Everyday Law & Life

Is It Better to Take Social Security at 62 or Wait Until 67? Deciding when to start collecting Social Security can have a huge impact on your retirement income . You can start as early as age 62 , but is it better to wait until full retirement age (FRA), which is 67 for most people ? Let’s compare the pros and cons to help you decide. 🧓 What Happens If You Take Social Security at 62? You’ll receive reduced monthly benefits — about 30% less than what you’d get at age 67. ✅ Pros: Get money earlier Helpful if you retire early or have health concerns May be necessary if you can’t work ❌ Cons: Lower lifetime benefit if you live long Locked-in lower monthly payments May affect spousal/survivor benefits 👴 What Happens If You Wait Until 67? You’ll receive 100% of your full benefit . ✅ Pros: Higher monthly income for life Better spousal/survivor benefits More tax-efficient in some cases ❌ Cons: Delay in receiving funds May not live lon...

Do You Have to Pay Taxes on Your Severance Package in the U.S.? If you've been laid off, your employer might offer you a severance package — a lump sum or series of payments to support you after separation. But here's the catch: Will the IRS take a slice of it? Let’s break it down simply. ✅ Yes, Severance Pay Is Taxable The IRS treats severance pay as regular income , meaning: Federal income tax applies Social Security and Medicare taxes apply State income tax may apply , depending on where you live In short: You don’t keep the full amount. 💡 How Is It Taxed? Usually, a flat 22% federal withholding is applied (as with bonuses) States may withhold separately It counts toward your total annual income , which could push you into a higher tax bracket 🧾 Severance vs. Unemployment Benefits Receiving a severance package may: Delay your eligibility for unemployment in some states Reduce your benefit amount temporarily ⚠️ Always repo...

Do You Have to Pay Taxes on an Inheritance in the U.S.? Inheriting money or property from a loved one can be both emotional and confusing — especially when it comes to taxes. Many Americans wonder: Do I have to pay taxes on what I inherit? Here’s a clear and simple breakdown of how inheritance taxes work in the U.S., and what you need to know to stay compliant and avoid unexpected bills. ✅ Is Inheritance Taxed in the U.S.? It depends. At the federal level, there is no inheritance tax . However, that doesn’t mean you’re off the hook entirely. Some states do impose inheritance taxes, and large estates may still trigger estate taxes . 🏛 Federal Taxes vs. State Taxes Tax Type Applies to Who Pays? Estate Tax Estates over $13.61 million (as of 2024) The estate (not the heir) Inheritance Tax Only in 6 states The heir (you) States with inheritance tax: Iowa (phasing out by 2025) Kentucky Maryland (only for non-lineal heirs) Nebraska New Jersey...