Your Money

The federal minimum wage is set at $7.25 an hour, a rate
that has not increased in more than 10 years, not even to keep pace with the
cost of living. Even so, the national average minimum wage is $11.80, but only
because some states have increased their minimum floor.¹ In 2020,
another 24 states are set to increase their minimum wage for workers, ranging
from $8.56 to $15.00 an hour.²

While you may work the same job at the same company as
another individual, but in another state with a similar cost of living, you
could earn substantially less money. That means a couple with a stay-home
parent in which the income earner works full time for the federal minimum wage,
the household income would be far below the federal poverty level for a family
of three ($21,720 in 2020).³

Regardless of how much income we earn, we each must learn to
manage our own money — living within our means and controlling our spending
habits and whatever indulgences cause us to go off course. It also means
insuring against the potential of large losses from which we may have difficulty
recovering financially. If we can help you figure out your insurance needs or help
you address them, please let us know.

Without a more universal set of minimum wage standards, the
country may continue down the path of greater disparity between poor and
wealthy states. It is perhaps for this reason that the concept of a universal
basic income is making a resurgence after being historically considered several
times. Back in the late 1700s, Thomas Paine was a proponent to help ensure
founding families each had an equal shot at success. In the 1960s, President
Nixon proposed a guaranteed annual income of $1,600 for families to ensure
children would not not grow up in poverty and risk suffering from the subsequent
long-term impacts.⁴

More recently, presidential candidate Andrew Yang proposed a
universal basic income of $1,000 a month. The strategy is to bolster today’s low-income,
poor and homeless populations; to help young people with student debt burdens; and
to try to reduce the wealth gap between middle- and upper-income classes.⁵

Without better solutions, the U.S. could fall further into a
widening income gap where the rich continue to get richer while the poor get
poorer — or at least fall further and further behind the curve. This could
include retirees who no longer earn a paycheck.

Remember that Social Security income is your income. It’s
called a retirement program because you’re entitled to it; you and/or your
spouse contributed money to the program throughout your careers (even if your
career was as a homemaker, you may still be eligible to collect spousal
benefits). However, even though you’re entitled to it, you won’t necessarily
receive all of it, because a portion may be deducted to pay for Medicare
premiums. If you have other sources of income, such as a pension, IRA
withdrawals, part-time work, interest and dividends, you may have to pay income
tax on your Social Security payments. You can elect to have income taxes
deducted from your Social Security benefits before they’re paid out.⁶

Content prepared by Kara Stefan
Communications.

¹ Stacey Vanek Smith and Cardiff Garcia. NPR. May 16,
2019. “The Real Minimum Wage.” https://www.npr.org/2019/05/16/723947780/the-real-minimum-wage. Accessed Feb. 7, 2020.

² Paycor. Dec. 6, 2019. “Minimum Wage By State And 2020
Increases.” https://www.paycor.com/resource-center/minimum-wage-by-state. Accessed Feb. 7, 2020.

³ Kimberly Amadeo. The Balance. Feb. 5, 2020. “Federal
Poverty Level Guidelines and Chart.” https://www.thebalance.com/federal-poverty-level-definition-guidelines-chart-3305843. Accessed Feb. 7, 2020.

⁴ Knowledge@Wharton. Jan. 17, 2020. “Can Universal
Basic Income Work?” https://knowledge.wharton.upenn.edu/article/universal-basic-income/. Accessed Feb. 7, 2020.

⁵ Ibid.

⁶ Emily Brandon. U.S. News & World Report. Jan. 21,
2020. “How Much You Will Get From Social Security.” https://money.usnews.com/money/retirement/social-security/articles/how-much-you-will-get-from-social-security. Accessed Feb. 7, 2020.

Our firm is not affiliated with the U.S. government or any governmental
agency.

We are an independent firm helping individuals create retirement
strategies using a variety of insurance products to custom suit their needs and
objectives. This material is intended to provide general information to help
you understand basic retirement income strategies and should not be construed
as financial advice.

The information contained in this material is believed to be reliable,
but accuracy and completeness cannot be guaranteed; it is not intended to be used
as the sole basis for financial decisions. If you are unable to access any of
the news articles and sources through the links provided in this text, please
contact us to request a copy of the desired reference.

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