- How to Max Out Your 401(k)
Approximately 86% of 401(k) participants don’t save the maximum allowed amount in their tax-advantaged employer-sponsored retirement plans, according to a 2022 study of retirement saving by Vanguard. If you’d like to max out 401(k) savings, techniques include automating contributions, increasing contributions over time, using catch-up contributions when available, taking full advantage of any employer matches,… read more…
- The Average Retirement Budget in the U.S.
When it comes to the average retirement budget, studies report a wide range of responses. A 2022 survey by the Employee Benefit and Retirement Institute (EBRI) found that half of individuals around retirement age spend less than $2,000 per month, equal to less than $24,000 per year. The Social Security Administration, meanwhile, said 2020 median… read more…
- 7 Alternative Ways to Save for Retirement
401(k) plans are not the only way to save for retirement. If your employer is one of the many that doesn’t offer a 401(k) savings plan, there are still plenty of alternatives to save for retirement. Your non-401(k) options include both traditional and Roth individual retirement savings accounts (IRAs), as well as health savings accounts… read more…
- Should I Take a $200,000 Lump Sum or $1,850 Monthly Payments for My Pension?
If you have a pension, your employer will usually give you a choice at retirement: buyout or payments. It’s important to review this carefully. In broad terms, many make this choice based on expected lifetime returns. If you take and invest the buyout, what can you reasonably expect in portfolio returns? How will that expectation… read more…
- I’m 64 With $650k in an IRA. Should I Start Converting to a Roth to Avoid RMDs?
You can reduce the impact that taxes have in retirement by converting pre-tax savings into Roth assets. Doing so not only unlocks future tax-free growth, but also helps you minimize or avoid required minimum distributions (RMDs). However, converting a large IRA balance like $650,000 all at once would trigger a significant tax bill in the… read more…
- 6 Strategies to Protect Your Retirement Income
Retirement planning aims to ensure a steady stream of income that could sustain your lifestyle after leaving the workforce. To protect your retirement income you first need to have a clear idea of the different sources that will be available for your retirement, such as Social Security or your own personal investments. You would then implement… read more…
- I’m 65 With $800k in an IRA. Should I Convert $100,000 Per Year to a Roth to Avoid RMDs?
Converting to a Roth IRA can be tricky business. For the right household, this is an excellent way to save money on retirement taxes. A Roth portfolio generates untaxed income, letting you keep more of your portfolio and Social Security. It also has no required minimum distributions (RMDs), maximizing your financial flexibility. But remember that… read more…
- Is a Roth IRA a Qualified Retirement Plan?
The Roth IRA stands out among other types of retirement accounts due to its unique tax advantages and withdrawal rules. But is a Roth IRA a qualified retirement plan? While Roth IRAs offer significant benefits and are regulated by the IRS, they do not meet the technical definition of a qualified retirement plan, such as… read more…
- Retirement Planning Strategies for Teachers
Many teachers in the U.S. retire with pensions that provide a stable source of income during their golden years, but that doesn’t mean they can ignore retirement planning. In fact, teachers face unique retirement challenges, including the absence of Social Security benefits in some states. Education retirement planning requires a tailored strategy to optimize a… read more…
- 6 Ways to Maximize Your Social Security Survivor Benefits
Social Security survivor benefits provide essential financial support to eligible family members and help ensure stability during challenging times. Many people don’t realize that survivor benefits have different rules from regular retirement benefits. Timing your claim, coordinating with your benefits, and understanding eligibility requirements can significantly impact the amount you receive each month. Making informed… read more…
- Investment Options for Your IRA
When planning for retirement, one of the fundamental decisions you’ll face is how to invest within your individual retirement account (IRA). There are several approaches to selecting investments and managing your account. You could pick individual securities yourself, employ a robo-advisor or work with a financial advisor to construct your portfolio. From there, you can… read more…
- I’m Going to Get $2,500 per Month From Social Security. How Can I Reduce My Taxes?
Taxes can be a big concern in retirement because no matter how well you’ve saved and invested during your working years your challenge is to keep as much of it as possible. That means structuring your finances, withdrawals and income in a way that minimizes how much you fork over to the IRS. Take Social… read more…
- We’re 60, Have $1.3 Million in 401(k)s and Will Receive $5,100 Monthly From Social Security. What’s Our Retirement Budget?
