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Discussion in 'Money & Finances' started by Sheldon Scott, Oct 18, 2016.
What a paltry raise.
It may be a small increase but we do have to look on the bright side; we went for 4 or 5 years without a raise at all prior to the Trump administration. The year before all the blank years my wife got a whole $1.00 and I received $3.00 even though the cost of living was skyrocketing.
I got notification of the COLA increase for 2021 today. I was more thrilled to see that our medicare premiums are dropping from $289 a month (each) to $148.50. After the dust settled with IRA rollovers in previous years we are finally getting a break.
I just cost my SS Cola notice. IT's a whopping 1.3% increase.
My medicare premium for 2020 was $144.60 and for 2021 will be $148.50
It truly cheesed me that a single investment (IRA) rollover in 2018 cost us an additional $3468 in Medicare premiums this year. So the lessons we have learned is that we worked for a lifetime to accrue a little money, and the government has worked equally hard to take it away from us.
This would really tic me! Please explain, if you feel like it, how the IRA worked. We had no plans in place of any kind, save for the pension provided me by Sears and Dana Corp., in which they contributed a buck for each dollar I put in, up to 5% of salary, max. This provides me with $62 and $97 each, monthly, Sears & Dana, for life.
My -ex was laid off suddenly from the hair salon at the Mirage Hotel, after 20+ years service, when Steve Wynn sold out and new owners re-staffed it. She had a mortgage remaining on her home, living alone, and I advised her to pay it off with 401K proceeds (which she had, but I was also ignorant of workings). She kept the house, and receives (I guess) a pension and S/S benefits.
I have always been dubious of government instituted "savings" plans, having seen the royal screwing of Americans. Both companies strongly urged me to engage in them, but I stubbornly refused. Did I lose anything?
I certainly couldn't say whether you "lost" anything or not, Frank. Far too many variables for my little mind.
We had before-tax money invested in retirement funds and company stock, Frank. Which means that the money was invested before we paid income tax on it as earned income. The premise being that at the time the money would be withdrawn after retirement, a person would likely be in a lower income tax bracket and owe less taxes. Add to that something I was not familiar with, called an "NUA" which provides reduced taxes on "Net Unrealized Appreciation", or the difference between average cost-basis of stocks and the current market value.
So our investment counselor advised to take advantage of the NUA for income tax purposes (capital gains) at the end of 2018, which was all well and good; unfortunately the transaction had other ramifications such as the increase in our Medicare premiums for 2020. So I'm sure the entire thing is structured so that the investor doesn't ever catch a break.
I've heard of "deferred tax" plans, and the concept is sound, IF the individual having the plan in the end is destitute (unlikely, as the Feds know). Plus, during all those years of sitting accumulating "value", they can raise tax rates, not sparing the investment plans.
Social Security gave those of us on SS a VERY modest increase. How about those on different company Pensions?
No. I stays the same.
I took my pension as a lump sum and made other investments with it.
Is pension money considered income in the US ?
Yes, though it may be tax-deferred if a lump sum is rolled over into an IRA. It is then taxed on distributions.