- What Are Safe Retirement Withdrawal Rates?
One of the most pressing questions you’ll face when planning for retirement is how much you can safely withdraw from your nest egg each year. This percentage, known as a safe withdrawal rate, aims to ensure that you don’t deplete your savings prematurely. Calculating your safe withdrawal rate requires you to account for your age… read more…
- 11 Retirement Planning Tips for 2024
Planning for retirement has a new look in 2024, thanks to changes brought about by Congress. Retirement savers this year will find fresh things to consider when it comes to rainy day savings, 401(k) contribution limits for older workers, rules on mandatory withdrawals for Roth 401(k) plans and student loan payment matches. At the same… read more…
- I’m 65 With $850,000 in an IRA. Is It Worth It to Convert That Money to a Roth to Avoid RMDs?
Required minimum distributions (RMDs) from pre-tax retirement accounts can have a number of unintended consequences. These mandatory withdrawals can push you into a higher tax bracket, reduce your investment flexibility, increase your Medicare premiums and result in more of your Social Security benefits being taxed. If you’re planning to convert IRA funds to a Roth… read more…
- Our Combined Income Will Top $400k This Year. Can We Use a Backdoor Roth to Avoid Future Taxes?
A backdoor Roth conversion can save you significantly in future taxes, but at the cost of paying those taxes now. This isn’t always a good deal in the long run. If you’re considering a backdoor Roth IRA or other strategies to save on taxes, consider talking it over with a financial advisor. For example, perhaps… read more…
- This Is My First Year Taking RMDs. What Should I Do With the Money If I Don’t Need It Yet?
Anyone with a 401(k), traditional IRA or similar tax-deferred retirement account eventually is going to face the requirement to start taking required minimum distributions (RMDs) from their accounts. The IRS has allowed you to have what can be decades of tax-free growth in the account, along with years of tax deductions, so they eventually requiring… read more…
- How to Save Money on a Tight Budget in Retirement
Retirement is a time to enjoy what you love most, from family and friends to traveling and gardening. However, affording your desired lifestyle isn’t automatic, even if you have a healthy retirement account and consistent Social Security checks. When you retire, you end up with a fixed income. Here are eight common ways you can… read more…
- What Is a Conduit IRA?
A conduit IRA is a strategic financial instrument that provides a bridge for individuals transitioning between jobs, freelance work, or other employment changes. This specialized investment account allows for the transfer of funds from qualified retirement plans, such as 401(k)s and 403(b)s, safeguarding individuals from potential tax repercussions associated with delayed reinvestment. By offering a… read more…
- I’m 68 With $950k in an IRA. How Do I Make Sure It Lasts My Whole Life?
Longevity risk is at the heart of retirement planning. You wind down work and income, counting on savings to carry you through the rest of your life. But with careful saving and money management, it might be possible to make this money last. For example, say that you recently reached retirement age at 68 and have… read more…
- What Are the Exceptions to the IRA Early Withdrawal Penalty?
Individual retirement accounts (IRAs) are tax-advantaged savings vehicles designed to help Americans save money for retirement. While there are tax benefits associated with IRAs, withdrawing money before age 59 ½ can trigger income taxes and a 10% early withdrawal penalty. However, the IRS makes several exceptions to this rule. If you need to withdraw money… read more…
- We’re in Our Late 50s With $1.6 Million in Our 401(k)s. Should We Switch to Roth Contributions?
A Roth IRA offers significant benefits for retirees. As an after-tax account, distributions from Roth IRAs are typically tax-free. This can save you a lot of money in retirement, but at the cost of up-front tax payments while you’re saving. You will spend more to build your portfolio today, but will save money later. A… read more…
- How an ESOP to IRA Rollover Works
An ESOP (Employee Stock Ownership Plan) is a qualified retirement plan that allows employees to become partial owners of the company they work for by acquiring shares of its stock. If you own an ESOP, you may be thinking about transferring it to an IRA, especially if you’re looking for greater flexibility, diversification, or to… read more…
- How Much Money Most People Have Saved By Age 60
According to The Federal Reserve, the median retirement account savings for households between ages 55 and 64 is roughly $185,000. While this is a considerable amount of money, it’s probably not enough to secure a comfortable retirement for most people. A standard household making the median income will likely want between $415,000 and $825,000 in assets… read more…
- I Have $850,000 in an IRA and Would Receive $2,800 Monthly from Social Security. Can I Retire at 65?
