40 states with an income tax include retirement income, but not Illinois, and that's not about to change.

Most of us don’t like to pay taxes, but it’s our legal and civic obligation in a democratic society.

It’s also galling in states like Illinois, where real estate, sales and gasoline taxes are among the highest in the country, and there’s too much waste, inefficiency and dishonesty in government to feel our money is being well spent.

But the beat goes on.

Last year Cook County raised sales and hotel taxes, and the City of Chicago passed the largest properly tax in history.

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Damian J. Sylvia

Retirement Income Solutions

220 Monmouth Road

Oakhurst, NJ 07755

 

Two Philosophies of Retirement Income Planning

Within the world of retirement income planning, the siloed nature of financial services between investments and insurance leads to two opposing philosophies about how to build a retirement plan. There is an old saying that if the only tool you have is a hammer, then everything starts to look like a nail. This tendency is alive as those on the investments side tend to view an investment portfolio as a solution for any problem, while those on the insurance side tend to view insurance products as the answer for any financial question.

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Damian Sylvia 

220 Monmouth Road

Oakhurst, NJ 07755  

How much retirement income do you really need?

The common wisdom about how much income Americans need in retirement may not be so wise, according to the U.S. Government Accountability Office.

The GAO, which reviewed 59 studies and reports on retirement income and interviewed retirement services firms and financial planners as part of the study, found that recommended target income replacement rates typically ranged from 70 to 85 percent of your pay just before retirement.

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Damian Sylvia

Retirement Income Solutions

220 Monmouth Road

Oakhurst, NJ 07755

 

How to hike your guaranteed lifetime retirement income

One of the most difficult retirement planning challenges is dealing with the uncertainty of how long you might live. You just don't know whether you'll make it to age 75, 85 or 95. That's why it's smart to develop sources of retirement incomethat guarantee to pay you no matter how long you live, such as Social Security, a pension or an annuity from an insurance company.

The trouble is, many people haven't earned a significant pension from their employer, and many retirees don't buy annuities from insurance companies. That leaves you with just one option: maxing your Social Security benefits, which you can do by delaying the start of benefits. For each month you delay, your monthly retirement income rises, but that increase stops at age 70, after which you receive no additional credits for delaying your benefits.

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Damian J. Sylvia

Retirement Income Solutions

220 Monmouth Road

Oakhurst, NJ 07755

Pay Off All my Debt With My Retirement Money?

Dear Liz, My wife and I no longer work. She is 57 and I am 55. We have retirement income of about $90,000 in military and Department of Defense pensions. We have several Roth IRAs and some mutual funds. I have a 403(b) with $75,000. Is it wise to tap retirement accounts to clear off a credit card and pay my car off early to get out of debt? I owe $17,000 on it at 4.2% interest. -- Jeff

Dear Jeff, It rarely makes sense to prematurely tap a retirement account to pay off debt. It usually is much better to use savings or cash in nonretirement assets.

Withdrawals from your 403(b) retirement plan would trigger income taxes that would eat up at least a quarter of what you pulled out. While you wouldn't be subject to the 10% federal penalty because you are 55 and separated from your employer, you'd still wind up paying income taxes equal to your federal and state tax brackets. If you were in the 25% federal bracket, for example, a $20,000 withdrawal would trigger at least $5,000 in income tax (plus whatever your state charges).

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Damian Sylvia

Retirement Income Solutions