10 Cities Near Boston To Live in 2021

The enchanting city of Boston is a beacon of history and culture. From the Freedom Trail to the thriving Financial District, the many charms of this city attract hopeful renters from across the globe. But one look at the average rent prices in Boston may leave you searching for less expensive relocation options.

Whether you are cost-conscious or prefer to live away from the big city vibe, rest assured that there are plenty of cities near Boston where you can still enjoy the best of this world-renowned region.

Here are 10 wonderful cities near Boston with access to the metropolis and unique charms of their own.

Newton, MA. Newton, MA.

  • Distance from downtown Boston: 9.9 miles
  • One-bedroom average rent: $2,641 (down 9.6 percent since last year)
  • Two-bedroom average rent: $3,453 (down 11.8 percent since last year)

Newton is a quintessential New England town with 13 unique neighborhoods, charmingly called Newton’s “13 villages.” The communities offer something for every taste — from Chestnut Hill with its farmlands and chestnut trees to the prosperous business district of West Newton.

West Newton claims a convenient stop on the Massachusetts Bay Transportation Authority Commuter Rail, allowing Newton residents to bypass some truly awful Boston traffic and arrive in Back Bay in under 20 minutes.

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Concord, MA, one of the cities near bostonConcord, MA, one of the cities near boston

  • Distance from downtown Boston: 20 miles
  • One-bedroom average rent: $1,856 (up 5.8 percent since last year)
  • Two-bedroom average rent: $2,725 (down 0.3 percent since last year)

The city of Concord is a fascinating mix of early-American history and modern natural wonders. The Concord Museum captures the uniqueness of the town since its incorporation in 1635, including Concord’s essential role in the American Revolutionary War. Historic houses in Concord display a charming style of architecture unique to New England.

The Walden Pond State Reservation offers locals and tourists a great place to hit the trails and go for a swim at lake beaches.

Outdoor adventures in Concord pair well with an inspiring visit to Thoreau House, the site of the transcendentalist poet’s home, and the legendary Sleepy Hollow Cemetery.

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Natick, MA. Natick, MA.

  • Distance from downtown Boston: 21 miles
  • One-bedroom average rent: $2,118 (down 5.8 percent since last year)
  • Two-bedroom average rent: $2,606 (down 5.7 percent since last year)

Natick is known for its Natick Town Center, a charming downtown with historic brick buildings and a cozy atmosphere. Residents enjoy many benefits, including access to a Community Center, the Sassamon Trace Golf Course and Memorial Beach.

On the opposite side of the town exists an entirely different scene with the massive Natick Mall. This shopping center draws in both business and excitement as the largest mall in Massachusetts.

Residents have the best of both worlds, with lovely farmlands in the eastern parts of Natick and the liveliness of the commercial area to the northwest.

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Salem, MA, one of the cities near bostonSalem, MA, one of the cities near boston

  • Distance from downtown Boston: 22.2 miles
  • One-bedroom average rent: $2,444 (up 0.5 percent since last year)
  • Two-bedroom average rent: $3,049 (up 9.5 percent since last year)

Best known for being the home of the Salem Witch Trials, Salem is rich in history.

The downtown and harbor areas comprise a wide web of streets offering countless shops, restaurants and museums. For a change of theme, visitors can explore worldwide art and culture on display at the Peabody Essex Museum and the historic House of the Seven Gables.

While the height of Salem’s excitement peaks in the month-long celebrations in October, locals enjoy year-round nightlife and a vibrant party scene.

A change of pace is easy to find with the numerous seaside beaches and the expansive nature preservatory at Salem Woods.

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Framingham, MA. Framingham, MA.

  • Distance from downtown Boston: 22.7 miles
  • One-bedroom average rent: $1,876 (down 7.7 percent since last year)
  • Two-bedroom average rent: $2,357 (down 15.2 percent since last year)

Framingham is a commercial hub that acts as a midway point between Boston in the east and mini-metropolis Worcester farther to the west. In addition to its strategic location, Framingham residents enjoy in-town attractions such as the Garden in the Woods and Jack’s Abbey brewery.

Framingham has several residential neighborhoods and is a popular town for city commuters as the MBTA Framingham/Worcester Commuter Rail offers a comfortable ride to both Boston and Worcester.

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Boxborough, MA, one of the cities near bostonBoxborough, MA, one of the cities near boston

Photo source: Boxborough, MA / Facebook
  • Distance from downtown Boston: 29 miles
  • One-bedroom average rent: $1,806 (down 17.8 percent since last year)
  • Two-bedroom average rent: $1,868 (down 21.6 percent since last year)

The cozy town of Boxborough is ideal for those wishing to partake in the joys of countryside life while keeping the conveniences of the big city within distance.

Locals here enjoy charming estates, lush greenery and a close-knit community. For schooling and other purposes, this town is often combined with nearby Acton as the Acton-Boxborough area.

Nature lovers enjoy the numerous Boxborough farms selling locally-grown produce. A breath of the wild is always at hand for residents who have access to in-town parks such as Flerra Meadows and the nearby Wachusett Mountain with its hiking trails and ski slopes.

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foxboro mafoxboro ma

  • Distance from downtown Boston: 30.1 miles
  • One-bedroom average rent: $2,144 (up 0.9 percent since last year)
  • Two-bedroom average rent: $3,067 (down 5.3 percent since last year)

Written officially as “Foxborough,” locals refer to this town as “Foxboro” and the “Home of the New England Patriots.” The stunning Gillette Stadium here is the base of Massachusetts’ most beloved football team. During a game, locals across Massachusetts know to give Foxboro a wide berth as the traffic is as legendary as the team playing.

Luckily, Foxboro locals don’t have to leave town to have a great time. The expansive Patriot Place shopping plaza surrounding the stadium offers thrills such as an escape room and a themed cafe.

Fans of nature aren’t left out here — the Nature Trail and Cranberry Bog, as well as the numerous bucolic farms and scenic landscape nearby, offer much to explore.

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Bridgewater, MA, one of the cities near bostonBridgewater, MA, one of the cities near boston

  • Distance from downtown Boston: 32.3 miles
  • One-bedroom average rent: $1,878 (up 1.1 percent since last year)
  • Two-bedroom average rent: $2,211 (up 1.5 percent since last year)

A college town with a youthful vibe and lively downtown, Bridgewater is home to Bridgewater State University and boasts the high energy and hip scene of an international campus.

Bridgewater and neighboring towns East Bridgewater and West Bridgewater are great midway points between Boston and Cape Cod.

Residents can take the MBTA Commuter Rail from Bridgewater Station to reach the big city in under an hour or enjoy a scenic drive over the Bourne Bridge to bask on the Cape beaches.

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Gloucester, MA. Gloucester, MA.

  • Distance from downtown Boston: 36.2 miles
  • One-bedroom average rent: N/A
  • Two-bedroom average rent: $1,760 (0.0 percent change since last year)

Located on Cape Ann, Gloucester is a dream come true for those who want to live by the sea. This peninsula paradise has beaches on two sides and is right next to the famous town of Rockport. Locals enjoy fresh seafood and an artsy scene — many creative souls appreciate the breathtaking scenery these towns have to offer.

Keep in mind that summer is the high season for coastal towns like Gloucester, and many of the beachy parts of Cape Ann cater to tourists and elderly snowbirds. While Gloucester is not as touristy as Rockport, year-round residents here should expect the liveliness of summer and a much quieter reprieve in winter.

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Plymouth, MA, one of the cities near bostonPlymouth, MA, one of the cities near boston

  • Distance from downtown Boston: 39.8 miles
  • One-bedroom average rent: $2,151 (up 2.8 percent since last year)
  • Two-bedroom average rent: $2,700 (up 4.5 percent since last year)

Often referred to as “America’s hometown,” Plymouth, founded by the Pilgrims in 1620, offers rich history alongside spectacular views of the ocean. The Mayflower II is on display in the downtown memorial park, not far from the monument protecting Plymouth Rock.

Enthusiasts of early American history will enjoy exploring the world-renowned Plimouth Plantation, where Plymouth residents enjoy a steep discount.

Locals and tourists alike love strolling downtown Plymouth with its waterfront shops and a picturesque harbor. Outside of the main commercial areas, scenic cranberry bogs and numerous nature parks dot the landscape.

