The founder and a managing partner of Bergen Financial Group, Darcy Bergen is a fiduciary with a Series 65 license. Experienced in risk management, income planning, and social security planning, Darcy Bergen assists people nearing retirement age with their financial planning needs.
As you prepare for retirement, you will need to consider your healthcare needs and associated costs. Those who have not yet reached Medicare eligibility don’t always realize that, currently, beneficiaries must pay a monthly premium for Medicare, which is typically deducted from your Social Security benefits payment.
In addition to premiums, many Medicare plans also have other out-of-pocket costs, such as deductibles and coinsurance amounts, as well as prescription drug co-pays. Each year, the amount you pay and the benefits you receive depend on the plan you select during the Medicare Open Enrollment period, which runs from October 15 through December 7, for plans that will be effective the following year.
Remember to review drug costs for each plan to see if any name-brand pharmaceuticals you rely on may have recently dropped in price due to recent legislation requiring certain drug manufacturers to lower costs for enrollees who fall into the drug coverage gap.
With more than two decades of experience in the financial services industry, Darcy Bergen is the founder and president of Bergen Financial Group in Peoria, Arizona. A certified retirement financial advisor, Darcy Bergen frequently shares his financial planning knowledge as the host of the live radio show Smart Money, as well as the television show The Money Doctors.
A recent development that may impact your financial planning is the Social Security Administration’s 2019 cost of living adjustment (COLA), which will increase by 2.8 percent. Many retirees may be pleased to hear that this is the largest COLA since 2012. However, it's important to keep in mind that increased earnings may lead to an increase in your income taxes depending how much you earn.
Once you pass retirement age, you can continue to work and still draw Social Security benefits.
When determining your tax rate, your income is counted as one half of your Social Security benefits plus your other earnings. If you earn a combined $44,000 or less filing jointly, you may pay taxes on 50 percent of your benefits. If you earn more than $44,000 filing jointly, the tax rate on your benefits can rise up to 85 percent. These rates can influence how much you would like to work once you reach retirement age.
For more than 20 years, Arizona-based retirement planner Darcy Bergen has been giving advice on wealth management and tax planning to his affluent clients. As a Certified Retirement Financial Advisor, Darcy Bergen helps his clients develop personalized plans for their retirement through well-timed IRA conversions and municipal bonds.
People nearing retirement often turn to low-risk opportunities such as municipal bonds to reduce their exposure to market volatility. Municipal bonds are issued by state and city governments to raise large sums of money, usually to finance infrastructure projects. Generally, bondholders are paid out interest over the term of the bond and returned the principle after the bond matures.
Unlike with corporate bonds, the interest earned on municipal bonds is exempt from federal taxes. In some circumstances, bondholders can also avoid being taxed at the state level. Municipal bonds are considered low-risk because the issuing government can leverage various taxes to repay its lenders.
These bonds typically earn lower rates of return than stocks and other financial products. Additionally, any capital gains from selling a bond are subject to taxes.
Financial planner Darcy Bergen advises clients in regard to wealth management issues. A Certified Retirement Financial Advisor, Darcy Bergen works to increase the after-tax income of his retired clients.
To reduce a retiree’s tax burden, retirement tax planning must consider how annual withdrawals, income from benefits, Social Security, and new tax laws intersect. Long-term tax planning usually starts at the beginning of the year and reviews all possible withdrawal timetables to keep clients in the lowest possible tax bracket while maintaining their preferred standard of living.
Long-term tax specialists may encourage their clients to generate investment returns from stocks rather than certificates of deposit or bonds. This is because returns from bonds and CDs are taxed at a higher rate than dividends from stocks. Additionally, any capital losses can be used to offset taxes owed on capital gains.
Short-term planning estimates the tax burden at the end of the year based on relevant tax codes. For example, clients will work with retirement planners to determine the best time to withdraw from IRA or 401(k) accounts in order to reduce the client's overall tax liability.
Darcy Bergen is the president of Bergen Financial Group. At his company, Darcy Bergen provides Americans with retirement and social security planning services.
When should you claim social security? Most people already have an age in mind. It could be 62, 65, 70, or the age at which they plan to retire. However, going about this issue in this way is not advisable. Social security benefits can be accurately calculated. Claiming too early can cost you hundreds of thousands of dollars. And that’s not all - how you claim is also important.
Legally, you can start claiming social security as soon as you reach 62, but that doesn’t mean that is the ideal age for you. Claiming later can be more advantageous. You can even increase your social security benefits by up to 75 percent with the right electives.
You have been saving all your life, so you will want to maximize your income post-retirement. It’s no longer just about having some money for upkeep in retirement, but about living your best life then.
If maximizing your benefits is what you want, consult a retirement planning professional to help you decide just when to claim social security. If you recently claimed benefits, do not be worried. You have a 12-month window from the time you applied for benefits to reverse any social security decisions you made. Consult a retirement planning professional for guidance on how best to proceed.