MY CONTENTION: ONE of the most egregious parts of the tax code is the stealth tax on Social Security benefits. To be sure, if your income is low enough, your benefits won’t be taxed. But around 56% of retired Americans pay taxes on up to 85% of their Social Security benefits. And the number grows each year. Incomes rise, if only because of inflation-driven increases, and yet the thresholds for taxing benefits have never been adjusted for inflation or wage growth. Adding insult to injury, 11 states currently tax Social Security benefits. Today, if you’re an individual filer with a combined income between $25,000 and $34,000, up to half of your Social Security benefit will be taxable on your federal tax return. If your combined income is above $34,000, up to 85% of your benefits may be taxed. Meanwhile, if you’re married filing jointly and have a combined income of $32,000 to $44,000, up to half of your benefits will be taxable. If your combined income is above $44,000, up to 85% will be taxed. Combined income includes your adjusted gross income, municipal bond interest and half of your Social Security benefit. Who came up with that cockamamie definition of income? When the tax on benefits was introduced in 1984, it only applied to 50% of benefits. Because of further tax hikes introduced in 1993, up to 85% of benefits can now be taxable. So, let me get this right: No tax was fair before 1984, taxing 50% was fair for the next decade and now 85% is justified. Makes total sense, right? Apparently, ignoring inflation is also fair. The $25,000 threshold for individuals and $32,000 for joint filers would rise to $73,000 and $93,200, respectively, if they were adjusted for the inflation since 1984, according to a USA Today article. Result: A tax, which once hit just 10% of retirees, now affects more than half of seniors. When you consider that other tax items—such as federal tax brackets, contributions to retirement accounts and the standard deduction—are adjusted annually, it all seems ridiculous. Currently, there are bills in Congress called You Earned it, You Keep It and The Senior Citizens Tax Elimination Act, written by a Democrat and a Republican, respectively. Both would remove Social Security benefits from the calculation of gross earnings for income tax purposes. [xyz-ihs snippet="Mobile-Subscribe"] But don’t expect either bill to be acted upon, given Social Security’s looming funding crisis. Remember, we’re looking at potential Social Security cuts of 25% in the early 2030s if Congress doesn’t take action. Overhauling Social Security would require bipartisan support. With a divided Congress, there seems little hope. Meanwhile, seniors are getting squeezed by inflation. Yes, Social Security’s cost-of-living adjustment (COLA) for 2023 was the highest since 1981. Problem is, there’s a weakness in the COLA, which is measured by a version of the Consumer Price Index known as CPI-W. It doesn’t accurately reflect the different spending habits of seniors. A study by The Senior Citizens League, a nonpartisan advocacy group, found sharp cost increases for seniors since early 2000: Out-of-pocket prescription drug costs climbed an average 311%, from $1,102 to $4,524. Out-of-pocket dental care costs rose an average 275%, from $286 to $1,073. Monthly Medicare Part B premiums increased 262%, from $45.50 to $164.90. The Senior Citizens League found that the goods and services bought by the typical retiree rose 141% over this period, while Social Security benefits climbed just 78%. And don’t expect relief anytime soon. Social Security’s COLA adjustment for 2024 won’t be anywhere near this year’s 8.7%. In fact, the COLA for 2024 could be below 3%. Inflation hit a 40-year high in June 2022, but it’s now easing in some categories. Still, groceries are continuing to see rapid price increases. Middle- and lower-income retirees—whose budgets are already stretched—will be hit hard, spending more on necessities while losing more of their Social Security benefits to taxes. The bottom line: Even without actual cuts, benefits are shrinking. Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie's earlier articles. [xyz-ihs snippet="Donate"]

You can’t put 10 pounds of potatoes in a 5 pound bag, but all my life  I gave it a good try, and had a lot of interesting life experiences. I thought of ideas for a small, part time business venture that might provide a new opportunity to explore my creativity, with a flexible work schedule. I got my chance— a neighbor invited me to a home demonstration party she hosted for a Beauty Consultant who sold cosmetic products.  I found it interesting and something I might have a natural  affinity for.  I was self-motivated and enjoyed meeting people. The products emphasized skin care with a complement of a few basic make up items. They were quality products, attractively packaged and priced at an affordable mid-price range. But little did I realize I had wandered into a field known as Direct Sales. Of course I wasn’t aware of all the pitfalls—you don’t hear much about those, and sometimes it’s best not to hear.  Would any of us embark on anything if we knew what hurdles we would have to overcome? The company, however, provided you with high level training and unlimited support.  They had a successful business model and I  learned from other consultants who  were kind, respectful, and helpful.  All I had to do was sell. Figuring it all out was the challenge, especially for someone who never sold anything before. A common mantra was “fake it ‘till you make it.” I had my own little business; started with low investment capital, mainly to pay for my own inventory.  