Posts by Eric Reed
RMDs
Can I Take My RMDs When My Portfolio Is Down to Make Them Smaller?
Unfortunately, you can’t time the market on required minimum distributions (RMDs). RMDs are calculated based on two factors: the value of your portfolio and your age, both as measured at the end of the previous year. So, for example, your required minimum distribution in 2025 is based on the value of your portfolio and your… read more…
Retirement Planning
I Have $1.1 Million Saved and Expect a $2,700 Social Security Benefit. Can I Retire at 65?
The question of when you can retire is at once complicated and, at the same time, simple. Complicated, because it requires balancing portfolio risk and returns against future spending, potential needs and other unknowns. Getting all that right requires you to make a lot of educated guesses. Simple, because at the end of all that,… read more…
RMDs
I’m 65 and Started Taking My $2,200 Social Security Check. Can I Still Do a Roth Conversion to Avoid RMDs?
You can make a Roth conversion at any age, and the money that you convert will be exempt from required minimum distribution (RMD) rules. If your only goal is to avoid required minimum distributions – for example, if you want to maximize the long-term value of your estate – this could potentially be a sound… read more…
Gift Tax
How Much Money Can I Give My Grandchildren Without Triggering Gift Taxes?
Most households don’t have to worry about the gift tax. For 2025, you can give up to $19,000, per person, to as many people as you want without triggering any taxes. This is the annual exemption. Beyond this amount, you can give away up to $13.99 million in total over your lifetime without paying taxes… read more…
Social Security
Social Security To End Telephone Verification: Will You Have to Go In Person?
Starting on March 31, the Social Security Administration will change how it processes requests. According to a March 18 announcement, the agency will no longer allow individuals to file for benefits or change their banking information over the telephone. Instead, they must do so either through the SSA’s web portal (called “my Social Security”) or by… read more…
Advisor Fees & Costs
I Have $3 Million Invested With My Financial Advisor and Pay a 1% Fee. Am I Paying Too Much?
“Financial advisor” covers a wide range of services, ranging from simple counsel and budgeting to tax preparation, long-term planning and portfolio management. What you pay, and how much, will depend on the services you engage and the kind of firm you hire. You’ll generally pay less for smaller and more discrete services. For example, a… read more…
Retirement Planning
I’m 69 With $800k in Savings. How Do I Make Sure This Money Lasts the Rest of My Life?
It takes planning to make your savings last. Retirement means living on your savings, assets and structured benefits. Many households find this notion stressful, but it doesn’t have to be. The right plan can give you a comfortable, reliable income in retirement. But that plan will require balancing risk, growth and spending, and you don’t… read more…
401(k)
I Have $920k in My 401(k). What Should I Do With It When I Retire?
Retirement is about balance. In retirement, many households generate a fixed income from personal savings and Social Security benefits. Retirees rarely have dependents or long-term saving needs (although of course estate planning is a factor), so they may be able to focus more on their monthly numbers. Allocating your income streams, planning for taxes and… read more…
Retirement Planning
Airline Pilot Retirement: What to Know
You can make a lot of money as an airline pilot. According to the latest Bureau of Labor Statistics data, the median pay for a commercial airline pilot was $171,210. This puts it far above the U.S. baseline of around $75,000, and is particularly good for an industry with a large number of open positions looking… read more…
401(k)
Aged 60 to 63 With a 401(k)? Here’s How New Contribution Rules Could Impact Your Retirement Savings
The IRS now allows a narrow, specific window for accelerated catch-up contributions. Between the ages of 60 and 63, you can make additional catch-up contributions to tax advantaged retirement accounts. Per the SECURE 2.0 Act, at ages 60, 61, 62 and 63, individuals with an employer-sponsored retirement plan may contribute an additional $11,250 per year… read more…
Tax Credits & Deductions
Average Itemized Deductions in Some States Reach Over $50k. Are You Getting the Most Out of Your Tax Return?
Should you itemize your taxes? Most taxpayers take the standard each year. The Tax Policy Center estimates that only about 10% of households itemize their taxes. This is in large part because the standard deduction is $15,000 per person for individual filers ($30,000 combined for married households). That makes it large enough that, in most cases,… read more…
Roth & Traditional IRAs
I’m 61 With $890k in My IRA. Should I Convert 10% per Year to Avoid Taxes and RMDs in Retirement?
When should you use a Roth IRA to manage your taxes? As you hit your 60s, it’s common to shift retirement planning from general wealth accumulation to practical details like taxes and required minimum distributions (RMDs). Getting this right matters, because how you manage these tax requirements will help determine how much spending power you… read more…
Tax Planning
What Are the Tax Benefits of an LLC for Rental Properties?
