Hope your week has been a good one. Most money choices take a few minutes to make and decades to play out. Today’s issue is about the decisions where timing does the most work, and what waiting could cost you.
On the money today:
Suze Orman’s 2027 to-do list has just two items
Wait or claim now? Starting Social Security at 62 means a check 30% smaller for life, yet it’s still the most common age
Your retirement tax bill may hinge on one choice most Americans skip
Let's get into it.
BEHIND THE HEADLINE
Retirement savings are taxed when the money goes in or when it comes out
Money you save for retirement is taxed either when it goes in or when it comes out. Pay tax when it goes in and there’s no tax break today, but qualifying withdrawals are tax-free and never forced. Pay tax when it comes out and you get the tax break today, but withdrawals are taxed as income and required at 73 or 75. Our Must Read covers the one move that decides which side you’re on.
What’s the best tax decision you’ve made with your retirement savings, or the one you’d most like to take back? Hit reply and tell us what happened and what it taught you. Your story may be featured in a future issue
RETIREMENT
Suze Orman challenges Americans to ‘dig deep’ and make 2 massive money moves in 2027 — and the payoff could be enormous
Orman’s case comes down to timing. Caring for aging parents, helping grown kids or a career that takes a turn can all shrink what you’re able to put away later, and AI is one disruptor she points to. The easiest time to save more is before any of that happens.
Why it matters: Even a small bump in what you set aside adds up when it has time to work. An extra $874 a year grows to about $86,000 over 25 years and $387,711 over 40, assuming a 10% average annual return.
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NEWS
Here’s the big reason US seniors are claiming Social Security early — should you do it too?
You’ve probably heard the advice to wait as long as possible, yet only about one in 10 non-retired Americans plans to hold out until 70. The reason has less to do with Social Security itself than with a gap in how most people fund retirement. It’s worth understanding before you choose your own claiming age.
Why it matters: Schroders found that almost half of Americans say they need the income now, the main reason they plan to claim early, and that 51% of retirees have no strategy for turning savings into income. Knowing where your own plan stands before you pick an age is worth a few minutes.
MUST READ
How a single move could slash your taxes in retirement — but just 18% of Americans are doing it. Are you missing out?
Taxes don’t stop when you retire. Money you take out of most retirement savings is taxed as income. There’s a way to save where qualifying withdrawals later aren’t taxed at all, and fewer than one in five Americans saving through a workplace plan are doing it. There are a few rules to know first, including an income limit and a five-year waiting period.
Real estate is another way to keep more of what you earn. Rental properties can come with tax deductions and potentially lower tax rates on the profit when you sell than on regular income.
If you’d rather not own a rental yourself, Arrived lets you invest in shares of rental homes and vacation rentals from as little as $100. It’s backed by investors including Jeff Bezos, with no tenants to find and no faucets to fix.
Why it matters: Starting at 73 or 75, the IRS makes you take money out of most retirement savings whether you need it or not, and every dollar is taxed as income. Planning for that bill before your first withdrawal gives you more say over how big it gets.
MONEY IQ
According to the SSA, what share of unmarried Americans 65 and older get 90% or more of their income from Social Security?
ALSO MAKING THE ROUNDS TODAY
The standard deduction for married couples climbs $1,000 to $33,200 in 2027, and retirees 65 and older have a new $6,000 deduction to claim next spring, so check whether your income qualifies before you file
If you were married at least 10 years before a divorce, your ex can claim Social Security on your record without you being notified, and it doesn’t reduce your own benefit by a dollar
A city with real winters beat Florida for No. 1 on U.S. News’s list of best places to retire, with a median home price of $206,176 against $359,870 nationally, and its state no longer taxes Social Security income or pensions
Warren Buffett says to let your grown kids read your will before you sign it, and with 68% of parents never telling their children what they’ll inherit, his reasons for doing it are worth a look
MONEY IQ ANSWER: HOW DID YOU DO?
The correct answer is C) 43%. SSA data show 43% of unmarried people 65 and older live almost entirely on the check, against 21% of married couples. When the check is nearly everything, the age you start it matters more.
That's a wrap for today! Before you go, we'd love to know what you thought of today's newsletter. Hit REPLY if you have more to share — we read every one.
See you soon with another quick roundup of the financial news that matters.