Customers sampled products, got individualized attention, and went home entertained, enlightened and satisfied. I  never touched the women who participated in the demonstrations but would walk them through giving themselves an actual facial.  They loved it. It was an age thing too.  My most enthusiastic customers were around 40 years old—the age the first lines around the eyes begin to appear and aging becomes a reality.  Care of the skin becomes a priority. Meanwhile, finding hostesses for the demonstrations was an ongoing quest. I had to be inventive there.  I developed several methods to assure enough bookings and I put everything I had into a given session.  Since my best candidates came from women at the presentation, I took advantage of the captive audience. No matter the product or service, selling is selling—but first you have to sell yourself.  Everything depends on your resourcefulness.  A prospective hostess would size you up and decide if you were someone they would invite into their homes to meet their friends in an intimate setting. I achieved a level of success and especially enjoyed the fellowship among the consultants.  But real success requires hard work and building networking relationships.  The real money was in recruiting  and training new consultants for which you received additional compensation, but that also required more time, effort and attention. The demonstrations were held at night.  I  had to be on my toes at all times, never wavering in any aspect of product knowledge, and confident in my delivery.  Putting it all together required longer hours than I had anticipated.  I wasn’t making very much money.  But I gave it everything I had.  I learned to overcome obstacles and increased my level of comfort in speaking to a group. Nothing, however, remains stagnant.  You either forge ahead and advance your position, or assess the future.  And my reality was that it was encroaching on my obligations at home—everything came in second to that. Once you decide something is not really for you, the endgame begins. But I learned so much about the psychology of selling and human behavior, and met many interesting people who invited me into their homes, trusted and befriended me. It was a positive experience which added to my personal development and provided invaluable insight in how to engage positively with others. I learned so much about selling and marketing skills. And I had some memorable adventures along the way—no regrets—But no Mary Kay pink Cadillac.

MANY OF THE WEALTHY people I’ve studied were extremely frugal—to the point of eccentricity. Why is it that when rich folks are tightfisted, people call them eccentric, but—if you aren’t rich—people tag you as cheap? New Jersey Bell Telephone Co., now called Verizon, used to have small inserts with its bills that highlighted persons of note who had a connection to the state, whether they were natives or had resided there at some point, such as Thomas Edison. One of the inserts told of Henrietta “Hetty” Green, better known as “The Witch of Wall Street.” Green was a familiar figure on Wall Street, with her all-black garb, including dress, cape, bonnet and well-worn black satchel, which was how she earned that epithet. She was America’s first female tycoon, although today not many people have heard of her. Green was a successful financial speculator, quite unusual for a woman at the turn of the 20th century. She stood alone against the titans of industry. A woman with a brilliant mind, her fortune was made by shrewd investments in real estate, railroads and government bonds. She was the richest woman in America during the Gilded Age, but frugal to the extreme. They say she wore the same black dress until it turned green. Green lived a life of mean miserliness, to the extent of causing permanent injury to her son because of her reluctance to spend money on his health care. She was so obsessed with money that, it is said, she spent an entire night looking for a two-cent stamp she’d misplaced. If there’s a term for those who are beyond miserly, it might be miserly madness. Nevertheless, the story of how Green amassed great wealth is fascinating. She turned an inheritance into a fortune. Another woman who achieved great wealth through investing was Anne Scheiber, an auditor for the IRS. She retired in 1944 at age 51. After poring over numerous income tax returns, she’d decided that the way to wealth in America was achieved by owning stocks, so she started investing. She, too, was an inveterate miser, often going to shareholder meetings with a capacious bag. She would fill it with enough food, available at the meeting, to last her for days. Her broker said that at the time you could get a hot dog lunch for 15 cents at Nedick’s, a chain of fast-food restaurants. But thanks to shareholder meetings, Scheiber had found a cheaper place. She accumulated a $5,000 nest egg and then turned it into a $22 million fortune, even though she never made more than $4,000 a year and, in retirement, received a yearly pension of $3,150. She lived a reclusive life in a rent-controlled apartment in Manhattan and would walk miles just to save on bus fares. [xyz-ihs snippet="Mobile-Subscribe"] Like Green, Scheiber never bought new clothing or furniture. Everything she owned was in various stages of disrepair or decrepitude. My purpose in touching on the lives of these two women is to point out that they never enjoyed spending their wealth. Scheiber’s only pleasure was trips to the vault at Merrill Lynch near Wall Street to visit her stock certificates. Green’s enjoyment was besting other