When should you sign up for Social Security?

You are first eligible when you turn 62, but should you take it then? You will get 25% less than the amount at full retirement age which is 66 for most now looking at retirement if you do. I believe you should only take social security before age 70 if you really need the money to live on or your health is not good. If you wait until age 70, then your monthly benefit is 32% more than it would be at age 66. In other words for each year you wait after full retirement age of 66 you get another 8% increase in your monthly benefit. That is a pretty good return and it is for life. After age 70, there is no longer any increase in benefits if you wait. If you are married, then the spouse with the higher lifetime income should wait until age 70, but the other spouse could claim at full retirement age. Only 4 percent of women and 2 percent of men wait until age 70 to collect social security benefits per the Center for Retirement Research at Boston College.

Medicare

When you turn 65 you are faced with the task of choosing the right medicare plan for your situation. The purpose of this blog is to give you some direction and some suggestions based on my experience. First of all medicare (parts A and B) only covers 80% of your medical costs for doctors and hospitals. You will see a lot of advertising for medicare advantage plans which will cover the 20% and also prescription drugs in many cases. An alternative is medicare supplemental which also covers the 20% but has no prescription drug coverage. Medicare supplemental is more flexible than advantage but more expensive. Supplemental may have more coverage by including the doctors you want to use. Supplemental F covers all out of pocket while supplemental G has a small deductible. I believe the best plan for most seniors is medicare supplemental G and a separate prescription drug coverage(part D). This coverage will just about duplicate the health insurance provided by large companies. The cost to you of medicare parts A, B, supplemental G, and prescription drug coverage will be about $3,333 a year.

Scams

If the IRS calls you, then you know it is not the IRS but a scam. Hang up. The IRS communicates with letters. If someone from your bank calls you and asks for a PIN code, then it is not your bank but a scam. The bank would not ever do this. Hang up. Don't ever provide your bank account information or social security number to anyone who calls you on the phone or online. Even if the caller tells you part of your account number or social security number, it is still a scam. Hang up.

S Corporation Basis

If you are a shareholder in an S corp, you have to have basis in order to deduct losses. One way to make sure you have enough basis is to lend money directly to the S corp before year end. Guaranteeing a corporate loan or having the S corp get a bank loan does not give the shareholder basis. You cannot reduce your basis below 0 so any losses that you cannot deduct are suspended.

Changes in the Divorce Tax Rules

Beginning with 2019 divorce decrees, taxpayers who pay alimony will no longer get a tax deduction and those who receive alimony will no longer have to include in taxable income. This will be a huge incentive for alimony payers to get the agreement done before the end of 2018.