Category: Retirement Plan

The bankruptcy trustee and the couple’s creditors argued against the exemption, saying that the money in the inherited IRA was not considered “retirement funds.” The matter eventually went before the Supreme Court, where Justice Sonia Sotomayor illustrated three differences between traditional IRA holders and inherited IRA holders:

If you file for benefits at full retirement age and continue working, Social Security will not reduce your monthly benefit. But if you file early (before full retirement age) and continue to work, your monthly benefit will be permanently reduced. And that amount will be further reduced if you earn more than the annual “earnings test,” or threshold, which is $14,460 in 2012. Until the year you reach full retirement age, Social Security withholds $1 for every $2 earned above the year’s threshold until you reach full retirement age.

Most retirees’ goals are to enjoy retirement, with such methods as travel, entertainment, and spending time with the children and grandchildren. This is what retirees want, rather than worrying about having enough money available for home healthcare or assisted living if needed, without the fear of running out of money, losing a majority over night in the stock market, or worse, leaving a spouse impoverished due to a skilled care event (the cost of which averages $10,000.00 per month).