Posts by SmartAsset Team
Tax Filing
How to File for a Tax Extension in All 50 States
Filing a state tax extension can provide extra time to prepare and submit your state tax return if you miss the original deadline. While the IRS offers a fairly uniform process for federal tax extensions, the rules for state tax extensions vary widely. Some states automatically grant an extension if you file a federal extension.… read more…
Tax Filing
What Happens If You File an Extension But Owe Money?
Filing an extension can give you extra time to complete your tax return, typically pushing the deadline from April to October. But what happens if you file an extension but owe money? Filing an extension does not give you extra time to pay any taxes owed. If you may owe taxes but need more time… read more…
Tax Credits & Deductions
Can You Deduct Property Taxes on Your Tax Return?
When tax season rolls around, homeowners often wonder if property taxes are deductible on their tax returns. The answer is yes—you can deduct property taxes on your tax return. In fact, property tax deductions remain one of the valuable benefits of homeownership under current tax law. These deductions allow you to reduce your taxable income… read more…
Tax Planning
How Much Can You Inherit Without Paying Taxes?
An inheritance can offer helpful financial support, but it may also come with tax considerations. The taxes you might owe depend on the type of asset, federal and state laws, and the size of the inheritance. Most estates are not subject to federal estate tax because of the high exemption limit, but some states have… read more…
Investing for Beginners
Inflation vs. Stock Market: Can Your Portfolio Keep Up?
Inflation is an important factor in long-term investing. When prices and wages rise, it can hurt company profits and reduce spending, which may lower stock prices. But some companies, like those that can raise prices or sell commodities, may benefit. Because investors respond differently based on how inflation affects them and what they expect, it… read more…
Annuities
Annuities vs. Dividend Stocks: Taxes, Pros and Cons, Examples
Annuities and dividend-paying stocks work differently when it comes to income, taxes and risk. Annuities offer fixed or variable payments under a contract, often used for retirement. Dividend stocks pay income from company profits and may also grow in value. Which one works better depends on your needs for taxes, flexibility and risk. Whether you’re… read more…
Investing for Beginners
Stock Grant vs. Stock Option: Taxes, Pros and Cons, Examples
Equity compensation can take different forms, so it’s important to know the difference between stock grants and stock options. Stock grants give you shares up front, while stock options let you buy shares at a set price in the future. This difference affects how they’re taxed and the level of risk involved. A financial advisor… read more…
Retirement Planning
6 Reinvestment Options for Retirement Income
Many retirees receive distributions from retirement accounts, pensions, dividends or even part-time work. Should this income exceed immediate spending needs, retirees often look to put the excess back to work. Thoughtfully reinvesting surplus retirement income can help preserve wealth, protect against inflation and even grow your financial resources over time. However, the reinvestment options you… read more…
Social Security
What Happens to Your SSDI When Your Child Turns 18?
If you’re receiving Social Security Disability Insurance (SSDI), you may also receive additional benefits for a dependent child. But what happens to your SSDI when your child turns 18? Many parents rely on this supplemental income and want to understand how their child turning 18 will impact eligibility and benefits. Your SSDI benefit as a… read more…
Retirement Planning
What Percentage of a Retirement Portfolio Should Be in Cash?
Planning for retirement involves making a lot of decisions, including how to allocate your portfolio. Among stocks, bonds and other investments, many pre-retirees wonder what percent of a retirement portfolio should be in cash. Cash plays an important role in ensuring stability, accessibility and peace of mind. However, holding too much cash can also reduce… read more…
Pensions & Other Retirement Accounts
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…
Ask an Advisor
Advisor Advice: How Often Should I Follow Up With Prospects and How Should I Frame Those Conversations?
Written by Michael Collins, CFA® In today’s fast-paced world, getting the attention of potential clients isn’t easy, especially when connecting with someone over the phone. As you work to grow your client base, it’s not just about generating leads; it’s about making sure those leads actually respond and engage with you. Making monthly follow-ups with… read more…
Investing for Beginners
Nasdaq vs. S&P 500: Differences in Historical Performance
The Nasdaq Composite and S&P 500 are two major U.S. stock indexes historically used by many investors as benchmarks for performance. The Nasdaq, driven largely by tech and growth stocks, has averaged annual returns of well over 10% from its inception in 1971 through 2024. The S&P 500, which represents a more varied mix of… read more…
Retirement Planning
Bonds vs. Stocks in a 401(k): Which Should You Invest In?
