Low Income Senior

mountainsoft

Thinks s/he gets paid by the post
Joined
Nov 14, 2016
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Washington State
I just discovered we are low income seniors. :)

Our property assessment arrived a couple days ago, along with a flyer talking about the senior exemptions and how the thresholds have increased. According to the flyer the median household income in our county is somewhere around 85K per year. Heck, we never made that much when we were both working, and certainly don't now that we are retired.

They have three different "tiers" of senior exemptions, and we easily fit under the lowest 44K tier. That should freeze our property value at the present level and knock about 3K off our typical 5K property tax bill. Nice.

Unfortunately, I can't sign up till December of this year (after my 61st birthday), and I got conflicting answers when I emailed the county assessor with some questions. The first reply said we wouldn't qualify till next year, while the second reply confirmed I should qualify this year. So, I'll probably apply this year and see where it goes. Worst case we wait another year.

The funny thing about being a "low income senior", we don't FEEL like we're low income. We basically do anything we want, travel a few times a year, buy anything we need, eat out fairly often, etc. When I think of low income I think of folks who are struggling to pay their rent or put food on the table. It's all relative I suppose... There's always someone worse off, or better off...
 
IF you are entitled to it then sign up for it.

You have paid taxes for years. Isn't about time you are able to catch a break??

You seem to feel a little guilty. Don't. Take the money, splurge on something you desire or on a vacation of some sort!
 
I am in and out of your camp over the past few years. PA does not tax pensions, SS benefits, or distributions from 401ks, and IRAs, but it does tax rental income, divvies and interest. While initially unintentional, if that income is below ~$13,300, you owe no state income tax per the poverty index. Now I try to arrange things that I'm under the limit.
 
Interesting. I often hear about these higher median HHI within reasonable/medium cost-of-living areas.

In contrast, I live in a VCOL where almost everything has become so unaffordable for the average person - yet our median HHI is low: 48-50k. People struggle with higher than average costs for food, gas, insurance, taxes, rent. Yet wages are much lower vs most regions in US.

That low HHI throws off eligibility thresholds for federal tax breaks, state rebates, other programs. You have to be practically destitute to qualify. :(
 
Our county has that but the taxes have to be paid back when the house is sold.
 
I bet you can get that new EV lease deal coming around too. We miss it by *that* much.
 
We get quite a nice RE tax exemption just for being (wait for it) OLD! So I wouldn't feel anything about an exemption based on income. Take it and enjoy FIRE. :flowers:
 
In my area from $50K - $58.4K is the Senior low income phase out range. 50% off at $50K to 5% off at $58.4K. Income includes Social Security and income inside your IRAs, even if you didn't withdraw anything from the IRA. Senior means age 65+.
 
The property tax reduction is stepped in my state. Also, the amounts vary by location. If you live in the Metropolis county where COL is very high the top rate is in the low 80's. OTOH, down in Lake Gettinby county the top rate might be in the 50's.
 
Here it's half off if you are over 65 & total household income (of any form, including SS) is under ~$35k.

That limit is adjusted annually for inflation, but you must re-qualify annually.
 
In my area from $50K - $58.4K is the Senior low income phase out range. 50% off at $50K to 5% off at $58.4K. Income includes Social Security and income inside your IRAs, even if you didn't withdraw anything from the IRA. Senior means age 65+.
How would they measure income inside an IRA if you don’t withdraw?
 
That is great! I would sign up if I qualified. That really is a great program for those that meet the requirements.
 
How would they measure income inside an IRA if you don’t withdraw?
Good question, I don't know.

"HOW ARE IRAs TREATED?
Contributions to an IRA are not deductible, earnings
on IRAs are included as income, and distributions from
IRAs are excluded from income."
 
How would they measure income inside an IRA if you don’t withdraw?
Yeah, and what if your balance within the IRA goes DOWN? Do you get to subtract your paper loss from your other income?? Sounds complicated.
 
For the purposes of this exercise income = that which you pay taxes on. Until you take distributions there is no income.
 
... The funny thing about being a "low income senior", we don't FEEL like we're low income. We basically do anything we want, travel a few times a year, buy anything we need, eat out fairly often, etc. When I think of low income I think of folks who are struggling to pay their rent or put food on the table. It's all relative I suppose... There's always someone worse off, or better off...
Recounted by John Bogle:

At a party given by a billionaire on Shelter Island, the late Kurt Vonnegut informs his pal, the author Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel "Catch 22" over its whole history. Heller responds, “Yes, but I have something he will never have . . . Enough.”
 
Our county has that but the taxes have to be paid back when the house is sold.
We have two different programs here. The "Deferral" program is the one that has to be paid when the house is sold. I'm not interested in that one.

The "Exemption" program simply lowers your property tax bill based on your income, and does not need to be paid back. Property Tax Exemption Program
 
Good question, I don't know.

"HOW ARE IRAs TREATED?
Contributions to an IRA are not deductible, earnings
on IRAs are included as income, and distributions from
IRAs are excluded from income."
Weird.

I'm trying to reduce my income for ACA, but it's not easy with inflation and resulting interest rates being so high. I recently started a 6 year $100K annuity to reduce my income when a CD matured. But that's probably not enough. I hate to buy BRK.B with stocks running at a record high. I'm in my 50's still but will be delaying SS to age 65 for when I no longer have to be concerned about ACA.
 
For the purposes of this exercise income = that which you pay taxes on. Until you take distributions there is no income.
That's one, but also no tax on Roth distributions, and only tax capital gains when selling stock funds in a non-retirement account, and even SS isn't fully taxed.
 
Weird.

I'm trying to reduce my income for ACA, but it's not easy with inflation and resulting interest rates being so high. I recently started a 6 year $100K annuity to reduce my income when a CD matured. But that's probably not enough. I hate to buy BRK.B with stocks running at a record high. I'm in my 50's still but will be delaying SS to age 65 for when I no longer have to be concerned about ACA.
Between my frozen pension and Social Security alone I will probably be too high for any savings. First world problems.
 
Our HCOL NJ has a senior freeze for property taxes. After 5 years paying taxes, you receive a rebate of subsequent increases each year.
It actually will allow us to stay here near our grown children.
There is an income limit but it's pretty generous, maybe $80K.
 
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