investors with her business acumen—and the rapacious accumulation of money. Many people get ahead in life by living beneath their means. But by the time they achieve financial stability, the frugal habits of a lifetime are hard to temper. On top of that, the point of reference we have for the price of everything is usually rooted in our younger years, making current prices seem excessive. We recoil from what we perceive to be a shocking increase, forgetting how quickly time passes. There is a fine line between being frugal and being miserly. Scheiber and Green were certainly extreme. When we reach a certain point where “enough is enough,” loosening the purse strings just makes sense. We all have to find that balance in our own way, and lead our lives the way we see fit. While we may not wish to spend money on ourselves—buying things we don’t really need or indulging in luxury vacations or flashy cars—generosity to those less fortunate can be a meaningful way to give purpose to our lives. Some call it giving back. I’ve heard of people being buried in their cars. I’m sure we’ve all read similar bizarre stories. But as far as worldly possessions go, there’s no U-Haul to heaven. Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie's earlier articles. [xyz-ihs snippet="Donate"]

It’s rough out there but peeking at your balances  does little to alleviate angst over the market meltdown.  A recent Barron’s article reminded me that “it’s all paper losses anyway, unless you sell.  if you do that, you lock in your losses, and then you have to worry about getting back in. Typically, by the time Investors feel comfortable returning to the market, stocks will have  already appreciated and investors will have missed.out on the recovery.” Many are looking to this week to provide a clearer picture as to the markets direction.  This is not my first rodeo so I have a good idea of my strength of resolve to stay the course.  I just hope the ride isn’t too bumpy.  The first time I faced a serious downturn in the market I was younger. I regretfully  sold.  Stay the course can be less comforting to new retirees who stand to risk the most in a market rout. Older, wiser and situated better, financially,  I’m hoping all my favorite names will be on sale.

IT'S BEEN A YEAR since New Jersey banned all plastic bags from grocery stores, and yet I’m still wandering into our local store without my reusable bags. You would think I’d have gotten the memo by now. I used to keep the bags in the trunk of my car—but out of sight, out of mind. As a visual reminder, I now keep them inside my car on the passenger side. But they might as well still be in the trunk. Maybe I should hang them around my neck. While walking through the parking lot during my last food shopping venture, I saw another shopper heading in the direction of the store, bogged down with bags, which reminded me that I’d forgotten mine—again. I’m on line at the checkout when I notice the shopper ahead of me has a neatly folded, organized pile of reusable bags. They’re uniform in size, color and pattern, with the logo on the bag matching the store we’re shopping at. Meanwhile, I have a motley wad of bags in various sizes, shapes, colors and patterns—some with a psychedelic melange—and almost all of which were freebies from various sources. I have bags with logos from three different supermarkets in my area. I feel a little sheepish when I hand over some of the bags at checkout in the Wegmans food store, while trying to hide my bag with the Aldi store logo emblazoned on it. One of my bags announces, “Surely Not Everybody was Kung Fu Fighting,” which would leave you completely lost unless you’re old enough to remember the song. I also have a bag with a New York attitude that reads, “You Got a Problem With That?” And from the Sopranos: “Fughgeddaboudit.” My logic is that, if others think I’m a thug, it might keep the crazies away. I’ve met with a few of those in store parking lots and need all the help I can get, since I’m a small lady and can’t run too fast, making me an easy catch. Meanwhile, I was reading an article about reusable bags being bacteria ridden, with instructions on how to wash them after each use. There are people who think they’ll die from E. coli if their meat touches their cereal. Some say bag the ban, but it looks like we’re stuck with it. And we’ve created another problem: Grocery delivery services have switched to heavy-duty reusable bags. Their customers complain about having a glut of these bags piled high in their garage, leaving no room for their cars. An added problem: We now have to go out to buy small plastic bags to replace the ones that we used to get from the grocery store, and which then had a second life as liners for small trash cans. It’s possible to purchase eco-friendly, biodegradable plastic grocery bags from Amazon. But is it okay to use them at the grocery store? They look kind of small and flimsy—more like the size people use when they walk their dog. It took a while to master the self-service checkout machine, where it helps to be ambidextrous. But since we must now scan, provide our own bags, bag our own food items and deal with processing payment, we ought to receive some compensation. How about a small discount or at least a free reusable bag? And it makes me wonder: Whatever happened to the bag boy? I think he now patrols the self-checkout area. Today, we have a different ecological problem to ponder. What are we to do with the discarded face masks I see littering the landscape? As Roseanne Roseannadanna used to say, “It’s always something—if it’s not one thing, it’s another.”

