- How Much Should You Put in Your 403(b) Per Paycheck?
If you work in the education, healthcare or nonprofit sector, you’ve likely asked an important question regarding your plan for retirement: how much should I put in my 403(b) per paycheck? The right amount to contribute depends on several factors, including your age, salary, employer match and overall retirement strategy. Whether you are just starting… read more…
- SEP vs. Annuity: Which Is Better for the Self-Employed?
If you’re self-employed, saving for retirement is your responsibility. Two common tools are SEP IRAs and annuities, but they work in different ways. An SEP IRA gives you tax advantages, control over investments and flexibility. An annuity offers guaranteed income, but usually with less access to your money and slower growth. Understanding the differences can… read more…
- What Are the Pros and Cons of a Defined Benefit Plan?
Defined benefit plans, often referred to as traditional pensions, offer a reliable stream of income in retirement. These plans can provide peace of mind with guaranteed income, but they also tend to be less flexible than defined contribution plans like 401(k)s. They are also not available to most private-sector workers. Whether you’re evaluating a job… read more…
- Guide to Rabbi Trusts: What They Are, Pros and Cons
A rabbi trust is a type of irrevocable trust that employers use to fund deferred compensation plans for key employees or executives. The money is set aside for the employee but can still be taken by creditors if the employer goes bankrupt. A financial advisor can help you decide if a rabbi trust is a… read more…
- Should I Take a $115,000 Lump Sum or Opt for $820 Monthly Annuity Payments?
If you are facing the choice between a large lump sum or monthly payments, you’ll likely want to consider several key factors before making a decision. One concern is when you will receive the money, since getting $115,000 up front will allow you to invest it sooner and earn money from it over a longer… read more…
- Is a Thrift Savings Plan (TSP) a Qualified Retirement Plan?
A thrift savings plan (TSP) is a retirement savings program specifically designed for federal employees and members of the military. TSPs are considered qualified retirement plans, and this status affects aspects like tax benefits, employer contributions and protections under federal law. Qualified retirement plans must meet certain standards set by the IRS and are typically… read more…
- Typical Options for Pension Payout and How to Choose One
If you participate in a pension plan through your workplace, you’ll have to decide how you want to receive the payout when you retire. Pension plans typically offer two disbursement options: an annuity, which provides steady payments over time, or a lump-sum payment. Each option has its pros and cons, and the best choice will… read more…
- Should I Take a $500,000 Lump Sum or $3,500 Monthly Payments for My Pension?
Deciding between a $500,000 lump sum or $3,500 monthly annuity payments for your pension isn’t straightforward and involves weighing several personal factors. You need to consider how long you might live, which impacts how much total money you’ll get from monthly payments, alongside your retirement age to see how long your funds need to last.… read more…
- How Deferred Compensation Works in South Carolina
South Carolina offers a deferred compensation program that allows public-sector employees to set aside a portion of their income to be paid out at a later date, typically during retirement. Contributions are often made pre-tax, which can lower current taxable income and provide potential tax benefits. Teachers, government workers, and other public employees can use… read more…
- What Is the Retirement Age in Ohio?
In Ohio, the retirement age follows federal guidelines, typically ranging from 65 to 67 based on the year of birth for non-government employees. Teachers and state workers may have different retirement age requirements due to their specific pension plans. A financial advisor can help you with your retirement plan options and create a personalized strategy… read more…
- How a Deferred Compensation Plan Works in Missouri
A deferred compensation plan allows eligible employees to set aside part of their salary into an account that grows tax-free until retirement. Many public employees in Missouri can use these plans, often called 457(b) plans, to supplement pensions or Social Security. A financial advisor can help you answer questions about Missouri’s deferred compensation plan, and… read more…
- What Is the Retirement Age in New York?
In the Empire State, the retirement age can vary depending on several factors, including the type of employment and the retirement system one is part of. For most individuals, the standard retirement age aligns with the federal guidelines set by the Social Security Administration, which is gradually increasing to 67 for those born in 1960… read more…
- What Is the Retirement Age in Illinois?