Business picks up around Thanksgiving time, but unlike many other coastal parts of Massachusetts that host seasonal residents, Plymouth enjoys a steady population year-round.

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Make one of these cities near Boston your home city

Between a prosperous city life and oceanside charms, it is no wonder that Boston and its surrounding area have some of the most sought-after real estate in the country. Whether you want to bask in the rich history of the region or live an idyllic life by the sea, you can find your ideal place in one of these great cities near Boston.

Properties are in high demand, and space is exclusive, so start looking for your new home today.

Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of one-bedroom apartments in April 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

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Source: apartmentguide.com

5 Clever Ways to Get Your Post-Holiday Purge On

Renting an apartment doesn’t have to mean settling for bland decor. Our apartment decorating tips will help you update and improve both the interior and exterior of your apartment. From small space furniture layouts to balcony-friendly gardens, our team of experts can help you make your apartment feel like home.

Source: apartmentguide.com

Understanding Single-Family Home HOAs

Before you buy a home in an HOA-governed community, make sure you review the rules thoroughly.

What does HOA mean?

HOA means homeowners association. It can also be referred to as HOD or Home Owners Dues. HOAs can exist in planned housing developments, town homes, and condos. It is generally billed on a monthly basis.

Most people think of homeowners associations (HOAs), legally known as Common Interest Developments, as related to attached housing structures like condominiums or town homes. But this is not always the case.

Around the 1980s, developers started building communities of single-family homes that were actually Common Interest Developments. These communities came with their own sets of rules, regulations and HOA fees.

The reason builders starting developing communities in the HOAs structure was to maintain order and the aesthetics of a community. Their rules keep home paint colors and front yards in harmony, restrict building additions that don’t fit into the neighborhood, and stop owners from parking broken-down vehicles in their driveways or front yards. Such regulations assure new and existing owners that a neighbor’s behavior and choices will not diminish property values.

But they also mean that you must follow the rules yourself, and typically contribute monthly fees to manage and run the HOA for the benefit of all owners. When residents violate these rules — which can cause stress for other owners and hurt property values– the HOA will typically step in and enforce them with violation notices, fines and possibly litigation, if the issue gets that far.

The root of the issue

Often, the problem is not the rules, it’s that people don’t read the rules and regulations before they buy into a community, and then they violate the rules. But ignorance is no excuse — those rules are recorded on the property title, and likely given to every buyer to review before they purchase a home in a standard transaction. Owners are still bound by those rules whether they received and read them or not.

If you are buying into an HOA-governed community, be sure to read the rules and regulations before you buy. Once you’ve read them, if you don’t like them, then you should avoid buying a property in that community.

What if you already own in an HOA, and don’t like the rules or how the elected HOA board of directors interprets and enforces them? Luckily, an HOA is a democracy and the owners can vote out the board of directors and change the rules!

Any member-owner can try to get elected to the board and change the regulations. They just have to get enough other community members to support their opinion and vision for the community.

Unfortunately, most community members never go to a board meeting and never get involved. They just complain about the board — who are all volunteers, by the way — and complain about HOA fees, rules, and special assessments, etc.

If you are one of those owners who doesn’t like the rules, then get involved and take the time to campaign in your community, get on the board, and change the regulations.

Do Renters Pay HOA Dues?

“The landlord cannot force you to pay the HOA unless that is what is required in the lease. If it is part of the lease, then you have to pay. If not, you don’t, but the owner may decide to find another tenant when the lease is up.

If the HOA is not doing their job in clearing snow, I would write them a letter and send copy to the landlord. You are not the owner so they may not listen, but it gives you proof of the issue and may prompt the owner to act.”

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

The Benefits of Working Longer

Financial planners and analysts have long advised workers who haven’t saved enough for retirement to work longer. But even if you’ve done everything right—saved the maximum in your retirement plans, lived within your means and stayed out of debt—working a few extra years, even at a reduced salary, could make an enormous difference in the quality of your life in your later years. And given the potential payoff, it’s worth starting to think about how long you plan to continue working—and what you’d like to do—even if you’re a decade or more away from traditional retirement age.

Larry Shagawat, 63, is thinking about retiring from his full-time job, but he’s not ready to stop working. Fortunately, he has a few tricks up his sleeve. Shagawat, who lives in Clifton, N.J., began his career as an actor and a magician. But marriage (to his former magician’s assistant), two children and a mortgage demanded income that was more consistent than the checks he earned as an extra on Law & Order, so he landed a job selling architectural and design products. The position provided his family with a comfortable living.

Now, though, Shagawat is con­sidering stepping back from his high-pressure job so he can pursue roles as a character actor (he’s still a member of the Screen Actors Guild) and perform magic tricks at corporate events. He also has a side gig selling golf products, including a golf cart cigar holder and a vanishing golf ball magic trick, through his website, golfworldnow.com. “I’ll be busier in retirement than I am in my current career,” he says.

Shagawat’s second career offers an opportunity for him to return to his first love, but he’s also motivated by a powerful financial incentive. His brother, Jim Shagawat, a certified financial planner with AdvicePeriod in Paramus, N.J., estimates that if Larry earns just $25,000 a year over the next decade, he’ll increase his retirement savings by $750,000, assuming a 5% annual withdrawal rate and an average 7% annual return on his investments.

Do the math

For every additional year (or even month) you work, you’ll shrink the amount of time in retirement you’ll need to finance with your savings. Meanwhile, you’ll be able to continue to contribute to your nest egg (see below) while giving that money more time to grow. In addition, working longer will allow you to postpone filing for Social Security benefits, which will increase the amount of your payouts.

For every year past your full retirement age (between 66 and 67 for most baby boomers) that you postpone retiring, Social Security will add 8% in delayed-retirement credits, until you reach age 70. Even if you think you won’t live long enough to benefit from the higher payouts, delaying your benefits could provide larger survivor benefits for your spouse. If you file for Social Security at age 70, your spouse’s survivor benefits will be 60% greater than if you file at age 62, according to the Center for Retirement Research at Boston College.

Liz Windisch, a CFP with Aspen Wealth Management in Denver, says working longer is particularly critical for women, who tend to earn less than men over their lifetimes but live longer. The average woman retires at age 63, compared with 65 for the average man, according to the Center for Retirement Research. That may be because many women are younger than their husbands and are encouraged to retire when their husbands stop working. But a woman who retires early could find herself in financial jeopardy if she outlives her husband, because the household’s Social Security benefits will be reduced—and she could lose her husband’s pension income, too, says Andy Baxley, a CFP with The Planning Center in Chicago.

Calculate the cost of health care

Many retirees believe, sometimes erroneously, that they’ll spend less when they stop working. But even if you succeed in cutting costs, health care expenses can throw you a costly curve. Working longer is one way to prevent those costs from decimating your nest egg.

Employer-provided health insurance is almost always less expensive than anything you can buy on your own, and if you’re 65 or older, it may also be cheaper than Medicare. If you work full-time for a company with 20 or more employees, the company is required to offer you the same health insurance provided to all employees, even if you’re older than 65 and eligible for Medicare. Delaying Medicare Part B, which covers doctor and outpatient services, while you’re enrolled in an employer-provided plan can save you a lot of money, particularly if you’re vulnerable to the Medicare high-income surcharge, says Kari Vogt, a CFP and Medicare insurance broker in Columbia, Mo. In 2021, the standard premium for Medicare Part B is $148.50, but seniors subject to the high-income Medicare surcharge will pay $208 to $505 for Medicare Part B, depending on their 2019 modified adjusted gross income. Medicare Part A, which covers hospitalization, generally doesn’t cost anything and can pay for costs that aren’t covered by your company-provided plan.

Vogt recalls working with an older couple whose premiums for an employer-provided plan were just $142 a month, and the deductible was fairly modest. Because of their income levels, they would have paid $1,150 per month for Medicare premiums, a Medicare supplement plan and a prescription drug plan, she says. With that in mind, they decided to stay on the job a few more years.

The math gets trickier if your employer’s plan has a high deductible. But even then, Vogt says, by staying on an employer plan, older workers with high ongoing drug costs could end up paying less than they’d pay for Medicare Part D. “If someone is taking several brand-name drugs, an employer plan is going to cover those drugs at a much better price than Medicare.”

Even if you don’t qualify for group coverage—you’re a part-timer, freelancer or a contract worker, for example—the additional income will help defray the cost of Medicare premiums and other expenses Medicare doesn’t cover. The Fidelity Investments annual Retiree Health Care Cost Estimate projects that the average 65-year-old couple will spend $295,000 on health care costs in retirement.

