- Is It Wise to Convert 20% of My IRA to a Roth Each Year to Avoid Taxes and RMDs?
Transferring funds from a pre-tax retirement account such as an IRA to an after-tax Roth IRA is a move many retirement savers might want to consider. A Roth conversion, as the move is called, has many benefits. It can help you avoid required minimum distributions, or RMDs, in retirement, as well as taxes on your… read more…
- Understanding 401(k) Contribution Errors
Correcting 401(k) contribution errors involves identifying the mistake, adjusting future contributions and potentially making retroactive corrections to comply with IRS limits and plan rules. If you discover that you have over-contributed, the first step is to notify your plan administrator. If you need help with your retirement plan, a financial advisor can work with you… read more…
- Differences of Direct vs. Indirect Rollovers
Managing retirement savings effectively often involves rollovers, which allow investors to move funds from one retirement account to another without incurring taxes or penalties. In a direct rollover, the funds are transferred directly between accounts, while an indirect rollover requires the account holder to receive the funds before depositing them into a new retirement account.… read more…
- 401(k) Deferral Deposit Deadlines
Late 401(k) contributions can potentially lead to penalties and missed investment opportunities. Employers must adhere to strict deposit deadlines to comply with IRS regulations and ensure employees’ retirement savings grow as intended. Understanding these deadlines and the consequences of missing them is essential for both employers and employees to maintain the tax advantages associated with… read more…
- Roth TSP vs. Roth IRA
Both Roth thrift savings plans (TSPs) and Roth individual retirement accounts (IRAs) can offer significant tax advantages and the potential for tax-free growth, but they cater to different needs and circumstances. Understanding the differences between them can help you make an informed decision about which can be better suited for your retirement strategy. If you… read more…
- What Retirement Accounts Can Be Held Jointly?
While bank accounts and many other financial accounts can be jointly owned, retirement accounts like IRAs and 401(k)s are inherently individual. That means each person must open and maintain their own retirement account. The IRS does not permit sharing these accounts between spouses or any other individuals. Spousal IRAs represent an exception that allows a… read more…
- How Much Does a Roth Conversion Cost in Florida?
When you make a Roth conversion, the costs will depend on where you live. Converting money to a Roth IRA has a major upside, and a major downside. The benefit is tax-free portfolio growth and income. When you withdraw money from a Roth account in retirement, it will be untaxed and will not apply to… read more…
- IRS Grants Retirement Account Holders Ability to Withdraw $1,000 for Urgent Needs
It is easier to take up to $1,000 out of retirement plan savings to help with an emergency under a new rule from the Internal Revenue Service. The IRS announcement clarifies a 2022 law that aimed to reduce paperwork, costs and delays when savers tap retirement funds to cover unexpected expenses. Previously, withdrawing retirement funds… read more…
- How to Make Your Own Retirement Income Distribution Plan
Creating a retirement income distribution plan involves managing your savings and investments to generate a steady stream of income throughout your retirement. Making a retirement income distribution plan can give you peace of mind and help you avoid the risk of outliving your savings. The goal is to balance income needs, investment growth and tax… read more…
- 11 Financial Planning Tips for Seniors
As you age, your financial priorities can shift to focus more on preserving wealth, ensuring a steady income stream and covering healthcare costs. As a senior, effective financial planning can help you maintain the lifestyle you desire without worrying about running out of money. A plan can also allow you to navigate the uncertainties of… read more…
- How Do Retirees Make Money?
Retirement is a time when individuals finally have the opportunity to devote their lives to leisure. However, it also means transitioning from a steady paycheck to a fixed income, which can be challenging. And you may need to find ways to sustain your lifestyle. Retirees can use different strategies to generate income, ranging from traditional… read more…
- I’m 62 With $425k in a Roth IRA and $2,600 per Month between Social Security and Pension. Can I Retire Now?
For many people, early retirement means 62. This is the age they can start withdrawing money from their retirement accounts and receive Social Security. For example, let’s assume an individual with $425,000 in a Roth IRA, a $1,000 monthly pension, and expect $1,600 in Social Security. Is it going to be enough? As often in… read more…
- Will the 2025 Social Security COLA Affect Future Retirees?