THEY SAY THAT TAKING a cruise is a poor man’s idea of a rich man’s vacation. As an unsophisticated traveler, all I knew of cruises were the glowing reports I heard from others who had taken them—and the romanticized versions I saw in the movies.  My aspirations were based on a movie I saw starring Doris Day, Romance on the High Seas. It’s about a glamorous, adventurous and romantic cruise with beautifully dressed people, exotic locales, lively music and the beguiling sea. Doris Day sang, “It’s Magic.” All in glorious Technicolor. In our younger years, my husband and I had a lot of caregiving responsibilities, so I put my dreams of vacations aside. But with those years behind us, I began to dream again of going on a cruise. My husband wouldn’t budge. Did I forget to mention he’s an inveterate homebody? One day, I decided it was now or never. I marched over to our local AAA store and gathered information. I chose a cruise to the New England states and Nova Scotia during the fall, when I could also enjoy the scenic foliage during my favorite time of year. Having never ventured too far from home on my own, I was somewhat apprehensive about traveling alone. But as luck would have it, a friend agreed to go with me. As she’s a veteran cruiser, it seemed an ideal situation. I bought some spiffy new outfits and I was off. My enthusiasm was quickly derailed. Not long into the cruise, I got seasick, despite taking precautions and proper medication. Not long after that, I caught a nasty cold. I also hadn’t taken into account that the quiet life at home was at odds with my new schedule. In my desire to get the most out of my vacation, I wanted to fully embrace everything. I just didn’t pace myself. I was up and at ‘em early every day, never a moment’s rest. By the time we got to Nova Scotia, I was sick and exhausted but fiercely determined to enjoy the tour—even if it killed me. All I remember is a lot of pine trees viewed from a bus. I then dozed off from lack of sleep, helped by the drone of the guide’s voice and the motion of the bus. To top it off, the bus stopped at a flea market, where we had to stay until it was time to get back on the bus. What? How mundane and humdrum—I could visit flea markets at home. I wanted to see more of Nova Scotia. I was disappointed with most of the tours, especially the one in Bar Harbor, Maine. I had always wanted to see Acadia National Park and learn more about it. I love nature and being outside. But the guide was obsessed with birds. Every 10 minutes, he would stop the tour, pull out poster photos of various birds, and begin a stifling lecture on the habits and distinctions of each. To say he was “for the birds” is putting it mildly—and the pun is intended. Finally, a spunky little woman in the tour group—who shall remain nameless—let him know, in a nice way, that she had paid for a guided tour, not a course in ornithology. He then sullenly relented and the other tour members thanked her for speaking up. [xyz-ihs snippet="Mobile-Subscribe"] The Boston tour was a little more enjoyable. It’s a clean city, not too much walking, and historically interesting. The guide was a good speaker and knowledgeable, except he just had to get into politics. He started inoffensively by talking about the Kennedys and their close ties to Boston. But he segued from there into his own political beliefs. Shades of Doonesbury—but he wasn’t a humorist or even a satirist. Heaven help us, he was an extremist. When we got to Newport, Rhode Island, it was raining. I decided to forgo a tour, as I’d previously seen the sumptuous mansions of the ultrarich. I just idly passed the time visiting a few shops, not wanting to stray too far from the ship. By this time, I’d had it with the guided tours. I think the savvier cruisers booked early and chose the better tours. I will say the food on board was good and plentiful. But because of my cold, I lost my sense of taste for a few days, much to my disappointment. The evening entertainment was pleasant, but nothing unforgettable. One night there was a singing group who sang a medley of songs from Jersey Boys, the Broadway show that’s a musical biography of The Four Seasons, the rock-and-roll doo-wop band. To my surprise, one of the singers in the group—a handsome young man—came into the audience and invited me to dance with him to Frankie Valli’s hit, “My Eyes Adored You,” a poignant song about unrequited love. We danced the whole number with the spotlights on us. Did I just have my 15 minutes of fame? Despite the dance, my overall experience didn’t meet my expectations, which were probably too fanciful. There’s a wide gulf between aspirations and reality, but I was glad I had my vacation. I would have always wondered what I’d missed if I hadn’t gone. Besides, I did have a few magic moments and the satisfaction of realizing my dream of a “Doris Day cruise”—even if it wasn’t quite as dreamy as I imagined. Marjorie Kondrack loves music, dancing and the arts, and is a former amateur ice dancer accredited by the United States Figure Skating Association. In retirement, she worked for eight years as a tax preparer for the IRS’s VITA and TCE programs. Check out Marjorie's earlier articles. [xyz-ihs snippet="Donate"]