Long-term care is another threat to your retirement security, even if you have a well-funded nest egg. In 2020, the median cost of a semiprivate room in a nursing home was more than $8,800 a month, according to long-term-care provider Genworth’s annual survey.

If you’re in your fifties or sixties and in good health, it’s difficult to predict whether you’ll need long-term care, but earmarking some of your income from a job for long-term-care insurance or a fund designated for long-term care will give you peace of mind, Baxley says.

And working longer could not only help cover the cost of long-term care but also reduce the risk that you’ll need it in the first place. A long-term study of civil servants in the United Kingdom found that verbal memory, which declines naturally with age, deteriorated 38% faster after individuals retired. Other research suggests that people who continue to work are less likely to experience social isolation, which can contribute to cognitive decline. Research by the Age Friendly Foundation and RetirementJobs.com, a website for job seekers 50 and older, found that more than 60% of older adults surveyed who were still working interacted with at least 10 different people every day, while only 15% of retirees said they spoke to that many people on a daily basis (the study was conducted before the pandemic). Even unpleasant colleagues and a bad boss “are better than social isolation because they provide cognitive challenges that keep the mind active and healthy,” economists Axel Börsch-Supan and Morten Schuth contended in a 2014 article for the National Bureau of Economic Research.

A changing workforce

Many job seekers in their fifties or sixties worry about age discrimination—and the pandemic has exacerbated those concerns. A recent AARP survey found that 61% of older workers who fear losing their job this year believe age is a contributing factor.  But that could change as the economy recovers, and trends that emerged during the pandemic could end up benefiting older workers, says Tim Driver, founder of RetirementJobs.com. Some companies plan to allow employees to work remotely indefinitely, a shift that could make staying on the job more attractive for older workers—and make employers more amenable to accommodating their desire for more flexibility. “People who are working longer already wanted to work from home, and this has helped them do that more easily,” Driver says. To make that work, though, older workers need to stay on top of technology, which means they need to be comfortable using Zoom, LinkedIn and other online platforms, he says.  

More-flexible arrangements—including remote work—could also benefit older adults who want to continue to earn income but don’t want to work 50 hours a week. Baxley says some of his clients have gradually reduced their hours, from four days a week while they’re in their fifties to three or two days a week as they reach their sixties and seventies.

That assumes, of course, that your employer doesn’t lay you off or waltz you out the door with a buyout offer you don’t think you can refuse. But even then, you don’t necessarily have to stop working. The gig economy offers opportunities for older workers, and you don’t have to drive for Uber to take advantage of this emerging trend. There are numerous companies that will hire professionals in law, accounting, technology and other fields as consultants, says Kathy Kristof, a former Kiplinger columnist and founder of SideHusl.com, a website that reviews and rates online job platforms. Examples include FlexProfessionals, which finds part-time jobs for accountants, sales representatives and others for $25 to $40 an hour, and Wahve, which finds remote jobs for experienced workers in accounting, insurance and human resources (pay varies by experience).

Job seekers in their fifties (or even younger) who want to work into their sixties or later may want to consider an employer’s track record of hiring and retaining older workers when comparing job offers. Companies designated as Certified Age Friendly Employers by the Age Friendly Foundation have been steadily increasing and range from Home Depot to the Boston Red Sox. Driver says age-friendly employers are motivated by a desire for a more diverse workforce—which includes workers of all ages—and the realization that older workers are less likely to leave. Contrary to the assumption that older workers have one foot out the door toward retirement, their turnover rate is one-third of that for younger workers, Driver says.

At the Aquarium of the Pacific, an age-friendly employer based in Long Beach, Calif., employees older than 60 work in a variety of jobs, from guest service ambassadors to positions in the aquarium’s retail operations, says Kathie Nirschl, vice president of human resources (who, at 59, has no plans to retire anytime soon). Many of the aquarium’s visitors are seniors, and having older workers on staff helps the organization connect with them, Nirschl says.

John Rouse, 61, is the aquarium’s vice president of operations, a job that involves everything from facility maintenance to animal husbandry. He estimates that he walks between 12,000 and 13,000 steps a day to monitor the aquarium’s operations.

Rouse says he had originally planned to retire in his early sixties, but he has since revised those plans and now hopes to work until at least 68. He has a daughter in college, which is expensive, and he would like to delay filing for Social Security. Plus, he enjoys spending time at the aquarium with the fish, animals and coworkers. “It’s a great team atmosphere,” he says. “It has kept me young.”

New rules help seniors save

If you’re planning to keep working into your seventies—which is no longer unusual—provisions in the 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act will make it easier to increase the size of your retirement savings or shield what you’ve saved from taxes.

Among other things, the law eliminated age limits on contributions to an IRA. Previously, you couldn’t contribute to a traditional IRA after age 70½. Now, if you have earned income, you can contribute to a traditional IRA at any age and, if you’re eligible, deduct those contributions. (Roth IRAs, which may be preferable for some savers because qualified withdrawals are tax-free, have never had an age cut-off as long as the contributor has earned income.)

The law also allows part-time workers to contribute to their employer’s 401(k) or other employer-provided retirement plan, which will benefit older workers who want to stay on the job but cut back their hours. The SECURE Act guarantees that workers can contribute to their employer’s 401(k) plan, as long as they’ve worked at least 500 hours a year for the past three years. Previously, employees who had worked less than 1,000 hours the year before were ineligible to participate in their employer’s 401(k) plan.

Delayed RMDs. If you have money in traditional IRAs or other tax-deferred accounts, you can’t leave it there forever. The IRS requires that you take minimum distributions and pay taxes on the money. If you’re still working, that income, combined with required minimum distributions, could push you into a higher tax bracket.

Congress waived RMDs in 2020, but that’s unlikely to happen again this year. Thanks to the SECURE Act, however, you don’t have to start taking them until you’re 72, up from the previous age of 70½. Keep in mind that if you’re still working at age 72, you’re not required to take RMDs from your current employer’s 401(k) plan until you stop working (unless you own at least 5% of the company).

One other note: If you work for yourself, whether as a self-employed business owner, freelancer or contractor, you can significantly increase the size of your savings stash. In 2021, you can contribute up to $58,000 to a solo 401(k), or $64,500 if you’re 50 or older. The actual amount you can contribute will be determined by your self-employment income.

chart that shows payoff from putting off retirement for a few yearschart that shows payoff from putting off retirement for a few years

Source: kiplinger.com

The Benefits of Working Longer

Financial planners and analysts have long advised workers who haven’t saved enough for retirement to work longer. But even if you’ve done everything right—saved the maximum in your retirement plans, lived within your means and stayed out of debt—working a few extra years, even at a reduced salary, could make an enormous difference in the quality of your life in your later years. And given the potential payoff, it’s worth starting to think about how long you plan to continue working—and what you’d like to do—even if you’re a decade or more away from traditional retirement age.

Larry Shagawat, 63, is thinking about retiring from his full-time job, but he’s not ready to stop working. Fortunately, he has a few tricks up his sleeve. Shagawat, who lives in Clifton, N.J., began his career as an actor and a magician. But marriage (to his former magician’s assistant), two children and a mortgage demanded income that was more consistent than the checks he earned as an extra on Law & Order, so he landed a job selling architectural and design products. The position provided his family with a comfortable living.

Now, though, Shagawat is con­sidering stepping back from his high-pressure job so he can pursue roles as a character actor (he’s still a member of the Screen Actors Guild) and perform magic tricks at corporate events. He also has a side gig selling golf products, including a golf cart cigar holder and a vanishing golf ball magic trick, through his website, golfworldnow.com. “I’ll be busier in retirement than I am in my current career,” he says.

Shagawat’s second career offers an opportunity for him to return to his first love, but he’s also motivated by a powerful financial incentive. His brother, Jim Shagawat, a certified financial planner with AdvicePeriod in Paramus, N.J., estimates that if Larry earns just $25,000 a year over the next decade, he’ll increase his retirement savings by $750,000, assuming a 5% annual withdrawal rate and an average 7% annual return on his investments.

Do the math

For every additional year (or even month) you work, you’ll shrink the amount of time in retirement you’ll need to finance with your savings. Meanwhile, you’ll be able to continue to contribute to your nest egg (see below) while giving that money more time to grow. In addition, working longer will allow you to postpone filing for Social Security benefits, which will increase the amount of your payouts.