For many retirees, prudent withdrawals from a wisely invested portfolio combined with Social Security benefits can provide a consistent income to support their spending needs. But what if you had $850,000 in an IRA and $2,800 in monthly Social Security benefits: would that be enough to retire at 65? To answer this question, you’d have… read more…
- I’m Going to Get $3,000 Per Month From Social Security. How Can I Reduce My Taxes?
When determining your income taxes in retirement and on your Social Security benefits, the IRS uses your “combined income” and filing status as the two main markers. At $36,000 a year from Social Security, none of your benefits would be taxable, since only half of your benefits are calculated into combined income. However most, if… read more…
- FIRE Blogs and Websites You Need to Know
The Financial Independence Retire Early (FIRE) movement has been gaining steam in recent years as more Americans look for ways to take control of their money and retire well before the traditional retirement age. With FIRE, the goal is to aggressively save and invest enough to be able to quit your regular job and maintain… read more…
- Retirement Strategies for Small Business Owners
Whether you just launched your small business or have been running your own shop for years, it’s no secret that the hard work never ends. This holds true for retirement planning as well, and doing so with time is crucial for success. Fortunately, there are different tax-advantaged options available, including retirement vehicles that you can… read more…
- I’m Selling My House and Netting $800k. Can I Avoid Taxes While Downsizing for Retirement?
When you sell a primary residence, the IRS allows you to exclude from your capital gains taxes the first $250,000 of profits if you file single or $500,000 of profits if you file jointly. You must include any surplus of those amounts in your taxable capital gains for the year, though. So, what if you… read more…
- The Cost of Living in a Retirement Community in Every State
Retirement living communities aim to fit needs of people age 55 and older, with amenities such as housekeeping, maintenance, organized activities and transportation to shopping, entertainment and medical appointments. Meals may also be included. Independent living communities are the most affordable level of senior housing options, but generally exclude nursing, custodial care, help with medications… read more…
- I’m 62 With $1 Million in a 401(k). Should I Convert $100,000 Per Year to a Roth IRA to Avoid RMDs?
Retirees with significant assets often have to plan around required minimum distributions (RMDs). If you already have sufficient income and don’t need the money in a pre-tax portfolio, annual RMDs can cost you significantly in otherwise-unnecessary taxes. For example, say that you have $1 million in a 401(k). The IRS could require you to withdraw… read more…
- We Are 65 With $1.9 Million in a 401(k) and IRA, and $5,200 Monthly From Social Security. What’s Our Retirement Budget?
To really build a complete retirement budget as a couple, you’ll need to take into account both potential income sources and realistic expenses. While it’s possible to come up with an estimated income or range of incomes from these figures, the expense side of the budget is equally important and potentially much more variable. Other… read more…
- The 5 Worst Retirement Mistakes to Avoid at All Costs
To do retirement right you need a disciplined savings plan, a good understanding of Social Security, a sound investment strategy and a vision of retirement that provides for adequate self-fulfillment without overspending your fixed-income budget. Behind those simple principles lies… read more…
- We’re 62 and Have $1.6 Million in Our 401(k)s. Should We Pivot to Roth Contributions?
By your early 60s, you’ll likely be paying close attention to your finances and retirement savings. This may include making crucial decisions on investment structure, risk tolerance, income needs and tax planning, among the many other moving parts of your financial life. A financial advisor can help you plan and save for retirement. Find a… read more…
- When Should I Take My First RMD?
You may not be thinking about required minimum distributions (RMDs) throughout your career, but chances are that they’ll be on your mind once you hit your 70s. RMDs are a critical part of retirement planning. A financial advisor can help you prepare for these mandatory withdrawals, which can have a significant impact on your taxes.… read more…
- This Is My First Year Taking Social Security. How Do I Reduce My Taxes on It?
As your first year of retirement progresses, it’s important to evaluate whether the financial plan you laid out to ensure your sustainable well-being is going according to plan. An appropriate plan should include tax calculations to understand how much of your income will truly be at your disposal for needs and wants. Some people may… read more…
- How to Save Money for Traveling During Retirement
Traveling during retirement is one of the main goals that a lot of people have as they think about what those years will look like. To travel the way you want, it’s important to make sure you’re saving enough money for retirement to help cover those travel costs on top of your regular retirement living… read more…