The Great Middle Class

Written by Stephen Dart | 09 May 2013

I grew up moving around the country and, one time, the world. Whether I was living in a west coast suburb, a midwestern small city, an air force base in Japan or a big Texas city, I always felt like I belonged. Well, at least belonged as much as a kid or a teenager ever feels like he belongs.

A big part of why I felt the way I did was because I always thought of my family as middle-class. That was a good thing. We were never close to being the wealthiest or the poorest family where we lived. We were nicely in the middle with most everyone else.

I also felt, maybe subconsciously, we were moving up. My dad was moving up in his career, my mom was forever expanding what she was managing and my sister and I were progressing through school. We had enough to eat, a roof over our heads and the sky was the limit. That was a nice place to be.

Is all that possible today, in the United States? Why is the concept of an expansive middle-class important? Is mobility between classes and within classes still possible? James Fallows has some brief thoughts to make you think about this topic at the National Journal website.

Retirement Income Strategy: Retirement Accounts and Social Security Benefits

Written by Rick Bryan | 02 May 2013

When it comes to income sources during your retirement period, what should come first: making withdrawals from an IRA or claiming Social Security benefits early? 

Many people approaching Social Security eligibility believe that tapping IRA assets should always be the last source of retirement income, even if it means claiming Social Security benefits before Full Retirement Age ("FRA" is age 66 and older). On a gut level, this seems completely logical – if you take Social Security benefits early in retirement, it will reduce the pressure of using IRA assets for near term retirement income. The long term growth on the IRA assets and deferred taxes on withdrawals must outweigh a lifetime of reduced Social Security benefits, right?

Well, not always. For some retirees, tapping your IRA early in retirement and deferring Social Security benefits until Full Retirement Age (or beyond) might be the wisest lifetime strategy. 

To learn a little more about the taxation of IRA withdrawals and Social Security income, the April 2013 edition of Kiplinger's Retirement Report has an interesting and informative article: Tap an IRA Early, Delay Social Security.

Retirement income strategy can be complicated and shouldn't be overly generalized, we recommend initiating a conversation with your financial planner to discuss your particular situation. 

Getting Ahead of the College Savings Scramble

Written by Mitch Conlon | 25 April 2013

It’s that time of year again. High school seniors are stalking the mailman, awaiting acceptance letters from the college of their dreams.  

For the college-bound, this is a stressful period. Parents are equally stressed, wondering if acceptance letters include grants, scholarships or other incentives. Financial details matter when the choice is between a solid state school priced at $18,000 per year and $50,000 plus for a top private school.

A recent study suggests that parents will need to sock away nearly $600 per month to put a newborn through an average private university. Saving early and laying out financial parameters for teens is an important, but complicated undertaking. For parents and grandparents hoping to get a jump on the funding process, please see Save for college without going on game shows.