For every year past your full retirement age (between 66 and 67 for most baby boomers) that you postpone retiring, Social Security will add 8% in delayed-retirement credits, until you reach age 70. Even if you think you won’t live long enough to benefit from the higher payouts, delaying your benefits could provide larger survivor benefits for your spouse. If you file for Social Security at age 70, your spouse’s survivor benefits will be 60% greater than if you file at age 62, according to the Center for Retirement Research at Boston College.

Liz Windisch, a CFP with Aspen Wealth Management in Denver, says working longer is particularly critical for women, who tend to earn less than men over their lifetimes but live longer. The average woman retires at age 63, compared with 65 for the average man, according to the Center for Retirement Research. That may be because many women are younger than their husbands and are encouraged to retire when their husbands stop working. But a woman who retires early could find herself in financial jeopardy if she outlives her husband, because the household’s Social Security benefits will be reduced—and she could lose her husband’s pension income, too, says Andy Baxley, a CFP with The Planning Center in Chicago.

Calculate the cost of health care

Many retirees believe, sometimes erroneously, that they’ll spend less when they stop working. But even if you succeed in cutting costs, health care expenses can throw you a costly curve. Working longer is one way to prevent those costs from decimating your nest egg.

Employer-provided health insurance is almost always less expensive than anything you can buy on your own, and if you’re 65 or older, it may also be cheaper than Medicare. If you work full-time for a company with 20 or more employees, the company is required to offer you the same health insurance provided to all employees, even if you’re older than 65 and eligible for Medicare. Delaying Medicare Part B, which covers doctor and outpatient services, while you’re enrolled in an employer-provided plan can save you a lot of money, particularly if you’re vulnerable to the Medicare high-income surcharge, says Kari Vogt, a CFP and Medicare insurance broker in Columbia, Mo. In 2021, the standard premium for Medicare Part B is $148.50, but seniors subject to the high-income Medicare surcharge will pay $208 to $505 for Medicare Part B, depending on their 2019 modified adjusted gross income. Medicare Part A, which covers hospitalization, generally doesn’t cost anything and can pay for costs that aren’t covered by your company-provided plan.

Vogt recalls working with an older couple whose premiums for an employer-provided plan were just $142 a month, and the deductible was fairly modest. Because of their income levels, they would have paid $1,150 per month for Medicare premiums, a Medicare supplement plan and a prescription drug plan, she says. With that in mind, they decided to stay on the job a few more years.

The math gets trickier if your employer’s plan has a high deductible. But even then, Vogt says, by staying on an employer plan, older workers with high ongoing drug costs could end up paying less than they’d pay for Medicare Part D. “If someone is taking several brand-name drugs, an employer plan is going to cover those drugs at a much better price than Medicare.”

Even if you don’t qualify for group coverage—you’re a part-timer, freelancer or a contract worker, for example—the additional income will help defray the cost of Medicare premiums and other expenses Medicare doesn’t cover. The Fidelity Investments annual Retiree Health Care Cost Estimate projects that the average 65-year-old couple will spend $295,000 on health care costs in retirement.

Long-term care is another threat to your retirement security, even if you have a well-funded nest egg. In 2020, the median cost of a semiprivate room in a nursing home was more than $8,800 a month, according to long-term-care provider Genworth’s annual survey.

If you’re in your fifties or sixties and in good health, it’s difficult to predict whether you’ll need long-term care, but earmarking some of your income from a job for long-term-care insurance or a fund designated for long-term care will give you peace of mind, Baxley says.

And working longer could not only help cover the cost of long-term care but also reduce the risk that you’ll need it in the first place. A long-term study of civil servants in the United Kingdom found that verbal memory, which declines naturally with age, deteriorated 38% faster after individuals retired. Other research suggests that people who continue to work are less likely to experience social isolation, which can contribute to cognitive decline. Research by the Age Friendly Foundation and RetirementJobs.com, a website for job seekers 50 and older, found that more than 60% of older adults surveyed who were still working interacted with at least 10 different people every day, while only 15% of retirees said they spoke to that many people on a daily basis (the study was conducted before the pandemic). Even unpleasant colleagues and a bad boss “are better than social isolation because they provide cognitive challenges that keep the mind active and healthy,” economists Axel Börsch-Supan and Morten Schuth contended in a 2014 article for the National Bureau of Economic Research.

A changing workforce

Many job seekers in their fifties or sixties worry about age discrimination—and the pandemic has exacerbated those concerns. A recent AARP survey found that 61% of older workers who fear losing their job this year believe age is a contributing factor.  But that could change as the economy recovers, and trends that emerged during the pandemic could end up benefiting older workers, says Tim Driver, founder of RetirementJobs.com. Some companies plan to allow employees to work remotely indefinitely, a shift that could make staying on the job more attractive for older workers—and make employers more amenable to accommodating their desire for more flexibility. “People who are working longer already wanted to work from home, and this has helped them do that more easily,” Driver says. To make that work, though, older workers need to stay on top of technology, which means they need to be comfortable using Zoom, LinkedIn and other online platforms, he says.  

More-flexible arrangements—including remote work—could also benefit older adults who want to continue to earn income but don’t want to work 50 hours a week. Baxley says some of his clients have gradually reduced their hours, from four days a week while they’re in their fifties to three or two days a week as they reach their sixties and seventies.

That assumes, of course, that your employer doesn’t lay you off or waltz you out the door with a buyout offer you don’t think you can refuse. But even then, you don’t necessarily have to stop working. The gig economy offers opportunities for older workers, and you don’t have to drive for Uber to take advantage of this emerging trend. There are numerous companies that will hire professionals in law, accounting, technology and other fields as consultants, says Kathy Kristof, a former Kiplinger columnist and founder of SideHusl.com, a website that reviews and rates online job platforms. Examples include FlexProfessionals, which finds part-time jobs for accountants, sales representatives and others for $25 to $40 an hour, and Wahve, which finds remote jobs for experienced workers in accounting, insurance and human resources (pay varies by experience).

Job seekers in their fifties (or even younger) who want to work into their sixties or later may want to consider an employer’s track record of hiring and retaining older workers when comparing job offers. Companies designated as Certified Age Friendly Employers by the Age Friendly Foundation have been steadily increasing and range from Home Depot to the Boston Red Sox. Driver says age-friendly employers are motivated by a desire for a more diverse workforce—which includes workers of all ages—and the realization that older workers are less likely to leave. Contrary to the assumption that older workers have one foot out the door toward retirement, their turnover rate is one-third of that for younger workers, Driver says.

At the Aquarium of the Pacific, an age-friendly employer based in Long Beach, Calif., employees older than 60 work in a variety of jobs, from guest service ambassadors to positions in the aquarium’s retail operations, says Kathie Nirschl, vice president of human resources (who, at 59, has no plans to retire anytime soon). Many of the aquarium’s visitors are seniors, and having older workers on staff helps the organization connect with them, Nirschl says.

John Rouse, 61, is the aquarium’s vice president of operations, a job that involves everything from facility maintenance to animal husbandry. He estimates that he walks between 12,000 and 13,000 steps a day to monitor the aquarium’s operations.

Rouse says he had originally planned to retire in his early sixties, but he has since revised those plans and now hopes to work until at least 68. He has a daughter in college, which is expensive, and he would like to delay filing for Social Security. Plus, he enjoys spending time at the aquarium with the fish, animals and coworkers. “It’s a great team atmosphere,” he says. “It has kept me young.”

New rules help seniors save

If you’re planning to keep working into your seventies—which is no longer unusual—provisions in the 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act will make it easier to increase the size of your retirement savings or shield what you’ve saved from taxes.

Among other things, the law eliminated age limits on contributions to an IRA. Previously, you couldn’t contribute to a traditional IRA after age 70½. Now, if you have earned income, you can contribute to a traditional IRA at any age and, if you’re eligible, deduct those contributions. (Roth IRAs, which may be preferable for some savers because qualified withdrawals are tax-free, have never had an age cut-off as long as the contributor has earned income.)

