Increased costs hurt retirement budget

DEAR BRUCE: >> When people write you with a question about retirement and state their budget, do they realize that the budget they have when they retire will never last past the first year? Everything from taxes to insurance increases (car insurance and medical escalates once you are 70). The big surprise comes if one of the spouses requires being placed in a nursing home. That drains your retirement account quickly. Also, when one spouse passes away, the other is left with only one Social Security check. These are just a few of the surprises you encounter once you retire. -- D.M. DEAR D.M.: >> Thank you very much for your contribution. There are so many surprises in retirement, and most of them are unpleasant. The only way to lessen the burden is to pay the smallest amount of money possible for these activities, which I am certain you’re doing. DEAR BRUCE: >> My wife and I are legal guardians of our 12-yearold grandson, who lives with us. We have been advised that if we claim him on our income tax, our financial resources and not the parents’ resources will be the basis for scholarship consideration. His biological parents have no resources. Would it be advisable for us not to claim him on our taxes so that we can maximize his potential school and college scholarship aid? -- G.V. DEAR G.V.: >> I don’t see why you would fight this when, for the next six years, there will be a substantial tax advantage to you. I also don’t see how this would affect the possibility of getting a scholarship since you’re the legal guardian, although, if you have substantial income, you may be excluded from some scholarship plans.

That acknowledged, I still would go ahead and declare him as a dependent for the next six years and face the problem when it comes. If you are excluded from consideration, then be grateful that you’re earning that much money, but that’s a whole other program.

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