The 2025 Social Security cost-of-living adjustment (COLA) could influence future retirees by preserving the purchasing power of their benefits. COLA adjustments are designed to counteract inflation, ensuring that the primary insurance amount (PIA) reflects current economic conditions. For those delaying retirement, the benefits of COLA compound with delayed retirement credits, potentially leading to substantially higher… read more…
- 5 Budgeting Strategies to Help You Save More for Retirement
Saving for retirement can be challenging, but learning how to effectively budget money can make a significant difference. While you cannot change what has already been spent or saved, you do have control over your financial decisions moving forward. By focusing on the present and setting a clear plan, you can begin to make substantial… read more…
- Medicare Premiums: What You Should Expect to Pay in 2024
Medicare isn’t free. This catches many retirees by surprise. Medicare has a reputation for simplicity. You turn 65 and get access to free universal health insurance. This is true to a certain degree, and that’s one of the reasons the program is overwhelmingly popular among recipients. However, in practice, Medicare has many carve-outs and exceptions.… read more…
- How Many Hours Can You Work After You Retire?
While there’s no universal cap on post-retirement work hours, the number can impact Social Security benefits and taxes, depending on your age and earnings. Retirees under the full retirement age may see a temporary reduction in benefits if their income exceeds certain limits. Social Security recipients, in particular, need to be aware of specific earnings limits… read more…
- Can You Retire and Still Work a Job?
If you are close to retiring, you may be wondering whether you can retire and still work a job. This is commonly referred to as “working in retirement,” and you may consider this option to supplement your income, stay active, maintain a sense of purpose, or pursue a passion. However, you will also need to… read more…
- We’re 66 With $715k in 401(k)s and $2,700 Social Security Between Us. What’s Our Retirement Budget?
Making a retirement budget calls for considering not only income but also expenses. With $2,700 monthly from Social Security and $715,000 in 401(k) accounts invested and distributed conservatively, a couple may be able to expect about $61,000 in annual income. This is close to the annual expense level reported by the average retiree. However, individual… read more…
- 10 Reasons You May Want to Retire Early
Picking the right time to retire is one of the most important parts of the equation, second only to building the right savings plan. Leave work too early, and you could outrun your savings; wait too long, and you could outwork your good health. Part of this decision is what “early” means to you. Will… read more…
- Can I Collect My Spouse’s Social Security Before They Retire?
Yes, you can collect your spouse’s Social Security benefits before they retire. But there are specific conditions and limitations to consider. The primary requirement is that your spouse must be eligible for retirement benefits and have filed for them. If you are at least 62 years old, you may qualify for spousal benefits, which can… read more…
- I Left My Job 6 Months Ago. What Do I Do With My 401(k)?
After leaving a job where they contributed to a 401(k), retirement savers typically have four choices about what to do with the funds in the plan. They can roll the funds into an employer-sponsored retirement savings plan at a new job, rollover into an IRA, leave the funds where they are or cash out the… 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…
- How to Stay Socially Active as a Retiree
Retirement can be an exciting new chapter, offering ample opportunities to stay socially active. Engaging in community activities, joining clubs and pursuing hobbies can significantly enhance your social life. Whether it’s volunteering, participating in fitness classes or attending local events, finding ways to stay socially active in retirement is important for maintaining a fulfilling and… read more…
- Does Workers’ Compensation Affect Social Security Benefits?
Workers’ compensation, which provides financial support for employees injured on the job, can impact the amount you receive from Social Security. Specifically, if you’re receiving workers’ comp, your Social Security Disability Insurance (SSDI) benefits might be reduced to prevent your combined income from exceeding certain limits. This interaction is designed to balance the benefits you… read more…
- When to Start Saving for Retirement
Determining when to start saving for retirement can have a major impact on your financial future. Beginning early allows you to take full advantage of compound interest, which is when you earn money on both your savings and the interest you’ve already earned. Starting to save in your 20s or 30s provides a longer time… read more…