Mailbag: Student Loans, Unemployment Taxes, and Couples Planning

Today’s Wisdom:

This year has led to some unique financial planning conversations so it’s no surprise that we’ve gotten a lot of questions. Let’s take this episode of the podcast to get to three topics that listeners have asked about that others are likely facing as well.

Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.

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What You’ll Learn:

There have been more than enough challenges for people this year, but there are also opportunities available thanks to assistance and relief provided by the government. With so much happening in 2020, we’ve spent a lot of time with clients and prospective clients on issues that wouldn’t come up most years.

This episode of the Money Wisdom podcast is a small reflection of that. We received a few questions from listeners that we wanted to tackle on the show and a couple of these are definitely unique to the times.

Paying off student loans

Now, this is something most families are dealing with now as they work towards retirement, but there’s a chance this year to get relief. We received a question from someone with $16K left on student loans and has the money to pay it all off. But with interest suspended along with payments, there’s no need to pay it off right now. You can take that money and put it somewhere where it will gain a little interest.

We are talking all the time with clients about taking advantage of programs that are being offered right now. Don’t leave money on the table if it’s available to you. You can use that extra money to donate or help others if you’d like.

Taxes on Unemployment

Unemployment benefits have been claimed in huge numbers as a result of millions of Americans have been furloughed or laid off this year. On top of that, the benefits were increased for a period of time to help those dealing with pandemic strains.  In general, unemployment benefits are taxable benefits so you need to be ready to pay taxes.

You should also consider making an estimated tax payment by January 15 because you’ll be better off. There’s always a chance that Congress could waive taxes on those benefits with everything going on, but that would still come back to you as a refund if you make that estimated payment.

Getting Your Spouse Involved

The last question we tackle on the show today comes from someone that handles the finances in their household. As retirement approaches, they wanted to know if they should make their partner get involved. Joel points out that it’s a very good idea to do that to some extent. They don’t need to know all the intricacies of investing, but they should know where the money is along with other considerations. That’s also the benefit of our Money Map process because we work with couples all the time to lay out a clear plan for their retirement.

Those are the three topics you’ll hear more about on the show so check it out in the audio player above and use the timestamps to skip to specific topics.

[2:57] – Mailbag Question #1: I have $16k remaining on a student loan for my daughter. I can pay it off but it’s currently not accruing any interest and payments are temporarily suspended because of the pandemic. Should I just let it sit there for now?

[5:14] – Mailbag Question #2: I was furloughed for about 4 months this year. I received unemployment during that time and I just realized I didn’t have taxes withheld from it. Will I have to pay penalties on this?

[7:38] – Mailbag Question #3: My husband isn’t great with money so I handle all the bills and the decisions for our retirement accounts. As we get closer to retirement, should I make him get more involved?

Thanks for listening to this episode. We’ll be back again next week for another show.

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Final Thoughts:

“Investing, financial planning, investment strategy, insurance, unemployment, taxes, student loans, couples planning, retirement, income planning.”

– Joel Johnson, Money Wisdom Podcast

3 Related Items & Resources:

Money Map Retirement Review

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Introduce A Friend

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