Posts by SmartAsset Team
Financial Planning
How to Get a Loan If You Have High Debt-to-Income Ratio
Applying for a loan can be challenging, particularly if a significant share of your income already goes toward debt. Lenders evaluate your debt-to-income (DTI) ratio to measure repayment capacity, and a high DTI may limit your borrowing options. However, it does not automatically disqualify you. Understanding how lenders interpret your DTI and reviewing strategies to… read more…
Retirement Planning
How to Build a Retirement Portfolio at Age 70
At age 70, retirement is no longer a distant goal—it’s your current reality. Whether you’re newly retired or reevaluating your strategy, this is an important time to ensure your savings last. While there is no single best retirement portfolio for a 70-year-old, building a portfolio that suits your needs involves prioritizing income, minimizing risk and… read more…
401(k)
Are Part-Time Employees Eligible for 401(k)s?
For years, many part-time workers were excluded from 401(k) participation, leaving them with fewer ways to save through an employer. As flexible schedules and gig work have become more common, this gap has affected a growing share of the workforce. Recent federal law changes now expand access to employer-sponsored retirement plans, allowing more part-time employees… read more…
401(k)
Can You Change Your 401(k) Contribution at Any Time?
Your 401(k) plays a key role in helping you save for retirement, but life events can affect how much you’re able to contribute. A raise, job change, or unexpected expense might lead you to consider adjusting your contributions. Many employer-sponsored plans allow changes throughout the year, though specific rules and timing vary by plan provider.… read more…
Retirement Planning
What to Do Six Months Before Retirement: Checklist
The final six months before retirement are some of the most important. During this window, you’ll want to fine-tune your income plan. This means you should assess your tax exposure, make sure your investment mix supports your goals and double-check your paperwork. Even if you’ve been planning for years, the last stretch before retirement is… read more…
Financial Planning
Financial Advisor for Roth IRA: Services and Examples
A financial advisor for a Roth IRA can provide guidance on contribution strategies, investment selection and long-term tax planning. Because Roth IRAs grow tax-free and qualified withdrawals are also tax-free, how the account is managed over time can make a significant difference. Advisors often help clients decide between traditional and Roth accounts, choose diversified investments… read more…
Financial Planning
Financial Advisor for Bankruptcy: Services and Examples
Bankruptcy is not a common niche for financial advisors, but many advisors offer support to clients who are rebuilding after a filing. Rather than focusing solely on bankruptcy, they usually include this guidance as part of a broader financial planning approach. Advisors can help design budgets, prioritize debt repayment and develop long-term strategies for financial… read more…
Pensions & Other Retirement Accounts
Can a Child Collect the Pension of a Deceased Parent?
When a parent passes away, one of the biggest financial questions families face is whether their children can receive any of their parent’s pension benefits. Unlike life insurance or retirement accounts, pensions have stricter rules that often limit who can inherit them, and children are rarely at the top of the list. Still, there are… read more…
401(k)
Should You Take a 401(k) Loan for Home Improvement?
Using a 401(k) loan for home improvement may feel like an easy solution to unexpected expenses. After all, you’re borrowing from yourself. There’s no credit check, and the interest you pay goes back into your retirement account. While the convenience may be appealing, the long-term financial trade-offs deserve your consideration. A 401(k) loan can impact… read more…
401(k)
Can I Cash Out My 401(k) While Still Employed?
While some retirement plans allow in-service withdrawals, most discourage early access with penalties, taxes and missed growth potential. Before making a move that could undermine your long-term retirement goals, it helps to know the rules. A financial advisor can help you balance today’s needs with your long-term retirement goals. Can You Cash Out a 401(k)… read more…
401(k)
What Happens If You Default on a 401(k) Loan?
