topic Re: Guideline for providing income for a retired Senior citizen for Credit Card app in General Credit Topics

Guideline for providing income for a retired Senior citizen for Credit Card app

PlenopticAeon — Sat, 06 Nov 2021 21:27:39 GMT

My 86 year old mother is wanting to apply for the Chase Freedom Card (excellent credit score of 830) and I was going to help her submit the application. I'm wonder which sources I should add as her annual income (other than the obligatory SS monthly benefit). She only has a Venture Card (Originally a Capital One Visa signature which was opened back in the early 2000's) and only has a $15,000 credit limit.

I'm hoping with this app, she can get a higher credit limit but as she's now retired, wanted to know what other sources I can submit to buff up her credit limit (more than the current Cap1 card)

Appreciate any info and help (and thanks for understanding if this is a repeat question as I searched for this topic prior to posting, to no avail)

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Sat, 06 Nov 2021 21:56:13 GMT

If your mother has a steady, regular stream of other income, besides SS, you should include that as another source. But don't worry if she doesn't!

I don't. I just have SS. I had to retire early due to illness, so first I had SSDI then when I hit full retirement age, it changed to regular SS. All along the only income and source I've provided has been SS, with no issues. However, if I NEEDED to prove that I have access to more money, it's a simple matter of providing a statement from AIG, where I have an annuity I can draw from as needed. Although I rarely withdraw money from it--so it's not a regular, monthly source or anything like that--it DOES bolster my overall financial situation, so it could be used to add to my [paltry] SS. Note, though, that I've never been asked to provide anything else--and almost all of my cards have 5-figure limits, so my income has not been an issue in getting credit limit increases.

Good luck with your mom! I'd like to know what she ends up applying for. Oh, also be aware that some banks only provide space for *one* source of income; in that case, you want to provide her MAIN source (which I'm guessing is SS) when applying, but keep in mind what I said about proving other sources if the need ever arises.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

PlenopticAeon — Sun, 07 Nov 2021 00:32:42 GMT

Thanks for your reply, I'm in the process of filling out her application for the Chase Freedom Unlimited (as she's excited to get the SUB). However for primary source of income field, should I choose UNEMPLOYED or OTHER (as in being retired and receiving her monthly SS benefit)? I know one can still be approved if UNEMPLOYED but I wasn't sure if I should just choose that because technically she's unemployed. I understand I'm overthinking this but thanks for any additional help.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Sun, 07 Nov 2021 00:40:24 GMT

@PlenopticAeon wrote:
Thanks for your reply, I'm in the process of filling out her application for the Chase Freedom Unlimited (as she's excited to get the SUB). However for primary source of income field, should I choose UNEMPLOYED or OTHER (as in being retired and receiving her monthly SS benefit)? I know one can still be approved if UNEMPLOYED but I wasn't sure if I should just choose that because technically she's unemployed. I understand I'm overthinking this but thanks for any additional help.

You're welcome. And, no, you're really not overthinking it! It's very important to get things right, so you're doing a good job, taking your time, asking questions, etc.

If Chase doesn't have a 'retired' option under employment, I would choose 'other'--but be prepared to explain that if necessary, i.e., retired. I don't think I've ever put 'unemployed' but I could be wrong. I'd rather put 'other' and then explain that I'm retired, rather than put 'unemployed' which makes it look like I'm still in the workforce, but without a job right now.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

CreditInspired — Wed, 10 Nov 2021 11:30:18 GMT

@SoCalGardener wrote:
@PlenopticAeon wrote:
Thanks for your reply, I'm in the process of filling out her application for the Chase Freedom Unlimited (as she's excited to get the SUB). However for primary source of income field, should I choose UNEMPLOYED or OTHER (as in being retired and receiving her monthly SS benefit)? I know one can still be approved if UNEMPLOYED but I wasn't sure if I should just choose that because technically she's unemployed. I understand I'm overthinking this but thanks for any additional help.

You're welcome. And, no, you're really not overthinking it! It's very important to get things right, so you're doing a good job, taking your time, asking questions, etc.

If Chase doesn't have a 'retired' option under employment, I would choose 'other'--but be prepared to explain that if necessary, i.e., retired. I don't think I've ever put 'unemployed' but I could be wrong. I'd rather put 'other' and then explain that I'm retired, rather than put 'unemployed' which makes it look like I'm still in the workforce, but without a job right now.

^^^this.