The law also allows part-time workers to contribute to their employer’s 401(k) or other employer-provided retirement plan, which will benefit older workers who want to stay on the job but cut back their hours. The SECURE Act guarantees that workers can contribute to their employer’s 401(k) plan, as long as they’ve worked at least 500 hours a year for the past three years. Previously, employees who had worked less than 1,000 hours the year before were ineligible to participate in their employer’s 401(k) plan.

Delayed RMDs. If you have money in traditional IRAs or other tax-deferred accounts, you can’t leave it there forever. The IRS requires that you take minimum distributions and pay taxes on the money. If you’re still working, that income, combined with required minimum distributions, could push you into a higher tax bracket.

Congress waived RMDs in 2020, but that’s unlikely to happen again this year. Thanks to the SECURE Act, however, you don’t have to start taking them until you’re 72, up from the previous age of 70½. Keep in mind that if you’re still working at age 72, you’re not required to take RMDs from your current employer’s 401(k) plan until you stop working (unless you own at least 5% of the company).

One other note: If you work for yourself, whether as a self-employed business owner, freelancer or contractor, you can significantly increase the size of your savings stash. In 2021, you can contribute up to $58,000 to a solo 401(k), or $64,500 if you’re 50 or older. The actual amount you can contribute will be determined by your self-employment income.

chart that shows payoff from putting off retirement for a few yearschart that shows payoff from putting off retirement for a few years

Source: kiplinger.com

Understanding Pivot Points for New Investors

Pivot points are a tool that traders use to determine price levels of technical significance on intraday charts. A pivot point can help to identify a potential price reversal, which traders can then use (often in tandem with other technical indicators) as a cue to buy or sell.

When used alongside other common technical indicators, identifying pivot points can be part of an effective trading strategy. Pivot points are regarded as being important indicators for day traders.

What is a Pivot Point?

Pivot points are predictive indicators that average the high, low, and closing price from the previous period to define future support levels. These pivot points can help inform a decision to buy or sell.

The main pivot point is considered to be of the utmost importance. This point indicates the price at which bullish and bearish forces tend to flip to one side or the other (i.e., the price where sentiment tends to pivot from). When prices rise above the pivot point, this could be considered bullish, while prices falling beneath the pivot point could be considered bearish.

Brief History of Pivot Points

Pivot points got their start back when traders gathered on the floor of stock exchanges. Calculating a pivot point using yesterday’s data gave these traders a price level to watch for throughout the day. Pivot point calculations are considered leading indicators.

Today, pivot points are used by traders around the world, particularly in the forex and equity markets.

Different Types of Pivot Points

There are several different kinds of pivot points in addition to the standard ones. The variations make some changes or additions to the basic pivot point calculations to bring additional insight to the price action.

Standard Pivot Points

These are the most basic pivot points. They begin with a base pivot point, which is the average of the high, low, and closing prices from a previous trading period.

Fibonacci Pivot Points

Fibonacci projections, named after a mathematical sequence found in nature, connect any two points a trader might see as important. The percentage levels that follow are potential areas of a trend change. Most commonly, these percentage levels are 23.6%, 38.2%, 50%, 61.8%, and 78.6%. It’s thought that when an asset falls to one of these levels, the price might stall or reverse.

Many traders love using Fibonacci projection levels in some form or another. These work well in conjunction with pivot points because both aim to identify levels of support and resistance.

Woodie’s Pivot Point

The Woodie’s pivot point places a greater emphasis on the closing price of a security. The calculation only varies slightly from the standard formula for pivot points.

Demark Pivot Points

Demark points create a different relationship between the open and close price points, using the number X to calculate support and resistance, and also emphasizes recent price action. This pivot point was introduced by a trader named Tom Demark.

How Do I Read Pivot Points?

A trader might read a pivot point as they would any other level of support or resistance. Traders generally believe that when prices break out beyond a support or resistance level, there’s a good chance that the trend will continue for some length of time.

•  When prices fall beneath support, this could indicate bearish sentiment, and the decline could continue.
•  When prices rise above resistance, this could indicate bullish sentiment, and the rise could continue.
•  Pivot points can also be used to draw trend lines in attempts to recognize bigger technical patterns.

What Are the Resistance and Support Levels in Pivot Points?

The numbers R1, R2, R3 and S1, S2, S3 refer to the resistance (R) and support (S) levels used to calculate pivot points. These six numbers combined with the basic pivot point level (PP) provide the seven metrics needed to determine pivot points.

Resistance 1 (R1): The first pivot level above the PP.
Resistance 2 (R2): The first pivot level above R1, or the second pivot level above the PP.
Resistance 3 (R3): The first pivot level above R2, or the third pivot level above the PP.
Support 1 (S1): The first pivot level below the PP.
Support 2 (S2): The first pivot level below the PP, or the second below S1.
Support 3 (S3): The first pivot level below the PP, or the third below S2.

Which Pivot Points Are Best for Intraday?

Because technical analysis has a large subjective component to it, traders will likely have their own interpretations of which pivot points are most important for intraday trading.

While some traders are fond of Fibonacci pivot points, others may prefer different points.

There are communities online, like TradingView, where traders gather to discuss ideas like these.

Pivot Points Calculations

The PP is vital for the pivot point formula as a whole. It’s important to exercise caution when calculating the PP level, because if this calculation is done incorrectly, the other levels will not be accurate.
The formula for calculating the PP is:

Pivot Point (PP) = (Daily high + daily low + close) divided by 3

To make the calculations for pivot points, a chart from the previous trading day will be needed. This is where the values for the daily low, daily high, and closing prices are obtained. The resulting calculations are only relevant for the current day.

All the formulas for R1-R3 and S1-S3 include the basic pivot level (PP) value. Once the PP has been calculated, you can move on to calculating R1, R2, S1 and S2:

R1 = (PP x 2) – daily low
R2 = PP + (daily high – daily low)
S1 = (PP x 2) – daily high
S2 = PP – (daily high – daily low)

At this point, there are only two more levels to calculate, those of R3 and S3.

R3 = Daily high + 2x (PP – daily low)
S3 = Daily low – 2x (daily high – PP)

How Are Weekly Pivot Points Calculated?

While pivot points are most commonly used for intraday charts, the same thing could be accomplished for a weekly time frame by instead using a weekly chart from the previous week as the basis for calculations that would apply to the current week.

The Takeaway

The pivot point indicator is best used with other indicators on short, intraday time frames. This indicator is thought to provide a good guess as to where prices could “pivot” in one direction or another.

Different types of pivot points are preferred by different traders, and they all can potentially be incorporated into a successful trading plan.

For hands-on investors, active investing with a SoFi Invest® online brokerage account lets members make trades and manage their account directly from the convenient mobile app.

Find out how to get started with SoFi Invest.


SoFi Invest®
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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
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Source: sofi.com

Cheap Mother’s Day Gifts Under $20 Including Shipping

While some families feel safer reuniting for Mother’s Day this year with vaccination programs rolling out across the country, others are still keeping their distance as they wait for everyone to get shots.

Pandemic aside, some of us live across the country or state from dear old Mom and can’t treat her to brunch. Whatever’s keeping you and Mom apart this Mother’s Day, May 9, there are plenty of ways you can show her you love and miss her. Not only that, but you can do it all while going easy on your wallet.

To help, we’ve put together a list of 20 Mother’s Day gifts under $20 you can order online. And that $20 includes shipping — free for some items.

Mother’s Day Gifts That Will Help Her Get Outdoors

The outdoors is a safer place to hang out than inside thanks to the coronavirus.

Pickleball Glove for Mom

Pickleball is the hottest team sport these days. This is the perfect season to play socially-distanced and outdoors. If your mom is seriously into this sport, you can pick her up a brand-name pickleball glove on Amazon for between $18 and $20. If you have Prime membership, shipping is free, keeping you under budget.

Annual Flower Bulbs

Does Mom love gardening?

Give her a gift that keeps on giving with annual bulbs. Plant these flowers once, and they will bloom year after year. Bulbs that need a freeze to bloom (iris, daffodils, tulips) are typically put in the ground in the fall before it gets too hard for digging and they pop up and blossom in spring. The following bulbs can be planted in the spring to bloom in the summer.

Gladiolus Flower Bulbs

Gladiolus are beautiful and you can get a lot of them even on a budget. You can pick your color, ordering a bag in white or purple for  $13.95 on Walmart’s platform. Shipping is free.

Lily Flower Bulbs

You can get about three lily bulbs for under $20. Some options from Walmart sellers include:

These options run between $13.95 and $15.99 and come with free shipping.

