Meet The Axiom®’s Guest Editor: Jack Hauser, CFP®

I’m Jack Hauser, a Data Analyst at Annex Wealth Management.

I grew up just a couple of miles from our Elm Grove office and graduated from Marquette University High School in 2010. I’m fortunate enough to be back living in the Greater Milwaukee Area since graduating from the University of Wisconsin. I even live close enough to our office that I walk to work daily.

When I’m not working with numbers at Annex I love playing Euchre, cheering on the Badgers, and spending time with family in Door County. I have an older sister, Annie, who is expecting twin baby boys with her husband, Keegan, this Spring and I couldn’t be more ecstatic to become an uncle (as a first time uncle – I promise to give gifts that are a lot cooler than government savings bonds). 

“I find the polls riveting because of the distribution of responses. It fascinates me seeing the summaries where the responses all seem clustered together or where they are spread more evenly.”

– Guest Editor, Jack Hauser, CFP® | Data Analyst 

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Do You Have Enough Money Saved If You Are Planning On Retiring Early?

For this week’s poll, we asked readers who are planning on retiring early about the amount of money they’ve saved. 

A recent study found that around 830,000 people are expected to retire early due to the recent COVID-19 pandemic, sudden job changes, and potential health risks. Some people saw the pandemic as the perfect time to retire early with the necessary funds and plans in place, while some were forced to retire due to sudden furloughs or unemployment. 

According to our poll results, 67% of respondents said that they have saved enough money for early retirement. There was a group of 21% of respondents that were not sure, and the smallest group of 12% responded that they do not have enough money saved.   

Early retirement planning and saving can be difficult, especially during unprecedented times. Experts recommend starting early, creating a goal date or age, learning about you and your spouse’s Social Security benefits, setting realistic monthly budgets, and much more.  

Have questions about saving or planning for early retirement? Annex can help. Annex Wealth Management provides investment and retirement planning, tax planning, and estate planning, and is a full-service wealth management experience from a fee-only fiduciary. Head to AnnexWealth.com and click the Get Started button. 

This week’s Ask Annex comes from Barb, who asks:

“Will I have to give back some of the stimulus check if our income is above $150,000?”

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Annex Wealth Management’s Mark Strey, CFP®, CMFC® responded to Barb’s request:

Dear Barb,

Your stimulus check isn’t “income,” according to the law and the IRS. Instead, it’s simply an advance payment of a tax credit. And tax credits aren’t taxable income.

To clarify the difference between “income” and “advance payment,” the IRS website (irs.gov) refers to “stimulus checks” as an “Economic Income Payment.”

IRS.gov puts it this way, “The Payment is not includible in your gross income.  Therefore, you will not include the Payment in your taxable income on your Federal income tax return or pay income tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.”

In terms of “paying back” your Economic Income Payment, no, there is no provision in the law that would require individuals who qualify for a Payment based on their 2018 or 2019 tax returns to pay back all or part of the payment, if based on the information reported on their 2020 tax returns, they no longer qualify for that amount or would qualify for a lesser amount.

For example, you received $500 for your child who, based on your 2018 or 2019 tax return, met the qualifying child requirements. That child turned 17 in 2020 and no longer meets the qualifying child requirements. You will not be required to pay back the $500.

Or, for example, you received $500 for your child whom you claimed on your 2018 or 2019 tax return. You do not claim the child on your 2020 tax return because the child’s other parent claims the child. You will not be required to pay back the $500 even if the child’s other parent claims $500 for the same child on his or her 2020 tax return.

Keep Notice 1444, Your Economic Impact Payment, with your 2020 tax records. The IRS will mail Notice 1444 to your last known address within 15 days after the Payment is made.

For more information, visit IRS.gov or give us a call so we can talk it all through.

Sincerely,

Mark, CFP®, CMFC® | Wealth Manager