And, if it were me, I'd either do the application over the phone or at the bank. Then, any questions you have can be answered by a live person. And as @SoCalGardener said, you're not overthinking it. It's always best to get it right the first time you apply.

GL2U and your mom

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SUPERSQUID — Wed, 10 Nov 2021 14:11:35 GMT

I also as the previous poster was forced to retire early but due to injury/physical issues. when i app i tell them i am retired and i put my actual income down. something i noticed when i updated my income on the target red card last may is their system automatically rounded my income to the nearest thousand. i was 530 past a certain thousand and they upped it 470 to the next thousand. i guess thats acceptable.

In a few years i can collect my 2 pensions and will have substantially more income.

I understand you can include household income if your mom has other people living there.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SouthJamaica — Wed, 10 Nov 2021 16:51:05 GMT

@PlenopticAeon wrote:
My 86 year old mother is wanting to apply for the Chase Freedom Card (excellent credit score of 830) and I was going to help her submit the application. I'm wonder which sources I should add as her annual income (other than the obligatory SS monthly benefit). She only has a Venture Card (Originally a Capital One Visa signature which was opened back in the early 2000's) and only has a $15,000 credit limit.

I'm hoping with this app, she can get a higher credit limit but as she's now retired, wanted to know what other sources I can submit to buff up her credit limit (more than the current Cap1 card)

Appreciate any info and help (and thanks for understanding if this is a repeat question as I searched for this topic prior to posting, to no avail)

This is not a difficult question.

You need to go with what her income tax returns say.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Wed, 10 Nov 2021 17:14:34 GMT

@SouthJamaica wrote:
@PlenopticAeon wrote:
My 86 year old mother is wanting to apply for the Chase Freedom Card (excellent credit score of 830) and I was going to help her submit the application. I'm wonder which sources I should add as her annual income (other than the obligatory SS monthly benefit).
This is not a difficult question.
You need to go with what her income tax returns say.

Sorry, but no.

Many retired people, including myself, are not required to file income tax returns. So this is not an option, nor should it be, since SS benefits are not taxable and would not be included on a tax return. Some retired people do file, for various reasons, but even in their cases SS is not taxable and therefore wouldn't be included in their total TAXABLE income.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

Save-n-Invest — Wed, 10 Nov 2021 18:27:22 GMT

Social Security benefits are taxable at certain modest income levels. The last time they *saved* Social Security in 1983 that tax was established. The fun thing is that income thresholds established in 1983 have not been indexed for inflation. A new (higher) threshold was added years later. Still no indexing.

https://www.ssa.gov/benefits/retirement/planner/taxes.html

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Wed, 10 Nov 2021 21:13:38 GMT

@Save-n-Invest wrote:
Social Security benefits are taxable at certain modest income levels. The last time they *saved* Social Security in 1983 that tax was established. The fun thing is that income thresholds established in 1983 have not been indexed for inflation. A new (higher) threshold was added years later. Still no indexing.

https://www.ssa.gov/benefits/retirement/planner/taxes.html

I guess I've been very lucky. My attorneys told me at the time my SSDI claim was approved that I would not be required to pay income tax going forward. And that's been true all along, even after it changed to regular SS. Because my other income is from an annuity that was funded with post-tax money, I'm not taxed when I make withdrawals. And its interest, while very good, doesn't put me over the threshhold for paying income tax.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SouthJamaica — Thu, 11 Nov 2021 02:18:20 GMT

@SoCalGardener wrote:
@Save-n-Invest wrote:
Social Security benefits are taxable at certain modest income levels. The last time they *saved* Social Security in 1983 that tax was established. The fun thing is that income thresholds established in 1983 have not been indexed for inflation. A new (higher) threshold was added years later. Still no indexing.

https://www.ssa.gov/benefits/retirement/planner/taxes.html

I guess I've been very lucky. My attorneys told me at the time my SSDI claim was approved that I would not be required to pay income tax going forward. And that's been true all along, even after it changed to regular SS. Because my other income is from an annuity that was funded with post-tax money, I'm not taxed when I make withdrawals. And its interest, while very good, doesn't put me over the threshhold for paying income tax.

