Posts by SmartAsset Team
Retirement Planning
At What Age Can You Retire With $1 Million?
For many Americans, $1 million is the benchmark for a secure retirement. But in today’s economy, at what age you can retire with $1 million dollars will depend on a range of factors. These include lifestyle and expenses, your investment strategy and your withdrawal rate. You might find that it’s only enough for a more… read more…
Tax Planning
Inc. vs. LLC: Key Differences, Pros and Cons for Taxes
Choosing between a corporation (Inc.) and a limited liability company (LLC) affects how your business is taxed, how profits are shared and how much paperwork you need. While both LLCs and corporations can elect corporate tax treatment, corporations are structured by default as separate tax entities, which can make it easier to retain earnings (reinvest… read more…
Retirement Planning
How Much Should I Have in Retirement Savings at 55?
At 55, many people are about 10 years from retirement and may wonder how much they should have saved to support their desired lifestyle. Comparing your savings to different benchmarks can help guide your retirement decisions. And a financial advisor can work with you to assess your progress, identify gaps and adjust your plan to… read more…
Retirement Planning
How Much Should I Have in Retirement Savings at 35?
Reaching your mid-thirties is a milestone that can prompt you to reflect on your financial future, especially when it comes to retirement savings. At this age, you still have decades to grow your savings, but it’s not too early to make sure you’re on the right track. Industry-developed guidelines can give you a quick estimate… read more…
Advisor Basics
Can Any Person Serve as a Fiduciary? Eligibility Requirements
A fiduciary is someone responsible for acting in another person’s best interest, such as a trustee, guardian, financial advisor or executor of a will. Whether someone can serve as a fiduciary depends on the role, qualifications and any legal or institutional rules that apply. In many situations, a fiduciary does not need to hold a… read more…
Tax Planning
How to Minimize or Avoid Taxes on Your Venmo Transactions
Whether you are splitting a bill or selling handmade goods, the IRS may expect you to report certain payments. This is especially the case for business-related transactions. If you are using Venmo regularly, it is important to know when taxes apply, as well as how to minimize or avoid Venmo taxes. With recent updates to… read more…
401(k)
What Is the Average 401(k) Balance for Retirees?
For many Americans, the 401(k) is the cornerstone of their retirement savings strategy. Knowing where your 401(k) balance falls compared to others in your age range can help you determine whether you’re on track, ahead of the curve or falling behind when it comes to preparing for a comfortable and secure retirement. It can also… read more…
Retirement Planning
5 Safe Investments for Retirees: Types and Examples
After decades of building wealth, retirees often prioritize preserving capital, generating steady income and reducing exposure to market volatility. So what are the safest investments for retirees? From government-backed securities to insured bank products, these lower-risk investments can serve as the financial foundation of a retirement portfolio. Here are five safe investments for retirees. How… read more…
Tax Policy
ISOs vs. NSOs: How Are They Taxed Differently?
When comparing ISOs vs. NSOs, the biggest differences come down to how each is taxed and who can receive them. Employees often receive incentive stock options (ISOs), which can receive preferential tax treatment when specific holding periods are satisfied. Non-statutory stock options (NSOs), on the other hand, trigger ordinary income tax at exercise. Understanding these… read more…
Social Security
7 Things to Know About Social Security Survivor Benefits
Social Security is not just a benefits program for retired workers. It also provides essential support to nearly 5.8 million survivors of deceased workers each month. The benefits can help replace lost income and maintain financial stability during an incredibly challenging time. Eligibility depends on how long the deceased worked and your relationship to them.… read more…
Retirement Planning
Do Retirees Need an Umbrella Insurance Policy?
Umbrella insurance serves as supplemental liability coverage that activates when your standard policies reach their limits. Retirees often find this coverage valuable, especially if they have accumulated substantial assets and face unique risk factors. A serious auto accident, injury on your property or defamation lawsuit could quickly wipe out retirement savings without enough coverage. That… read more…
Retirement Planning
Is $2 Million Enough for a Couple to Retire?