Gift Certificate to a Local Garden Center

Maybe Mom doesn’t have space for a garden, but does love having flowers and plants around. In this case, consider getting her a gift certificate to her local garden center for $20.

There’s an added bonus to sending your card on Mother’s Day; when she goes shopping after the holiday, excess inventory will be marked down dramatically, giving her more bang for her buck.

A blue butterfly stands out amongst a group of red butterflies.
Getty Images

Butterfly Habitat

Butterfly habitats may be marketed towards children, but Mom can enjoy one, too! This kit from Target is $19.99, and comes with a habitat and voucher for live caterpillars — which ship separately. Your order should qualify for free shipping.

Mom will be able to watch the caterpillars as they build their chrysalises and grow into butterflies, eventually releasing them into the wild. Bonus points for sending a card with a cheesy analogy about how she helped you grow into a butterfly, and what a great job she did.

Sweets & Culinary Gift Ideas for Moms

Mother’s Day is a great time to shower your mom with sweets. Or, if Mom’s great in the kitchen, it’s a fun time to celebrate those skills with gifts.

Personalized Recipe Cards

Mom’s a great cook. Everyone’s always asking her for recipes. Pick her up a set of personalized recipe cards on Etsy so she’ll get full credit when she shares her skills. This set costs $10.75 and ships free to the US.

Heart-Shaped Pan

We’ve all been cooking at home this past year — perhaps way more than normal. Turn the mundane fun with this heart-shaped pan from Ecolution on Amazon.com. Whether your mother’s making pancakes or eggs, she’ll appreciate that Ecolution’s products are eco-friendly yet durable. You’ll appreciate that it clocks in at just $12.51 and ships free with Prime membership.

Fruit Infusion Pitcher

We haven’t just been eating at home a lot more often — we’ve been drinking at home a lot more often, too. This fruit infusion pitcher is great for making mimosas and flavored water alike. It is $19.99 on Amazon.com and ships free with Prime membership.

Chocolate

Believe it or not, you can get a fair amount of good chocolate for under $20. The “ G-Cube” from Godiva comes with an assortment of 22 flavors, and costs $11.95. With shipping, you can expect to pay around $19.95.

Delivery from a Local Bakery

Ask your mom about her favorite local bakery recommendations. Then, place an order for delivery with them on Mother’s Day. This allows you to not only get mom a gift, but also support small businesses in her community.

If the delivery fee would put you over budget and Mom is vaccinated, you can find another way. You could likely request curbside pickup or she could take a very quick trip inside while double-masked to pick up the treats herself.

Self-Care Gifts for Mother’s Day

We all need a little more self-care these days. Help Mom relax with these soothing Mother’s Day gift ideas until you can see each other again.

Comfortable Sleep Mask

A lot of people have experienced insomnia throughout this pandemic. If Mom’s one of them, you might want to consider helping her get some better shut eye. This silk satin sleep mask from Kessom on Walmart’s platform not only comes in under budget with no shipping costs, but also comes with a matching scrunchie and storage pouch.

Shea Butter Replenishing Bar Soap

This shea butter soap, infused with essential oils, lots of benefits. Rebourne Home + Body says it can:

  • Fight inflammation.
  • Heal chapped, dull or prematurely aging skin.
  • Fight eczema.
  • Improve skin elasticity.
  • Increase blood circulation.

Rebourne sells high-quality bath and beauty products. This one will cost you around $19.45 to send to mom after accounting for shipping costs.

A woman puts cucumbers over her eyes as she sits up with a charcoal facial mask on her.
Getty Images

Luxe Face Masks

Charmed Bath & Body offers several different face masks available via Etsy. You can choose from:

  • Matcha
  • Rose clay.
  • White clay
  • Charcoal
  • Turmeric

It should cost you around $15.95 in all to purchase and ship one of these mask powders for Mother’s Day.

Mother’s Day Coloring Book

Give Mom an opportunity to de-stress with this Mother’s Day coloring book from Amazon. Each page comes with intricate drawings to color in and encouraging and cute quotes about motherhood.

This book is $14.99 and ships free for Prime members.

Blue Light Glasses

We’ve all been spending a lot more time in front of screens over the past year. That means we’ve been spending a lot more time staring at blue light, which can cause migraines, damage our vision and even throw off circadian rhythms, our natural sleep-wake cycles.

Help Mom out with some self-care she didn’t even know she needed with these blue light blocking glasses from Nordstrom. They’re only $15 and shipping is free.

Sentimental Mother’s Day Gifts Under $20

These sweet, mom-centric products will highlight your relationship as you take a trip down memory lane.

Tell Me Your Story Book (Grandma Edition)

You know what’s been happening a lot less often thanks to the pandemic and social distancing? We aren’t telling each other as many stories on a regular basis. That includes grandmas telling their own life stories and family histories to their grandchildren.

Compensate for the loss over the past year with this memory journal. It’s available for $10 on Amazon.com with free shipping for Prime members.

Tell Me Your Story Book (Mom Edition)

Don’t have kids, but love the memory book idea?

Fear not. There is a version of these products for children to give directly to their moms — no procreation required. This daily journal of childhood memories will run you $12, once again with free shipping for Amazon Prime members.

You & Me Mom Journal

Want to make the memory journal thing a two way street?

This journal from Uncommon Goods can be sent back and forth between you and your mother. Each page has prompts encouraging the two of you to reflect on your life memories and love together over the years. It will run you $13, and should come in just under $20 after accounting for shipping costs.

Photo Book

There’s nothing moms love more than pictures of their kids and grandkids . Photo books can often be cumbersome to create, or come with deceptive discounts and “deals” that don’t account for exorbitant shipping costs.

You can get around all that by creating a book with Google Photos. You can easily import all the pictures already on your Google account, and can create a 20-page, soft-cover photo book that’s sure to put a smile on her face for just $13.95 including shipping.

Cash

You’re shopping on a tight budget, so your wallet is probably thin right now. She might not want to admit it, but money might be tight for your mom in this pandemic, too.

Instead of buying her physical presents, consider sending her the cash. If Mom’s on Venmo or CashApp, you can keep things completely socially distant. Be sure to send a card or heartfelt note.

Brynne Conroy is a contributor to The Penny Hoarder. She blogs at femmefrugality.com. 



Source: thepennyhoarder.com

Adoption Tax Credits 2020 (Federal & State) – Requirements & Eligibility

The decision to adopt a child is a big one for any prospective parent, and one of the concerns often has to do with costs. Adoption-related expenses can vary widely depending on whether you work with an agency, adopt from foster care, work directly with the birth parents, or adopt internationally.

Fortunately, there are federal and state assistance programs that minimize financial obstacles to adoption.

Federal Adoption Tax Credit and Adoption Assistance Programs

The U.S. Tax Code provides two separate assistance programs for prospective adoptive parents. Both programs help cover qualified adoption expenses, which the IRS defines as:

  • Reasonable and necessary adoption fees
  • Court costs and attorney fees
  • Traveling expenses (including meals and lodging while away from home)
  • Other expenses directly related to the legal adoption of a child

To qualify, you must pay the expense to adopt a child under the age of 18 or someone of any age who is physically or mentally incapable of self-care. Qualified expenses don’t include expenses paid to adopt a stepchild.

Adoption Tax Credit

The federal adoption tax credit is worth up to $14,300 per child for the 2020 tax year.

Parents who adopt a “special needs” child automatically qualify for the maximum credit, regardless of their actual adoption expenses. The IRS’s definition of a special needs adoption might differ from definitions used elsewhere.

The adoption must meet all three of the following criteria to qualify as a special needs adoption:

  1. The child was a citizen or resident of the U.S. or its possessions when the adoption effort began.
  2. The state determined that the child can’t or shouldn’t return to their parent’s home.
  3. The state determined that the child probably wouldn’t be adoptable unless it assists the adoptive family financially.

Based on those criteria, foreign adoptions aren’t considered special needs. Also, U.S. children with disabilities might not be regarded as special needs if the state doesn’t consider them difficult to place for adoption.

Income Limitations

However, the amount of the federal adoption tax credit phases out for high-income taxpayers. It begins to phase out once your modified adjusted gross income (MAGI) reaches $214,520 and phases out entirely at $254,520.

The credit phases out proportionally if your income is between $214,520 and $254,520.

