Random financial topics from my latest newsletter
Cartoon – I saw this cartoon in the New York Times and thought it was pretty funny
Health Expense Quiz – Fidelity Investments released a study on how much a 65 year old couple retiring today will need to pay for future health care costs. This is out of pocket expenses not counting what is covered by Medicare. Do you want to take a guess on what Fidelity things you’ll need to cover your expenses?
Answer: 3) $250,000 Luckily it’s not $500,000 but most people do not have $250,000 allocated for future health care costs. The $250,000 estimate includes the cost of deductibles and copayments, premiums for optional coverage for doctor visits and prescription drugs, out of pocket expenses for prescription drugs, and other expenses that Medicare doesn’t cover, such as hearing aids and eyeglasses.
The Marriage Penalty is when married couples are penalized by paying more tax on a joint tax return than they would if they file tax returns individually. Married couples filing jointly have different tax brackets than single persons; this can work to the advantage of couples with highly disparate income and single income households; however it can work to the disadvantage of couples with roughly the same income. A pretty cool calculator to see if you are paying more taxes by filing jointly is one from the Tax Policy Center. http://taxpolicycenter.org/taxfacts/marriagepenaltycalculator.cfm
The Cost of College is growing faster than inflation and now many students find it difficult to go to college without some type of loan financing. Heather Boushey, an economist for the Center for Economic Policy wrote that “In 1981, a student could work full time all summer at minimum wage and earn about two thirds of their college cost for the year. Today a student earning minimum wage would have to work full time for a year to afford one year of education, at a public university, and that assumes she saves every penny.”