Approaching retirement with $2 million in savings puts many couples in a strong financial position. But is $2 million enough for you and your spouse to retire comfortably? That answer depends on lifestyle, health, income needs and how long you expect retirement to last. While $2 million covers retirement for some couples, it may not… read more…
Investing for Beginners
Paid-In Capital: Definition, Calculation and Where to Find
When companies issue stock to raise money, the funds they receive form part of their financial structure, categorized as paid-in capital. This is the total amount investors have contributed in exchange for equity. Unlike retained earnings, which accumulate from business operations over time, paid-in capital specifically tracks the money that shareholders have invested in the… read more…
Investing for Beginners
What Is a Quoted Price and What Does It Tell Investors?
A quoted price is the current market value at which a security, commodity or financial instrument can be bought or sold in real time. For investors, this figure acts as a snapshot of supply and demand dynamics, reflecting what buyers are willing to pay (bid price) and what sellers are asking (ask price) at any… read more…
Raising Capital
Asset Sale vs. Stock Sale for Business Purchases and M&A
When a business is purchased, acquired or merged with another company, the transaction may be set up as an asset sale or a stock sale. The choice between these two options can significantly affect the deal’s structure, tax outcomes and post-sale responsibilities for both parties. Asset sales typically involve the transfer of selected assets and… read more…
Retirement Planning
How to Live Off of Dividend Income as a Retiree
Many retirees live off dividend income because dividends from strong companies can grow over time. While annuities and bond funds don’t offer rising income like dividends do, they can still be part of a retirement plan. Careful planning, diversification and risk management are key for making this work. If you need help building a well-balanced… read more…
Real Estate
Is Rental Income Considered Active or Passive?
The IRS typically considers rental income passive income because investment properties don’t require day-to-day management. There are, however, exceptions, and the level of participation can alter this classification. This makes it important to determine whether your rental income falls under active or passive income for tax planning and compliance. If you’re planning to expand your… read more…
Retirement Planning
7 Fixed-Income Investments for Retirees to Consider
As retirement gets closer, many investors focus more on protecting their money than growing it. Fixed-income investments can help by providing steady interest payments and reducing stock market risk. With the right strategy, these investments can help cover living costs, lower risk and add to Social Security or pension income. A financial advisor can help… read more…
Retirement Planning
5 Investments for Retirees and Examples of Portfolios
Choosing investments for retirement means finding the right balance between safety and growth. You want a mix that can handle market ups and downs while giving you steady income. Since there’s no one right answer, a financial advisor can help you build a plan that fits your goals, risk level and income needs. 5 Investments… read more…
Retirement Planning
How Much Money Is Needed to Retire at Age 60?
If you plan to retire at 60, you’ll need a clear picture of your future expenses and a solid plan. Because 60 is earlier than most benefit eligibility ages, you’ll need extra savings to cover the gap. The amount needed varies significantly based on your lifestyle expectations, health considerations and location. Some experts suggest saving… read more…
HELOCs & Equity
Guide to Home Equity Investment: Pros and Cons
A home equity investment lets you access your home’s value without taking on new debt. It differs from traditional loans by offering cash with no interest charges or monthly payments. Homeowners typically repay the company when they sell the home or reach the end of the agreement. This can be an attractive option for unlocking… read more…
Tax Planning
5 Ways Billionaires Avoid Taxes: Strategies and Examples
Billionaires often avoid taxes using legal frameworks, advanced planning, and strategic investments. While their strategies can be complex, some of the same tactics are available—and legal—for everyday taxpayers, just on a smaller scale. From investing in real estate to borrowing against their assets, these methods may offer insight into effective tax management. Here’s a closer… read more…
Income Investing
How to Invest $1 Million for Monthly Income
Learning how to invest $1 million for monthly income starts with understanding the tradeoffs between yield, risk and liquidity. The more you prioritize one feature, the more it may affect the others. Investors can tailor their strategies to reflect their own objectives and preferences. The right approach often depends on your time horizon, tax situation… read more…
Retirement Planning
Is $400,000 Enough to Retire at 65?
Whether $400,000 is enough to retire at 65 depends on your expenses, other income sources and how long you expect to live. There is no hard and fast answer that is accurate for all situations. For someone with modest expenses and full Social Security benefits, it may be possible to make $400,000 last. But without… read more…
Social Security
Can Rental Income Affect Your Social Security Benefits?
Social Security benefits provide essential income for millions of Americans. However, there can be a reduction in benefits if your total income exceeds certain thresholds. Many retirees use rental income to supplement their retirement, but it interacts with Social Security differently than wages or self-employment income. Unlike wages from a job, the Social Security Administration… read more…