- Is $2.5 Million Enough to Retire at 60?
With careful planning, $2.5 million can fund a comfortable retirement starting at age 60. But as with any major life transition, retirees must weigh a complex set of variables from taxes to healthcare to ensure their nest egg lasts decades. Though everyone’s situation differs, this level of savings can provide most the flexibility to retire… read more…
- I Have $640k in a 401(k). How Do I Avoid Paying Taxes When Converting to a Roth IRA?
Converting a 401(k) to a Roth IRA can potentially provide valuable long-term benefits, but it also triggers a tax bill that you’ll need to plan for. While the taxes on a Roth conversion can’t be avoided, savers can reduce the burden through several strategies like gradual conversions and timing adjustments. Those nearing retirement can weigh… read more…
- This Proposed Roth IRA Rollover Legislation Could Revolutionize Roth Retirement Savings Accounts
Workers with their own personal Roth IRAs would be able to roll those accounts into a workplace Roth 401(k) and some similar accounts under legislation recently introduced in the House of Representatives by two of its members. These other accounts types could include 403(b)s and 457(b)s. If signed into law, this proposal could change the… read more…
- I’m 62 and Retiring Soon. How Should I Structure My Portfolio?
For many people, retiring feels like crossing a finish line. You have spent your working years building wealth, and now it’s time to manage and spend that money. By and large, this is true – your financial perspective will change significantly once you no longer have a normal stream of income. However, it’s important to… read more…
- I’m 65 Years Old With $750k in an IRA. I’m Taking Social Security – Is It Too Late for a Roth Conversion?
If you’re 65 years old and collecting Social Security, you may wonder if it’s too late to convert your $750,000 traditional IRA into a Roth IRA. The short answer is no – there are no legal restrictions to Roth conversion based on age or income. Practically, however, the decision involves carefully weighing tax implications, healthcare… read more…
- Types of Annuities to Consider for Retirement
Annuities can provide retirees with a guaranteed stream of income, but choosing the right type is key to making the most of these products. Making the selection requires learning about the major features of the types of annuities most popular for retirement planning. It’s also essential to get an understanding your own needs for financial… read more…
- I’m 60 With $1.2 Million in an IRA. Should I Convert $120,000 Per Year to a Roth to Avoid RMDs?
If you’re 60 years old with $1.2 million saved for retirement in a traditional IRA, you may be starting to think about required minimum distributions (RMDs) and the hefty annual tax bill they can create once you turn 73. Converting a portion of your IRA to a Roth IRA each year can help you reduce… read more…
- I Have to Take RMDs, But Don’t Need the Money Yet. What Can I Do With It?
While many retirement accounts offer tax-sheltered ways to save and invest, the IRS mandates accountholders start withdrawing money at a certain point. This takes the form of required minimum distributions (RMDs). Required minimum distributions currently start at age 73 for many retirement accounts. It’s not uncommon to reach an age when the IRS requires you… read more…
- Study Shows Major Differences in How People and Their Employers View Their Retirement Readiness
The bosses who sponsor retirement investment plans think their employees are well prepared for retirement. However, many of those workers don’t feel the same way. This difference in opinion could cause a disparity on the decision-making side of employee retirement account management. Do you have questions about building a retirement plan? Speak with a financial… read more…
- What Is Rule 72(t) and How Does It Work?
Accessing your retirement funds before age 59½ typically comes with a hefty 10% early withdrawal penalty. However, Rule 72(t) offers a potential exception that many retirement savers don’t fully understand. This IRS provision, formally known as Section 72(t) of the Internal Revenue Code, provides a pathway to penalty-free early withdrawals from retirement accounts under specific… read more…
- The Equivalent of One-Third of My Monthly Retirement Contributions Gets Eaten Up by Fees. Am I Getting Ripped Off?
Paying fees is part of being an investor, as everything from mutual fund investing to a personal financial advisor can cost you. However, it’s also important to periodically review the fees you’re paying to ensure you’re not doing any long-term harm to your returns. For instance, depending on the size of your 401(k) or IRA,… read more…
- How Long a 401(k) Rollover Takes
Starting a new job is an exciting prospect – both for your career and your retirement plan. And taking your 401(k) with you means transferring the funds to a new account, such as another 401(k) or an IRA. However, penalties loom for transfers that take longer than 60 days. The timing of a 401(k) rollover… read more…
- Is $500 Per Month Too Much for Long-Term Care Insurance?