If you default on a 401(k) loan, the balance is usually treated as a taxable distribution. This may result in income taxes and, if you are under 59½, a 10% early withdrawal penalty. It can also reduce the amount you have available for retirement in the future. A financial advisor can review your situation and… read more…
401(k)
How to Repay a 401(k) Loan After Leaving a Job
Unlike traditional loans, a 401(k) loan is tied to your employer-sponsored retirement plan. That means your repayment options and timeline may change significantly once you are no longer with the company. If you fail to repay the loan within the specified period, it could be treated as a taxable distribution, potentially subjecting you to income… read more…
Retirement Taxes
How to Avoid Taxes on a 457(b) Withdrawal: Strategies and Examples
Planning how and when to withdraw money from your retirement accounts can have a big impact on how much of your savings you actually get to keep. This is especially true with 457(b) plans, which are common for public sector employees. While these accounts offer unique flexibility when compared with other retirement plans, they also… read more…
Retirement Planning
Can You Max Out a 401(k) and an IRA? Strategies for Both
Combining a 401(k) from work with an IRA can help you grow savings faster and give you more options for retirement planning. Contributing to both could grow your retirement savings by combining tax-deferred and tax-free advantages. A 401(k) typically provides employer matching, while an IRA offers wider investment flexibility. Together, they support diversification, enhance tax… read more…
Financial Planning
Financial Advisor for 529 Plan: Services and Examples
A financial advisor can help families save for education using 529 plans and align education planning with their broader financial goals. A 529 plan is a tax-advantaged account, where money grows and is withdrawable for qualified education expenses without federal income tax. While many people open and fund these plans on their own, a financial… read more…
Advisor Basics
Financial Advisor for Stock Market: Services and Examples
A financial advisor can helps individuals understand different investment options within the stock market, manage portfolios and align strategies with personal goals. These professionals may guide clients on selecting individual stocks, exchange-traded funds (ETFs) or broader equity strategies depending on risk tolerance and time horizon. By analyzing market conditions and company fundamentals, they can provide… read more…
Retirement Planning
CD vs. Roth IRA: Which Should You Invest in for Retirement?
Certificates of deposit (CDs) and Roth IRAs play different roles in retirement planning. CDs provide fixed interest and are federally insured, which can make them attractive if your priority is safety and predictable returns. A Roth IRA, by comparison, offers the opportunity for long-term, tax-free growth and withdrawals, giving you more flexibility and potential upside.… read more…
Pensions & Other Retirement Accounts
Annuity vs. Roth IRA: Pros and Cons for Retirement Income
When planning for retirement, one of the biggest decisions you’ll face is how to generate consistent, tax-efficient income. Two common options, annuities and Roth IRAs, serve very different purposes, but can both play a key role in your strategy. A Roth IRA offers tax-free growth and withdrawals in retirement, while an annuity can provide guaranteed… read more…
Retirement Planning
When and How to Consolidate 401(k) Accounts
Managing multiple 401(k) accounts from past employers involves tracking different fees, investment options, and statements. Consolidating these accounts can simplify monitoring, reduce costs and keep investments aligned with retirement goals. A financial advisor can help you evaluate consolidation options and determine a strategy for your retirement savings. Ways to Consolidate Your 401(k) Accounts When consolidating… read more…
Investing for Beginners
CD vs. Treasury Bills: Pros and Cons for Your Portfolio
Both certificates of deposit and Treasury bills are considered safe, short-term savings vehicles. However, the two differ in yield, liquidity, taxation and flexibility. While CDs may offer higher yields from banks or credit unions, T-bills come with the backing of the U.S. government. If you are interested in adding CDs and Treasury bills to your portfolio,… read more…
Income Investing
High-Yield Dividend Stocks for Retirement Investing: Tips and Examples
Planning for retirement involves balancing the need for steady income with the goal of maintaining and growing savings. Dividend-paying stocks may provide regular cash distributions along with the possibility of long-term growth. These investments also carry risks, so they are generally considered as one of several investment strategies that can be used in building a… read more…
Retirement Planning
How to Use Dividend Investments for Early Retirement: Examples
Retiring early is possible for many people, but it requires smart planning and reliable income sources. Dividend-paying investments offer one path by providing consistent cash flow while still allowing your portfolio to grow. By reinvesting dividends during your working years and later using them to cover living expenses, you can bridge the gap to early… read more…
Retirement Planning
How Much Do You Lose By Retiring at 62? Benchmarks and Examples
How much you can lose by retiring at 62 depends on Social Security, savings growth, and pensions. Starting Social Security at 62 usually cuts monthly benefits by 25% to 30% compared to waiting until full retirement age. Retiring early also means fewer years to save and less time for investments to grow. Pension checks may… read more…
Retirement Planning
Mega Backdoor Roth vs. Backdoor Roth: Benefits and Limits
High earners often weigh the mega backdoor Roth against the backdoor Roth to expand tax-free growth. A backdoor Roth works by making a nondeductible traditional IRA contribution and then converting it to a Roth. A mega backdoor Roth, on the other hand, uses after-tax 401(k) contributions that are later converted in-plan or rolled to a… read more…
Portfolio Management
Hedging vs. Speculation: Strategies, Risks and Benefits
Hedging aims to reduce risk from market drops, interest rate hikes, or currency changes by taking offsetting positions. Speculation, by comparison, focuses on profit from price moves and catalysts but involves more volatility and sometimes leverage. If you’re weighing how much of your portfolio should focus on either strategy, a financial advisor can help you… read more…