1. Having to pay income tax and having to file annual tax returns are not the same thing.

2. Many people who do not have to file returns do in fact file returns, for a multiplicity of reasons.

3. We do not know what OP's mother's situation is, but if she doesn't file tax returns, she should look at a tax return form and see what she would be reporting as income if she were.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Thu, 11 Nov 2021 18:23:19 GMT

@SouthJamaica wrote:
@SoCalGardener wrote:
@Save-n-Invest wrote:
Social Security benefits are taxable at certain modest income levels. The last time they *saved* Social Security in 1983 that tax was established. The fun thing is that income thresholds established in 1983 have not been indexed for inflation. A new (higher) threshold was added years later. Still no indexing.

https://www.ssa.gov/benefits/retirement/planner/taxes.html

I guess I've been very lucky. My attorneys told me at the time my SSDI claim was approved that I would not be required to pay income tax going forward. And that's been true all along, even after it changed to regular SS. Because my other income is from an annuity that was funded with post-tax money, I'm not taxed when I make withdrawals. And its interest, while very good, doesn't put me over the threshhold for paying income tax.
1. Having to pay income tax and having to file annual tax returns are not the same thing.

2. Many people who do not have to file returns do in fact file returns, for a multiplicity of reasons.

3. We do not know what OP's mother's situation is, but if she doesn't file tax returns, she should look at a tax return form and see what she would be reporting as income if she were.

Yes, absolutely! As I said originally, MANY retired people--including me--are not required to file income tax returns, while SOME do file.

Having to file and wanting to file are a moot point for me, as there's absolutely nothing to be gained by filing.

As for using an income tax return to determine what income the mother should report, based on what I read yesterday (via links in this thread) lead me to believe that that would be incorrect. Something about taking HALF of your SS income and coming up with your AGI. That would be bad in terms of seeking a credit card. In my opinion, and experience, the best practice is to use my ACTUAL income as the income reported to CC companies. It's worked out very well for me!

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SUPERSQUID — Fri, 12 Nov 2021 00:19:10 GMT

In my case i file yearly federal tax returns but always owe zero and get a small amount back. my state doesnt tax ss so i am not required to file state taxes. i leave these decisions up to my cpa who used to work for the IRS.

If i were asked for proof of income it would be easy because i would simply give them the previous years tax document from ss plus my percentage of cola for the upcoming year.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

Save-n-Invest — Mon, 15 Nov 2021 03:24:56 GMT

@SoCalGardener wrote:
@SouthJamaica wrote:
@SoCalGardener wrote:
@Save-n-Invest wrote:
Social Security benefits are taxable at certain modest income levels. The last time they *saved* Social Security in 1983 that tax was established. The fun thing is that income thresholds established in 1983 have not been indexed for inflation. A new (higher) threshold was added years later. Still no indexing.

https://www.ssa.gov/benefits/retirement/planner/taxes.html

I guess I've been very lucky. My attorneys told me at the time my SSDI claim was approved that I would not be required to pay income tax going forward. And that's been true all along, even after it changed to regular SS. Because my other income is from an annuity that was funded with post-tax money, I'm not taxed when I make withdrawals. And its interest, while very good, doesn't put me over the threshhold for paying income tax.
1. Having to pay income tax and having to file annual tax returns are not the same thing.

2. Many people who do not have to file returns do in fact file returns, for a multiplicity of reasons.

3. We do not know what OP's mother's situation is, but if she doesn't file tax returns, she should look at a tax return form and see what she would be reporting as income if she were.
Yes, absolutely! As I said originally, MANY retired people--including me--are not required to file income tax returns, while SOME do file.

Having to file and wanting to file are a moot point for me, as there's absolutely nothing to be gained by filing.

As for using an income tax return to determine what income the mother should report, based on what I read yesterday (via links in this thread) lead me to believe that that would be incorrect. Something about taking HALF of your SS income and coming up with your AGI. That would be bad in terms of seeking a credit card. In my opinion, and experience, the best practice is to use my ACTUAL income as the income reported to CC companies. It's worked out very well for me!

Response

That can also be bad for your mental health. There is a worksheet type form on the benefit notice received each year. It's a convoluted exercise that only the government could design. The same weirdness is also available at irs.gov.

I use this to get an idea of what portion of my benefts will be taxable.

https://www.fool.com/retirement/social-security-how-much-benefits-taxed.aspx

Not recommending it for cc applications as I seldom apply for credit. The only time I was asked for taxable amount of SS was by Amex regarding a long time existing account always paid in full. Naturally, the geniuses at Amex make this ask in February when all data is i the CPAs office. Gotta love 'em.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Fri, 12 Nov 2021 19:03:18 GMT

@Save-n-Invest wrote:

That can also be bad for your mental health. There is a worksheet type form on the benefit notice received each year. It's a convoluted exercise that only the government could design. The same weirdness is also available at irs.gov.