Public employees in Illinois are part of a structured retirement system that determines when they can start receiving pension benefits. The state offers several pension systems, including those for teachers, state employees and police officers, each with its own eligibility requirements. For example, members of the Illinois Teachers’ Retirement System (TRS) and State Employees’ Retirement… read more…
- What Is the Retirement Age in Florida?
The retirement age in Florida, specifically for those enrolled in the Florida Retirement System (FRS) for public-sector workers, depends on the employee’s age and years of service. Early retirement is possible, but it comes with a reduction in benefits. For most members of the FRS Pension Plan, the normal retirement age is 62 or 65,… read more…
- How a 409a Deferred Compensation Plan Works
A 409a deferred compensation plan is a non-qualified arrangement that allows employees to defer a portion of their income to a future date. This plan is often used by high-income earners to reduce taxable income in the short term. Unlike qualified plans such as 401(k)s, 409a plans have flexible contribution limits and payout schedules but… read more…
- How to Avoid Paying Taxes on Pensions
Retirement should be a time of financial peace, yet many retirees find themselves surprised by the tax implications of their pension income. Understanding how to legally minimize taxes on your pension can significantly impact your retirement lifestyle and financial security. While pensions are typically taxable, several legitimate strategies may help reduce your tax burden without… read more…
- 7 Jobs That Still Offer a Pension for Retirement
While pensions have become less common in the private sector, there are still jobs that provide this valuable benefit. Government, public-sector and unionized employers are all likely to offer pensions to their employees. It can be worthwhile to consider whether working in one of those fields could be a viable way to provide for a… read more…
- 6 Places That Offer Free Estate Planning for Veterans
Estate planning is important for managing and distributing assets, especially for veterans who have unique benefits like pensions, VA benefits and healthcare coverage to consider. Veterans can access free estate planning services, including wills, through various organizations, so they don’t have to handle this task alone or pay for professional help. If you need help… read more…
- How Spousal Survivor Benefits Work for a Pension
Pension plans often include spousal survivor benefits, which allow surviving spouses to receive part of the pension payments after the pension holder’s death. These benefits can play a key role in long-term financial planning for married couples, as they provide continued income for surviving spouses. You should know how these benefits work if you or… read more…
- My Dad Passed Away. How Can I Access His Retirement Funds?
When faced with the death of a parent, many find themselves asking whether they can claim their parent’s retirement funds. Accessing your father’s retirement funds can depend on various factors such as the type of retirement account he held and whether you are a named beneficiary. Typically, accounts like IRAs or 401(k)s allow for beneficiary… read more…
- At What Age Should You Retire From the Federal Government?
Federal employees generally receive annuity-based pension funds when they retire. Depending on when you joined the government, this may be supplemented by Social Security and a private savings plan. The amount you receive from these various programs depends, among other things, on how long you worked for the government and at what age you retire. As… read more…
- What Is Excess Accumulation in Qualified Retirement Plans?
Navigating the rules and regulations surrounding qualified retirement plans like 401(k)s can be complex, particularly when it comes to required minimum distributions (RMDs). When these mandatory withdrawals are not taken on time or in sufficient amounts, the funds that are not withdrawn will be considered excess accumulation and subject to tax penalties. A financial advisor… read more…
- Differences in the Types of Retirement Plans
There are many retirement plans available to help you save for your golden years. 401(k)s, IRAs and Roth IRAs offer unique benefits and tax advantages tailored to different financial goals and employment situations. Choosing the right plan can affect your savings strategy, tax liabilities and overall retirement readiness, which is why carefully comparing the available… read more…
- How Thrift Savings Plans Are Affected by a Divorce
How thrift savings plans (TSPs) are affected in divorce depends on their value and the overall division of assets. Federal regulations govern how TSP accounts are divided, often involving a court order known as a Retirement Benefits Court Order (RBCO). These orders ensure a fair distribution of retirement savings between spouses, considering various factors like… read more…
- Retirement Plan Options for 1099 Workers
Independent contractors face unique challenges when it comes to retirement planning due to the lack of employer-sponsored plans. The good news is that there are several retirement plan options designed specifically for self-employed individuals, each with unique benefits and consideration. Popular choices include SEP IRAs, SIMPLE IRAs and solo 401(k)s, each offering distinct benefits and… read more…