4 Little-Known Perks That Financially Benefit Stay-at-Home Parents
It's not easy for families to live on one income, but there are some benefits to doing so. Read on to find out a few financial perks for stay-at-home parents.
When you retire, you’ll decide whether to stay where you are or relocate. You’ll want to give this decision very careful thought because it can have a big impact on how much of your Social Security check you actually get to keep and spend.
Here’s what you need to know about how your preferred retirement home could affect your monthly benefit.
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States’ different tax rules for Social Security
There are 12 states that will tax your Social Security benefits under certain circumstances:
Colorado
Connecticut
Kansas
Minnesota
Missouri
Montana
Nebraska
New Mexico
Rhode Island
Utah
Vermont
West Virginia
If you plan to retire in one of these instead of the 38 states that don’t tax benefits, this doesn’t necessarily mean that you will necessarily lose some of your benefits to the state. But you will be at risk of that happening, depending on the state’s laws and on your income.
In the majority of cases, only higher earners are subject to Social Security benefit tax. But regulations are always in flux, and tax rules can sometimes become less favorable over time. In fact, on the federal level, a growing number of retirees are subject to taxes on Social Security benefits every year since the threshold at which benefits become taxable is not adjusted upward to keep pace with inflation.
So if you choose to live someplace where benefits are currently taxed, you stand a much greater chance that you will face an obligation to pay at some time during your retirement years.
How to decide where to live as a senior
If you want to keep as much of your Social Security benefits as possible, research a state’s tax rules before you decide to live there.
But there are a lot of different factors to consider when deciding where to live. Things like access to medical care, proximity to loved ones, and overall cost of living (along with the tax rules) affect how much retirement income you end up with.
If you do decide to live in one of the 12 states that tax benefits — perhaps because your loved ones are there — you might not be able to keep as much money from Social Security. Some additional savings to offset any taxes you owe can help cover the necessities. If you plan for that when setting retirement savings goals, you don’t need to let local Social Security tax rules prevent you from retiring where you would prefer.
The $18,984 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $18,984 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.
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