So if your income is $234,520 — the midpoint of the phase-out range — the amount of your credit is cut in half. If your income is $224,520 — one-quarter of the phase-out range — the amount of your credit is reduced by 25%.

The income limits apply whether you’re single or married and file a joint tax return with your spouse. The adoption tax credit isn’t available if your filing status is married filing separately.

Refundability

The adoption tax credit is nonrefundable. In other words, if it reduces your tax liability for the year below zero, you won’t receive the excess as a tax refund.

However, you can carry any unused credit forward for up to five years, using it to offset your tax liability in the future.

When You Can Claim the Credit

The rules for claiming the credit depend on whether the adoption is domestic or foreign.

Domestic Adoptions

If you adopt a U.S. child, you can claim adoption expenses for the tax year following the year of payment, even if you never finalize the adoption. However, any costs you used to claim the credit on an unsuccessful adoption will reduce the amount you can claim for a subsequent adoption.

For example, say you started the adoption process in 2018, but the adoption fell through. You used $3,000 of expenses to claim the adoption tax credit on your 2019 return.

In 2020, you made another attempt to adopt, spending $10,000, and successfully finalized the adoption that year. When you claim the adoption credit on your 2020 tax return, you can only claim $7,000 of expenses ($10,000 – $3,000).

Foreign Adoptions

If you adopt a child who isn’t yet a citizen or resident of the U.S. or its possessions, you can only claim the credit in the year the adoption becomes final.

For example, say you start adopting a child from Ukraine in 2019 and spend $5,000 that year. You cannot claim the adoption tax credit in 2019 because you didn’t finalize the adoption.

In 2020, you spent another $8,000 and finalized the adoption. You can use all $13,000 of expenses to calculate the credit on your 2020 tax return.

You can claim the federal adoption tax credit by completing Form 8839 and attaching it to your federal income tax return, Form 1040.

Employer-Provided Adoption Benefits

Some employers reimburse employees for adoption expenses. The IRS offers a tax break for these benefits as well, as long as the adoption assistance program meets the following criteria:

  • The program benefits all eligible employees, not just highly compensated employees.
  • The program doesn’t pay more than 5% of its benefits to shareholders or owners (or their spouses or dependents).
  • The employer must give reasonable notice of the plan to eligible employees.
  • Employees must provide reasonable substantiation (such as receipts or other documentation) to show that the payments or reimbursements are for qualifying expenses.

If the program meets that criteria, then the payments or reimbursements don’t count as taxable income on the employee’s federal income tax return, and the employer doesn’t have to withhold federal income tax from the payment. However, the employer must still withhold Social Security and Medicare taxes.

Adoptive families can take advantage of both the adoption tax credit and the income exclusion. However, you can’t claim the exclusion and the credit on the same expenses, and the maximum dollar limit ($14,300 for 2020) still applies.

For example, say you have $15,000 of qualified adoption expenses in 2020, and your employer’s adoption assistance program reimburses a maximum of $9,000. You can use the remaining $5,300 of expenses to calculate your adoption tax credit on your 2020 tax return.

That’s the $14,300 maximum dollar limit, minus the $9,000 of expenses already reimbursed by your employer. You won’t get any tax benefits for the remaining $700 of expenses ($15,000 – $14,300).


State Adoption Tax Credits

Many states offer tax credits for families who adopt children from the public child welfare system. Here’s a summary of tax credits available in each state as of the 2020 tax year:

State Tax Credit Amount
Alabama Yes Up to $1,000
Alaska No income tax
Arizona No
Arkansas Yes Up to 20% of the federal adoption tax credit claimed
California Yes Up to $2,500
Colorado No
Connecticut No
Delaware No
District of Columbia No
Florida No income tax
Georgia Yes Up to $2,000
Hawaii No
Idaho No
Illinois No
Indiana Yes The lesser of $1,000 or 10% of your claimed federal adoption tax credit
Iowa Yes Up to $5,000
Kansas Yes 25% of the adoption tax credit claimed on your federal tax return (up to $1,500)
Kentucky No
Louisiana No
Maine No
Maryland No
Massachusetts Yes Income exemption for adoption fees paid to a licensed adoption agency
Michigan No
Minnesota No
Mississippi Yes Up to $2,500
Missouri Yes Up to $10,000
Montana Yes Up to $1,000
Nebraska No
Nevada No income tax
New Hampshire No tax on wages
New Jersey No
New Mexico Yes Up to $1,000
New York No
North Carolina No
North Dakota No
Ohio Yes Up to $1,500
Oklahoma Yes Tax deduction for up to $20,000 of expenses
Oregon No
Pennsylvania No
Rhode Island No
South Carolina Yes Tax deduction for up $2,000 of expenses
South Dakota No income tax
Tennessee No tax on wages
Texas No income tax
Utah Yes Up to $1,000
Vermont No
Virginia No
Washington No income tax
West Virginia Yes Up to $4,000
Wisconsin Yes Up to $5,000
Wyoming No income tax

The rules for claiming adoption tax breaks vary by state and can change from year to year, so talk to your tax advisor to make sure you qualify.


Final Word

Adopting a child can strain family finances, but tax credits can help offset the costs.

And once you’ve finalized the adoption, remember you may be able to take advantage of several more tax breaks for parents. This includes claiming your adopted child as a dependent and claiming the child tax credit and the child and dependent care credit.

Source: moneycrashers.com

Chapter 7 vs. Chapter 13 Bankruptcy – Lexington Law

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Bankruptcy is a legal process that lets you restructure your debts or have them discharged. The details of how your bankruptcy plays out depend on your overall financial situation and what type of bankruptcy you file, but the goal of bankruptcy is to help debtors who can’t pay all their debts create a path toward a better financial future while paying as much as they can. To determine how much you pay, consider Chapter 7 vs. Chapter 13 bankruptcy.

It’s important to note that bankruptcy should be a last resort. It has serious consequences for your credit and immediate financial future, which means you may want to consider all other options first. Find out more about Chapter 7 vs. Chapter 13 bankruptcy below and then talk to a lawyer about what might be best for you—many bankruptcy attorneys offer free consultations for this purpose.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is sometimes referred to as liquidation bankruptcy or the fresh start bankruptcy.  While every situation is handled according to the details of the case, the basic concept of Chapter 7 is that your non-exempt assets are liquidated to repay creditors and any remaining debt not covered is discharged in the bankruptcy.  It should be noted that many families have no non-exempt assets, or very few non-exempt assets.

How It Works

First, you go through a pre-filing credit counseling course and obtain a certificate that you file when you file a petition with the court for Chapter 7 bankruptcy.  Before filing chapter 7 you must perform the “means test” to determine whether you qualify for chapter 7 at all. 

The means test considers your income for the preceding six months, your family size, and some other factors.  If you qualify for chapter 7 you can prepare and file your chapter 7 papers yourself, but most experts recommend working with a bankruptcy lawyer, as the process is complex.

You must also submit records including lists of all your assets and debts, your current income and expenses, tax returns and other documents related to your financial status, including contracts like leases that might be in play.

You’ll also be required to go through credit counseling after your bankruptcy is filed, and submit a certificate that you did so—if you work with a bankruptcy attorney, they usually help facilitate this.

Most creditor activities against you, such as lawsuits, foreclosures and wage garnishments, must be halted as soon as you file the petition and the creditor finds out about it. This is known as the automatic stay.

Within a few weeks, the bankruptcy trustee holds what is called a meeting of creditors. This is a hearing you must attend. You are placed under oath and the trustee, along with any present creditors, asks you questions. The trustee uses this information to determine whether you have any non-exempt assets or transactions that can be reversed. 

The trustee is looking to see if s/he can obtain any money for your creditors. The trustee is also looking to insure that debtors are truthful and fully disclosing of their situation. 

Once the case proceeds past this point, your debts are discharged as agreed upon after liquidation of non-exempt assets (if any) occurs and funds are disbursed to various creditors by the trustee. Some of your assets are protected by exclusions, including certain personal items and clothing.

You may also be able to keep a vehicle for the purpose of travel to and from work as well as your home, depending on how much equity you have in it.

Eligibility Rules

Eligibility for Chapter 7 bankruptcy depends on income and the application of a means test.

You may be eligible for a Chapter 7 filing if you pass the rigorous requirements of the means test, a test which looks at your income for the last six months, your family size, and other items, and compares you to other persons of the same family size in your area to determine whether you qualify.