I use this to get an idea of what portion of my benefts will be taxable.

https://www.fool.com/retirement/social-security-how-much-benefits-taxed.aspx

Not recommending it for cc applications as I seldom apply for credit. The only time I was asked for taxable amount of SS was by Amex regarding a long time existing account always paid in full. Naturally, the geniuses at Amex make this ask in February when all data is i the CPAs office. Gotta love 'em.

You know what I did? And do a few times a decade? There's an IRS chart that shows how much taxable income you have to make in order to be required to file. I verify that I don't meet the threshhold....and then I'm done for a few more years. If I ever found out that I should've been paying....at some point along the way....it couldn't possibly be a big deal, so I'd just pay it and be done with it. I used to use a CPA for all this, but no longer needed one after going on SSDI.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

Save-n-Invest — Sat, 13 Nov 2021 17:48:01 GMT

@SoCalGardener I still use the CPA. I'm probably turbotax material but I just don't want to do that. The CPA has been doing my taxes since forever. He tells me he just inputs my data into his computer for the filings. I like that he is the person authorized to contact if a taxing authority has concerns. I don't want to go to the slammer in my dotage.

The new tax law passed in December 2017 really did a number on me. CPA tried to talk me off the ledge but I refuse. I am required to comply. Affection for the the law is optional.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

SoCalGardener — Sat, 13 Nov 2021 18:36:52 GMT

@Save-n-Invest wrote:
@SoCalGardener I still use the CPA. I'm probably turbotax material but I just don't want to do that. The CPA has been doing my taxes since forever. He tells me he just inputs my data into his computer for the filings. I like that he is the person authorized to contact if a taxing authority has concerns. I don't want to go to the slammer in my dotage.

The new tax law passed in December 2017 really did a number on me. CPA tried to talk me off the ledge but I refuse. I am required to comply. Affection for the the law is optional.

My circumstances have changed SO DRAMATICALLY since before becoming disabled, there's no comparison. Everything has changed--from having a high-paying job to paying a mortgage to filing long 1040 forms and claiming everything....it's the polar opposite now. There's just no benefit in it for me, and since I'm not obligated to file, I don't. Even though I've had OUTRAGEOUS medical bills, filing taxes and itemizing those wouldn't give me any money! Medical expenses are just used to LOWER what you owe....they don't pay you back for outrageous bills. I wish it worked that way! Anyway, with no mortgage (and therefore no mortgage interest--if claiming that is still a thing), no work-related income, and interest income that doesn't come close to the threshhold, there's just no point.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

Save-n-Invest — Sat, 13 Nov 2021 18:54:19 GMT

@SoCalGardener if you don't need to file. You don't need to file. Makes sense to me. You know what your are doing.

The new law is a real beaut. The deductible items are out of pocket health care exceeding 7.5% of AGI. State and local taxes capped at 10k. You can claim real estate taxes and either sales tax *or* income tax, not both. Capped at 10K total.

Charitable contributions in full, I think. A few items were grandfathered such as the changes to taxation/deductibility of alimony payments. They even gave an extra year's grace for the old coots to trade up to the current model year.

Oh, personal exemption is gone, too. It's not been that long since people age 65+ and blind got two personal exemptions. Now it's jack!

SALT cap is the real kicker for me. I want to walk the line so I'm stopping here.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

NYC_Fella — Sat, 13 Nov 2021 22:48:45 GMT

Getting back to the original question, I'm retired and my "income" is whatever I want it to be since I have significant balances in retirement savings, most of which have alredy been taxed, so none of my withdrawals show up on my income tax returns. When I need money, I take some out. The amount varies wildly from year to year. Rather than try to explain all this, I just select "Retired" for occupation and $120K for income which is high enough to get most cards approved and low enough not to trigger a 4506 request. Haven't had a problem yet.

Re: Guideline for providing income for a retired Senior citizen for Credit Card app

Save-n-Invest — Sun, 14 Nov 2021 17:24:58 GMT

@NYC_Fella many of us are in the same position as you are. Income is what is needed at the time. Some issuers consider investable assets as well as income. Chosing retired and then responding to any foolw up questions is one way to go.