Citizens League discovered that 26% of participants encountered taxation on Social Security benefits for the first time in the tax year 2022.

As advisors, we recognize this dilemma and suggest that you get in touch with us to plan for less disposable income in the coming years.

TIP OF THE WEEK: Defusing the Tax Time-Bomb

Prepare and hold on tight, as we're about to plunge into the intricate domain of retirement tax planning!

Let's shed some light on the tax situation for retired individuals. It might feel like stepping into a wild terrain filled with potential hazards, but don't worry!

Effective retirement planning continually requires tax diversification, akin to your financial shield. Distributing your investments among diverse tax pots, ranging from traditional IRAs to tax-exempt accounts, is a reliable strategy. It's like maintaining a varied portfolio, but this time, it's for taxes!

The subsequent crucial step is boosting tax-effective income avenues. Our objective? Minimize tax liabilities, and enhance your cash inflow.

Now onto defusing the impending tax trap with some smart techniques. Imagine tax-favored accounts as your versatile financial toolkit. These accounts are flexible, productive, leverage your assets, and ready to combat any tax difficulties. Consider the transformation of taxable assets to tax-free assets as an ingenious strategy - converting conventional IRA funds into tax-free treasures.

Regularly review and amend your tax approach because as life evolves, your financial strategies should adapt as well.

Finally, it's worth seeking expert advice from the professionals at Novus Financial Group. Keep in mind that you're the main character of your retirement narrative – so let's collaborate together to make your story memorable!

Keep nurturing your retirement investments and aim for your taxes to be as free from the whim of Congress as possible. Here's to embarking on a financially sound retirement journey!

REAL ASSETS, Invest Like the Ultra-Wealthy 

Ready to boost your retirement plan and invest as the super-wealthy do?

Visualize this: Your twilight years, a coastal setting, and a non-alcoholic (or alcoholic) cocktail in hand. Intrigued?

The Importance of Real Assets in Retirement

Retirement – it's a phase of life where you either feel at ease or worry. Don't fret, we prefer the first option. Real assets are your portfolio's guardian angels, offering stability and a certain allure that makes stocks jealous.

Think of your portfolio as a happening social event – real assets are the attendees that everyone flocks to. They provide VIP access to a serene financial journey, without the unforeseen ups and downs.

Investing Strategies of the Super-Wealthy

Ever come across someone who purchased a mansion on a whim? This isn't a fairy-tale, it's a strategic move involving real assets. Real estate, precious metals, bourbon – these are more than investments; they're the sign of exclusivity among the affluent that now everyone has access to.

Investing in real assets is akin to preparing a long-term financial plan, saying, "I’m creating something not only for the present but for the future too." Eager to plunge into the sea of financial intelligence? Let’s dive right in!

Different Kinds of Real Assets to Look At

Precious metals? They're more than sparkling stones – they are the underrated stars in your portfolio. Bourbon? Consider it a globally sought-after commodity that’s been available since the days of George Washington.

Useful Advice for Retirement Investors

Harnessing real assets for your benefit is a skill. We can incorporate them into your portfolio without an overall revamp. It’s akin to playing jazz – a little tweak here, a little tweak there, and voila – you have your retirement masterpiece.

Taking the First Step

Translate knowledge into action. Begin with a comprehensive guide to real asset investment. The path to your retirement starts with an informed, clever move. Just email us and we’ll share our resources with you.

Incorporating Real Assets into your portfolio can help enhance your chances of a plentiful retirement. Working with advisors of Novus Financial Group provides you exclusive access to these unique investments.

Do you need help determining where to put your retirement assets to protect them from the current economic mess? Are you worried about having to work another decade to recover from your losses in your 401k or IRAs? Over the past 2-3 years, government spending has caused retirement accounts to go down 25% and pension plans have lost over $3 trillion in 2023 alone.

Ask us how to Rollover Your IRA or 401k To A GOLD IRA or a BOURBON IRA and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how Novus Financial Group can help you on your journey to a happy, fulfilling life in retirement. 

We have a lot of great information, as well as podcasts from our radio show ‘The Financial Insider’, and tools on our website - www.novusfg.com.

[email protected] www.novusfg.com [email protected]

Office: 614-943-2265

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The content we provide here isn’t financial advice and cannot be taken as such. Please speak to one of our financial advisors before making any investment decision. Also, note that every investment comes with its own risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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