At its most basic, creating a retirement budget is all about money in vs. money out. You figure out what kind of income you can reliably generate from your combined assets, then compare it against your household spending. If income surpasses spending, you’re set. If not, you need to make some adjustments. Need help creating… read more…
- I Have $640k in an IRA and Will Get $1,900 in Social Security. Can I Retire at 65?
How old are you? When it comes to evaluating your retirement options, this might be the single most important question in finance. Your age will determine how close you are to needing this money which, in turn, will change almost everything about how you evaluate your taxes, returns and other options. For example, say that… read more…
- Rollover IRA vs. Roth IRA
With a rollover IRA, you transfer money from a 401(k) or other employer-sponsored account into a new individual retirement account. You can structure this account as a traditional IRA or a Roth IRA based on your preferences. A Roth IRA, on the other hand, is a type of individual retirement account. With a Roth IRA,… read more…
- Understanding Safe Harbor 401(k) Rules for Matching
The safe harbor 401(k) is a retirement savings plan that satisfies IRS non-discrimination tests while promoting equitable employer matching contributions. As an employer, you may opt for a safe harbor plan to simplify administration, ensure compliance with nondiscrimination testing requirements, and provide employees with predictable retirement benefits. As an employee, you may want to contribute… read more…
- Is It Wise to Convert 20% of My 401(k) into a Roth IRA Each Year to Avoid Taxes and RMDs?
With retirement planning and taxes, there are often two ways to look at a question: First, can you do something, and then, should you do it? For example, let’s say we have a household planning for retirement. Would it be wise for them to convert their 401(k) into a Roth IRA 20% at a time… read more…
- Should I Take a $150,000 Lump Sum or $1,200 Monthly Payments for My Pension?
When companies offer a pension, it’s common to give retirees two options: collect the pension as a lifetime monthly payment or receive it as a lump sum at retirement. Monthly payments over time are the format that most people associate with pensions. However, a lump sum payment can, sometimes, be the better option. Depending on… read more…
- Amount of Retirement Savings By Gender
Men and women save for retirement differently. There’s a persistent and significant gender gap in the average retirement savings women have versus men, with women more likely to have nothing saved for retirement while men are over-represented among savers with the largest retirement account balances. Men and women have similar access to retirement savings plans,… read more…
- How Much Should I Have Saved By Age 45?
Reaching your mid-40s often brings a heightened awareness of retirement planning and financial security. As you approach this significant milestone, you might find yourself wondering: How much should I have saved by age 45? While there’s no one-size-fits-all answer, financial experts typically suggest having about four times your annual salary tucked away by this age.… read more…
- How Getting Married Impacts Your Roth IRA
Getting married does not automatically impact your Roth IRA. Your portfolio and its tax status are unaffected by your marital status. However, in some situations, getting married can make you income-ineligible for Roth contributions. Additionally, getting married can mean making different plans around your Roth IRA. Here’s what you need to know. If you and… read more…
- How to Invest in a Socially Responsible Roth IRA
Environmental, Social and Governance, or “ESG,” investing is getting bigger. According to a 2022 analysis from PricewaterhouseCoopers (PWC), “with a projected compound annual growth rate (CARG) of 12.9%, ESG assets are on pace to constitute 21.5% of total global [assets under management] in less than five years.” And, while one-fifth of all global investments seems improbably… read more…
- How Can I Reduce the Amount of My RMD Payments?
In the year that a required minimum distribution (RMD) is due from a 401(k), IRA or other pre-tax retirement account, you’re required to withdraw a certain amount and pay your taxes due to avoid a 50% penalty. But that doesn’t mean there’s nothing you can do about this, and the associated taxes. With proper planning,… read more…
- I’m 65 and Retiring Soon. How Should I Structure My $1.1 Million Portfolio?
Your financial objectives and risk tolerance will primarily dictate how you structure your portfolio. But you’ll also want to consider taxes and fees, your potential lifespan, need for long-term care and desire to leave an inheritance behind. A financial advisor can help you identify the right portfolio construction strategy for your situation. Connect with a… read more…
- What Should I Do with My Roth IRA Once I Retire?
Retirement typically means shifting your focus from diligently saving your money over the course of years and decades to managing those funds and spending them responsibly. To learn about all the options for handling your Roth IRA in retirement, talk to a financial advisor. If you have a Roth IRA, you have several options for… read more…