Bonds and stocks each offer benefits, but they come with different levels of risk and return. A balanced mix can help build wealth while also reducing the impact of market swings, which is especially important as retirement approaches. The allocation for your 401(k) will depend on your age, risk tolerance, investment timeline and overall goals.… read more…
Retirement Planning
Stock Market vs. Bond Market: Which One Is Larger?
Stocks tend to dominate financial headlines due to their volatility and potential for rapid gains or losses. But, bonds also play an important role by providing investors with stability and income. Both markets are large, and their size can change depending on the economy, interest rates and investor behavior. Knowing how money moves between stocks… read more…
Investing for Beginners
Roth IRA vs. Stocks: What’s the Difference?
When planning your finances, it’s important to know the difference between a Roth IRA and stocks. A Roth IRA is a type of account that gives you tax benefits, while stocks are investments you can hold in that account. The Roth IRA lets your investments grow tax-free, and stocks are one kind of investment you… read more…
Investing for Beginners
ETF vs. Stock vs. Mutual Fund: What Are the Differences?
Exchange-traded funds (ETFs) combine features of both stocks and mutual funds, trading on exchanges throughout the day while offering diversification across multiple securities. Individual stocks, meanwhile, represent ownership in a single company, potentially offering higher returns but with increased risk. Mutual funds pool money from multiple investors to purchase a portfolio of securities, typically managed… read more…
Investing for Beginners
Stocks vs. Bonds vs. Mutual Funds: What Are the Differences?
Stocks, bonds and mutual funds are all common ways to invest, with the first two considered asset classes and the third an investment vehicle. Each of these options operates differently in terms of structure, returns and risk exposure. Stocks represent ownership in a company and can offer growth through capital appreciation, but with greater volatility.… read more…
Investment Taxes
Can You Buy into an ETF and Defer Taxes?
Exchange-traded funds (ETFs) can be tax-efficient investments, but they are not tax-free. You don’t owe taxes when you buy shares, but you may owe tax on dividends or capital gains if they occur. ETFs use a structure that helps reduce taxable events when compared with mutual funds, especially through the in-kind redemption process. However, taxes… read more…
Income Investing
How to Transition to Dividend Investing: Strategies & Examples
Switching to dividend-paying stocks can help you build long-term wealth and steady income. Unlike growth investing, which focuses on rising stock prices, dividend investing centers on companies that regularly pay out part of their profits to shareholders. This approach can offer both income now and growth over time, which may appeal to those nearing retirement… read more…
Social Security
5 Reasons You May Want to Take Social Security Early
Deciding when to claim Social Security can be one of the most important retirement decisions you’ll make. Delaying your benefits can result in higher monthly payments. But there are many reasons you might choose to take Social Security earlier — as soon as age 62. Early retirement, health concerns or a need for more income… read more…
Retirement Planning
Safe Withdrawal Rate By Age: How to Calculate
Planning how much to withdraw in retirement often starts with understanding the safe withdrawal rate by age. This concept helps retirees estimate how much they can spend each year without running out of money over time. While a 4% withdrawal rate has been a common benchmark, actual safe rates can vary depending on a retiree’s… read more…
401(k)
Can I Cash Out My 401(k) at Age 62? Pros and Cons
Cashing out a 401(k) at age 62 is allowed, but it comes with trade-offs many savers will want to consider. Withdrawals at this age avoid the 10% early withdrawal penalty, though income taxes still apply. Taking a lump sum of part of the account balance could offer immediate access to funds for retirement expenses or… read more…
Social Security
Maximum Social Security Benefit If You’re Born in 1958
If you were born in 1958, 2025 is a milestone year. You’ll be turning 67, which marks your full retirement age (FRA) for Social Security benefits. This means you’re eligible to claim your full Social Security retirement benefit without reductions for early claiming. Many individuals in your age group are evaluating when to start collecting… read more…
Pensions & Other Retirement Accounts
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…