Unsecured debt refers to debt that isn’t secured by property. Vehicle and home loans are secured by property, meaning the bank can take that property if you don’t pay to mitigate some of their losses. Credit cards are not usually secured, but may be in some instances. Priority unsecured debt refers to amounts you owe on taxes or child support.

Nonpriority unsecured debts are items such as credit card debt, personal loans and medical debt.

This is a lot of information, and it does sometimes get complex. But the bottom line is that if you have too much income, you may not be able to file Chapter 7. That’s because the court assumes you have enough income to pay at least some of your creditors.

Pros

If you qualify for Chapter 7, it can help you start fresh with debt. In some circumstances, you may leave the bankruptcy with no debt at all. It’s also faster than other forms of bankruptcy because there’s no repayment plan period.

Cons

Chapter 7 is looked at by future creditors as worse than Chapter 13 because it shows no effort to make any payment on debt owned. The Chapter 7 negative listing on your credit report will also show up for 10 years after you file the petition.

What Is Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy is a restructuring plan. You work through the bankruptcy trustee to pay some, but usually not all, of your debts over three to five years. If you meet all the requirements of the plan, your remaining debt may be discharged at the end of the bankruptcy.

How It Works

Many of the processes associated with filing a Chapter 13 bankruptcy are the same as when you file a Chapter 7 bankruptcy. You take the pre-filing credit counseling course, file the petition, an automatic stay goes into place, you attend the meeting of creditors and then you work with the trustee via your attorney to make the appropriate payments every month.

You pay the trustee as dictated by your bankruptcy plan.  Once the plan is approved by the court, the trustee then disburses that money to your creditors. If you miss your Chapter 13 bankruptcy payments, the trustee can file a motion to dismiss your case, and you would then owe all the debts and creditors could begin collections actions against you again.

Once you complete the Chapter 13 bankruptcy repayment plan, you are typically entitled to a discharge of all remaining debts under the bankruptcy.

Eligibility Rules

Eligibility for Chapter 13 bankruptcy depends on the amount of your debts as well as your ability to make payments as planned in your repayment plan.

  • Unsecured debts must be less than $ 419,275. (As on October, 2020 –this number increases periodically with inflation.)
  • Secured debts, including any mortgages, must be less than $1,257.850. (As of October, 2020 –this number increases periodically with inflation.)
  • For your repayment plan to be confirmed, the trustee has to deem it possible for you to make the payments. If, for example, you agree to make a payment that totals your monthly income and leaves no room for living expenses, the trustee is likely to reject the plan.

Pros

Chapter 13 bankruptcy stays on your credit for less time than a Chapter 7—up to seven years from the filing date. Future creditors might also look more favorably upon it because it shows that you made some effort to repay debts. In a Chapter 13, you are typically able to keep all your belongings and don’t have to liquidate them.

Cons

You do have to make some payments toward debts, which can mean a hefty monthly payment to the trustee. You also agree to submit certain financial decisions, such as whether you take on new debt, to the court during the repayment plan.

Which Kind of Bankruptcy Is Best for Me?

Chapter 7 may be a good choice if your income is low or if you are struggling to make any payment on debts. Chapter 13 may be the right choice if you do have some ability to pay but you’re simply overwhelmed with your current debt load.

The decision can be complex, so it’s important to consult a bankruptcy attorney to find out what your options are and what might be right for you.

How Do I Apply for Bankruptcy?

You apply for a bankruptcy by filing a bankruptcy petition. You can file on your own or through an attorney.

How Does Bankruptcy Affect My Credit?

Depending on how you file, bankruptcy stays on your credit report for up to seven to 10 years. Bankruptcy appears on your credit report as a negative public record item, and it can bring your score down substantially. How much your score drops depends on what it was before you entered bankruptcy and other factors, but it’s typically enough to drop you down to a different range—such as moving you from good to fair or poor credit.

Typically, by the time someone makes the decision to file for bankruptcy, their credit score is already suffering because of late payments or delinquent accounts in collections. A bankruptcy is a big hit, but it’s not a death knell for your good credit. In fact, if you’re responsible with debt following your bankruptcy, you can work toward a better credit future.

It’s a good idea to keep an eye on your credit as you move through the bankruptcy process. Address inaccurate information as soon as possible to keep your score from dropping any lower. Find out more about Lexington Law credit repair services and how they might help you continue to positively impact your credit as you move past your bankruptcy.


Reviewed by Vince R. Mayr, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Vince has considerable expertise in the field of bankruptcy law. He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

Do I need a consumer statement on my credit report?

If you’ve experienced financial distress or want to highlight errors on your report, a consumer statement may be used to explain derogatory credit information to credit bureaus and/or potential lenders. While these statements won’t hide negative credit histories, they may help answer some questions on your report to eliminate concern and give a lender the clarity they need to extend you a line of credit or loan. 

If you’re wondering if adding a consumer statement to your credit report is right for you, read on as we outline exactly what a consumer statement is and a few instances where you may need one.

What Is a Consumer Statement? 

A consumer statement is a 100-word statement (200 words for residents of Maine) that can be added to your credit report to address any negative information shown in your credit history. Once placed, potential lenders may review this statement to help clear up any concern they have about your creditworthiness or ability to pay back a loan. 

A consumer statement should clearly explain any negative history or discrepancies on your credit report. See an example of a consumer statement below: 

“On March 30, 2020, I was laid off from work as a result of the coronavirus pandemic and related shutdowns. Due to this unexpected job loss, I fell behind on my monthly debt payments. I found employment on May 12, 2020, and I am working to catch up on all missed payments. While my credit rating was in good standing before losing my job, I believe these late payments associated with [name of creditor] account are not a true reflection of my creditworthiness.” 

Once a consumer statement has been added to your credit report, it will be visible to a lender or creditor each time they view your credit report. Once the financial situation on your consumer report has been straightened out, you can elect to remove the consumer statement so it no longer shows up on your report. 

Where does a consumer statement go? A consumer statement can be found on your credit report under your personal information.

When to Add a Consumer Statement to Your Credit Report

There are a few reasons why you may consider adding a consumer statement to your report: to provide context for derogatory information on your credit report or to dispute any errors that may be negatively impacting your credit. There are two basic types of consumer statements that can be added to an individual’s credit report: 

General Consumer Statements

These are used to provide background information on your entire credit report, and they can stay on your report for up to two years. An example of when to add a general consumer statement on your report might be after an instance of identity theft or financial hardship as a result of an illness. 

Account-Specific Statements

These statements apply to individual accounts and can be used to explain items that may be negatively impacting your credit report. Account-specific statements can remain on your credit report until the accounts they’re associated with are removed. An instance where someone might include an account-specific statement on their report might be to address a late payment that was made due to a mailing or shipping delay. 

When should I include a consumer statement on my credit report? General consumer statements include identity theft, delinquency on multiple accounts as a result of extended unemployment, delinquency due to natural or declared disaster or financial hardship due to illness or injury. Account specific statements could include response to fraud, a problem with a lender or a dispute on your credit report that was denied.

Frequently Asked Questions About Consumer Statements 

How Do I Add a Statement to My Report? 

If you’d like to add a consumer statement to your report, you can do so free of charge. You’ll need to write a 100-word statement (200 words in Maine) and submit it to your preferred credit bureau. You can do this by sending a letter along with your statement to their address or submit your consumer statement online. You’ll need to look online or call your credit bureau of choice for instructions on how to add a consumer statement to your report, as each bureau may have its own guidelines.

Does a Consumer Statement Hurt My Credit Score? 

A consumer statement will not change any accurately reported information on your credit report and is unlikely to impact your scores. However, providing an explanation for your financial distress or poor credit history may help a creditor or lender better evaluate your creditworthiness or ability to make payments on time. 

Can I Remove a Consumer Statement? 

If your credit history or financial situation has improved, you can elect to remove a consumer statement so that lenders and creditors can’t see it on your credit report anymore. It’s best to remove a consumer statement as soon as it is no longer necessary, as it may notify potential lenders that you had a negative credit history in the past and could be a cause for concern when evaluating your creditworthiness. Typically, you can request a removal in the same way you submitted your consumer statement to the bureau. If you have any questions, contact the credit bureau directly. 

For more insight on ways to improve your creditworthiness, contact us today for a free personalized credit consultation.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com