When you have valuable assets, significant costs or debt, or the possibility of someone getting hurt, a limited liability company (LLC) could help shield you from liability. Additionally, it can also help you with your taxes. For property owners, this business structure is commonly used to organize rental properties into separate LLCs with the goals… read more…
Financial Planning
I’m 60 and Retiring Soon. How Should I Structure My $1.2 Million Portfolio?
Broadly speaking, there are three stages to retirement planning: accumulation, distribution and estate. The accumulation phase refers to your working life, which is when you build the wealth that you’ll eventually retire on. This stage is about savings, growth and long-term investing. The estate phase of your retirement plan is when you make preparations for… read more…
Financial Planning
I’m 52 With $1.4 Million in My 401(k). Would Catch-Up Contributions Be Worth It?
Catch-up contributions are usually worth it, in the sense that it’s always a good idea to boost your retirement savings. If you can increase your savings, it’s generally wise to do so. The question for many households over the age of 50 is whether catch-up contributions are necessary. If you invest in an employer-sponsored plan… read more…
Tax Policy
Will I Be Getting a $5,000 DOGE Tax Refund? Does It Make Sense to Wait to File My Taxes?
Are you due for a DOGE tax refund? Not yet. On Thursday, the Trump Administration made news when President Donald Trump and Elon Musk publicly discussed the idea of a tax break funded by cuts to government spending. The idea, which reportedly started as a post on X (formerly Twitter), is to issue a tax… read more…
Financial Planning
Will $780K Last if I Retire at 65 With $1,900 a Month in Social Security?
Most of the time, we talk about retirement planning in relation to goals, lifestyle and how to build the wealth to maintain that lifestyle in retirement. But there’s another way to looks at things. Once you reach retirement age, what can you do with what you have? Based on your savings, benefits and other assets,… read more…
Medicare
I Plan to Withdraw $110k From My 401(k) This Year. Will This Cause My Medicare Premiums to Go Up?
Your 401(k) withdrawals can affect how much you spend on Medicare. While few households pay premiums for Medicare Part A, most households do pay premiums for Medicare Part B and Part D. These premiums are based in significant part on your taxable household income. If your income goes up, such as by making a withdrawal… read more…
Advisor Fees & Costs
I Have $2.5 Million Invested With My Financial Advisor and Pay a 1% Fee. Am I Paying Too Much?
How much should you pay a financial advisor? The answer is, there are a lot of answers to this question. The simple one is: around 1%. That’s the average rate that a professional financial advisor charges to manage your money. The better one is: it depends entirely on what services you need and how much money… read more…
Industry Trends
How Valuable is the Average 55 Year Old Prospect to a Financial Advisor?
Focusing on specific client niches, or common characteristics and attributes that their target demographics share, can help financial advisors consolidate marketing resources. Understanding common threads within demographic cohorts can allow an advisor to speak more directly to the needs and concerns of their clients and prospects, thus strengthening their position among advisors competing for the… read more…
Social Security
Will Doing $50k in Annual Roth Conversions Lead to Higher Social Security Benefits?
Curious if a Roth conversion might boost your Social Security benefits? Here’s the reality: while converting to a Roth IRA ramps up your taxable income for that year, it doesn’t affect the way Social Security calculates your benefits. Social Security relies solely on your earned income — not the extra taxable income generated by a… read more…
Rollovers & Conversions
I’m 69 With $1 Million in an IRA. Is It Too Late for a Roth Conversion?
Legally, it’s never too late to make a Roth conversion. You can do this at any time in life, in any amount, so long as you have funds in a qualifying account. Financially, however, the later you are in life the more likely it is that you will pay more in taxes on a Roth… read more…
Other
How a Durable Power of Attorney in Healthcare Works
A medical power of attorney is a legal assignment that gives someone the authority to make medical decisions on your behalf if you are incapacitated. By definition, you must make this a durable power of attorney grant. Although power of attorney is an important part of planning for your estate and aging, medical power of… read more…
Rollovers & Conversions
I’m 63 With $1.4 Million in My 401(k) and Have Started Social Security. Is It Too Late for a Roth Conversion?
Procedurally, it’s never too late to make a Roth conversion. The IRS allows you to move this money at any time, so long as you have funds in a qualifying pre-tax account. In many cases, the closer you are to retirement the more likely it is that a Roth conversion could cost you big. This… read more…
Inheritance
My Dad Left Me $675k in an IRA, but I’m in the 32% Tax Bracket. How Should I Structure My Withdrawals?
There are different rules for inherited retirement accounts. When you build your own retirement account, you can contribute new money into that portfolio. You can also leave it in place until you need it, subject only to RMDs (Required Minimum Distributions) that kick in around age 73 for pre-tax portfolios. When you inherit a retirement… read more…