bankruptcy and retirement Archives

SECURE 2.0 Helps Lighten the Burden of Student Loans

Posted on April 10, 2024by Admin

A recently enacted piece of legislations allows employers to “match” any payments their employees make towards their student loan debt, with tax-advantaged contributions to their retirement accounts. This includes retirement savings plans like 401(k), 403(b), IRA, and Roth accounts.

SECURE 2.0 Act has brought about substantial changes to the retirement account rules in the United States. Its primary objective is to encourage more workers to save for retirement.

Student loan debt remains a burden for many people in America. The nation’s collective student loan debt is roughly $1.73 trillion, according to the Federal Reserve. Borrowers pay between $200 and $299 monthly toward student loans, on average.

A recent survey found that more than nine in ten young adults who continued with education after high school faced stress over money and finances that affected their physical and mental wellness. Of that group, 86% said student loans were a contributor to that stress. Nearly half said this debt impacted the amount of money they were able to contribute to retirement.

Putting off saving for retirement can have long-term consequences. Just $10,000 contributed at age 25 grows into more than $100,000 by age 65, assuming a 6% annual return. Waiting until age 35 to set aside that money drives the total return at age 65 to just $57,000.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Law

Mistakes to Avoid if You are a Senior Filing for Bankruptcy in Florida

Posted on January 7, 2020by Admin

More seniors are filing for bankruptcy than ever before, which has been the result of a number of factors including rising healthcare costs, lack of retirement savings and less social security. Between the years 2013 and 2016, approximately one in every eight bankruptcy cases were filed by individuals who were older than 65. Twenty-one percent of those filing for bankruptcy were between the ages of 55 and 64.

The following mistakes were made by individuals in this age group as they attempted to explore options to avoid filing for bankruptcy.

Bankruptcy Law, Debt Relief

More than 50% of Americans Have Raided Their Retirement Savings Early

Posted on September 17, 2019by Admin

When someone is facing a difficult financial situation, it can be tempting to pull money from whatever resources are readily available. Many consumers feel they have no choice but to dip into their retirement savings to pay for financial emergencies or unexpected expenses. In fact, according to a recent study published by Magnify Money, more than half of all Americans have withdrawn money from their retirement savings early.

Twenty-three percent of those surveyed stated that they did so to pay off debt. Another 17 percent used this money to put a down payment on a home, while 11 percent used the money to pay for education costs. Nine percent surveyed reported using money from their retirement savings to pay down medical debt.

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

The Best Ways to Pay Off Credit Card Debt In Retirement

Posted on April 22, 2019by Admin

When someone is entering retirement, the last thing that person wants to deal with is mounds of credit card debt. For the most part, retirees are living on a fixed or limited income, which means they have very few financial resources to pay off any lingering debt they may be carrying.

A fixed income also means there is little ability to handle any unexpected financial crises, which can include a costly home repair or medical expense. In the event the unexpected happens, some retirees are forced to rely on credit cards or personal loans to cover the costs. The interest on a personal loan or a single missed credit card payment, can cause the debt to spiral out of control quickly.

Here are some debt payoff tips for seniors struggling with credit card debt.

Refinance your debt.

One possible way to pay off a large amount of credit card debt is through refinancing or consolidation of the credit card debt. This payment could be made through a home equity line of credit (HELOC) if you own your home and hold a good amount of equity in it. A HELOC carries a lower interest rate than other methods of consolidating or refinancing debt since it is attached to collateral and is a secured loan.

Credit card debt can also be paid by consolidating all cards into one card through a balance transfer. By doing a transfer, the cardholder can attack one, larger debt, rather than pay minimum payments on multiple cards every month. However, these transfers normally come with a promotional period which means the cardholder can only benefit from the zero or low interest rate for a set period. After that time period expires, the cardholder will soon find his or her rates increase significantly.

Examine your budget.

Paying off your credit card debt can be nearly impossible, if you do not establish a set budget. By putting together a list of necessary expenses and reviewing what purchasing habits put you into debt, you cannot cut unnecessary expenses and free up money to go towards your credit card debt. It is also recommended that you avoid using your credit cards during this time period when you are working on paying off outstanding balances.

Target the card with the highest interest rate.

If debt consolidation is not a possibility and you are struggling to pay multiple credit cards, one method that is recommended is to focus on paying one card at a time. This method does take time and patience, but it can be successful. Look at what credit cards you have and list what interest rate is on each card. Take the card that has the highest interest rate and throw whatever extra money you may have towards that card first, while continuing the minimum monthly payments on the other cards. Once that card is paid, then focus on the credit card with the next highest interest rate and so on, until all cards are paid in full.

Work a part-time job.

Retirement does not always mean that you will never hold another job. In fact, many retired individuals choose to take a part-time job not only to earn some extra money, but to socialize and be out with people. Many retirees find a great deal of success in part-time consulting or freelance work after retiring from a long-term professional career.

For seniors struggling with insurmountable debt, help is here. Do spend your golden years being hounded by creditors. Credit card debt is one of the most common problems we see facing those with serious financial issues. The stress can become compounded with collection calls and the threat of lawsuits. Bankruptcy not only gives people a financial fresh start, but it is a powerful tool that can be used to protect valuable assets, including property, vehicles and retirement savings.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Source: https://www.theladders.com/career-advice/5-ways-retirees-can-tackle-their-credit-card-debt

Bankruptcy Law

Bankruptcy and Retirement: How to Assess Your Risk

Posted on October 10, 2018by Admin

Many Americans work their whole lives in the hopes of achieving the American Dream: retiring comfortably and living out their last years in rest and relaxation. However, if you are living with debt and nearing retirement, the dream can seem far off. In recent years, seniors have seen a rise in personal debt.

A study published by the Consumer Bankruptcy Project shows a trend regarding bankruptcy and retirement. It showed that more older Americans are filing bankruptcy before entering retirement. The data showed that bankruptcy rates went down for individuals between the ages of 18 and 54 between the years 1991 to 2016. However, the percentage of individuals between the ages of 65 and 74 tripled. The rates went up four times for individuals over the age of 75.

Seniors are realizing that they can protect valuable assets through bankruptcy. Retirement income and savings are out of reach and protected under federal law, including: 401(k)’s, pensions, social security payments, qualified profit-sharing plans, and individual retirement accounts worth up to $1.245 million are all exempt from creditors during bankruptcy.

Rising healthcare costs have attributed to many of the filings. Chapter 7 bankruptcy wipes out medical debt and there is no limit to the amount of medical debt you can discharge in Chapter 7 bankruptcy. According to the Bureau of Labor Statistics, the average person who is the ages of 65 and over spends more than $6,620 annually on healthcare. One recommendation to help save for unexpected healthcare costs is a Health Savings Account (HSA). Contributions to an HSA are pre-tax, and there are no tax penalties made on withdrawals, so long as they are for qualified medical expenses.

Another recommendation for retirement planning is to make what are known as catch-up contributions to your retirement accounts, if you are able to. You are allowed to make extra contributions to 401(k) or IRA plans after the age of 50. The current annual amount allowed is an extra $5,000 for 401(k) plans and $1,000 for IRAs for the 2018 tax year.

As you reach retirement age, plans do change, which means the budget you created for retirement may need adjusting. It is important that you work closely with a financial advisor to keep up with the cost of living and make appropriate changes in your investments in preparation for retirement.