This weekend the Coronavirus Aid, Relief and Economic Security (CARES) Act was passed into law, with the intention of providing relief to taxpayers affected by the coronavirus (COVID-19). I imagine this is but one of many stimulus/emergency relief efforts to come, and the details will undergo much scrutiny in the coming months.
This is a massive and wide-reaching law. I’ve done my best to summarize the parts that I think will have the greatest interest or impact to early retirees and aspiring early retirees, although it will affect nearly everyone.
After 10 years or so of “this legislation will pass soon”, at the end of 2019 the Setting Every Community Up for Retirement Enhancement Act finally became law.
Besides a cool acronym, the SECURE Act offers a wide range of changes and “enhancements” to 401(k)s, IRAs, and 529s, as well as a whole slew of incentives for small businesses to add or expand retirement plans to both full and part-time workers.
In my opinion, most of the changes (including the much-touted compression of the stretch IRA) are of limited interested (to the living.)
(GCC: Taxes and college tuition are 2 of the greatest expenses parents will face. But what if there was a tax hack that could reduce the cost of both? Today’s guest post shares the details… Read on!)
Hi Go Curry Cracker readers! I’m Kim from The Frugal Engineers. We are a family of three retiring in our thirties in Wyoming, and I’m here to talk tax hacking for college!
Over the last nine years of running our own engineering businesses, we’ve been tracking various tax optimization strategies. One of our favorite tax hacks is using our health savings account for college funds. By lowering our tax burden and maximizing our eligibility for college financial aid, we’re able to retire earlier and enjoy more time with our daughter. This post details part of our overall strategy for college planning in early retirement.
We max out our health savings account (HSA) each year that we’re eligible based on our health insurance. For a family of three in 2019 with a qualifying high deductible health insurance plan, that’s $7,000 a year. We pay cash for any medical, dental and vision expenses that we incur right now and save the receipts for reimbursement during the college years.
In fact, I refer to medical receipts as “future college tuition vouchers” in our house.