How much should you pay for long-term care insurance? Let’s say you’ve been offered a policy for $500 per month, or $6,000 per year. While the results will vary widely based on your health, age, gender and household size, for most individual policies, this would be expensive. However, it really depends on your personal circumstances.… read more…
- I’m 75 and Still Working. Can I Avoid Taking RMDs?
Required minimum distributions, or “RMDs,” are the government’s way of getting its tax money back on retirement accounts. Starting at age 73, anyone with a pre-tax retirement account such as an IRA or a 401(k), must begin must begin withdrawing a minimum amount from this account each year. This triggers a tax event, generating the income… read more…
- Should I Delay Social Security and Rely on My IRA for the Next 5 Years? I Have $500k and a Pension.
With $500,000 in an IRA and a pension, you may not need to immediately claim Social Security at age 62. By waiting until full retirement age at 67 or even 70, you can increase your monthly benefit by up to 24%. However, delaying Social Security means fewer cumulative checks over what could be a decades-long… read more…
- Differences to Consider Between Retirement and Estate Planning
While retirement can feel like crossing the finish line financially, it opens up a new realm of responsibilities and concerns. Hard work can help you save for your golden years. However, accounting for twists and turns from healthcare and inflation to unintended tax consequences, requires thorough planning. Similarly, passing on wealth the specific way you… read more…
- Are Annuities Actually as Valuable as They Seem?
A new study titled “How Much Do People Value Annuities and Their Added Features?” from the Center for Retirement Research at Boston College finds that while just 12% of investors with assets of more than $100,000 open an annuity, more than 50% of investors who could benefit from a simple annuity don’t buy one because… read more…
- My Husband and I Are in Our 50s, Have $1 Million in Our 401(k)s and Want to Retire at 65. Should We Switch to Roth Contributions?
Should you make 401(k) or Roth IRA contributions? In a perfect world, the answer would be both. If you have the means, maximizing your traditional 401(k) and Roth contributions is a great way to build a diversified set of retirement savings. But, of course, your paycheck gets a vote. So, if you have to choose,… read more…
- I Want to Convert $500k in My 401(k) to a Roth IRA. How Do I Avoid Paying Taxes?
You can’t avoid taxes when making a Roth IRA conversion, but there are strategies to reduce your tax burden if the circumstances are right. When you convert money from a pre-tax account, such as a 401(k) or an IRA, to a post-tax Roth IRA, you must pay income taxes on the full value of the… read more…
- How to Create Your Own Retirement Income Plan
It’s important to plan for your retirement income. One of the most overlooked aspects of retirement planning is that there are two steps to this process. First there’s your savings plan – how you will build wealth and set money aside over time. This is, of course, critical. Then, there’s your income plan, or how you… read more…
- What Is a Joint Annuitant?
A joint annuitant is a person who, alongside the primary annuitant, stands to receive benefits from an annuity contract throughout their lifetime. They’re often the spouses or partners of the primary annuitant, but can also be anyone else named in the contract. Upon the primary annuitant’s death, the joint annuitant becomes eligible to receive annuity… read more…
- I Made $400k Last Year and Have $600k in Retirement Savings, But My Spouse Doesn’t Work. How Can I Save More for Retirement?
It’s common for even very high earners to feel squeezed, especially if you live in an expensive area like New York, San Francisco or Boston. Costs of living close to your job will almost certainly be high, particularly since you’re competing with other six-figure earners. Depending on your field, you could easily have $200,000 or… read more…
- We’re 67 Years Old With $1 Million in IRAs. Is It Too Late to Convert to a Roth?
At 67, you’re presumably at or near retirement. If you have $1 million in IRAs, it may be attractive to converting to a Roth because it can provide tax-free income in retirement. It’s not too late from legal or regulatory perspectives. The IRS does not restrict Roth conversions on the basis of age or income.… read more…
- What Should I Do With My 401(k) Once I Retire?
Managing your 401(k) in retirement every bit as important as managing it up to that point. There are plenty of reasons for this but the big one is, you’re going to need this money for a long time. With good health and good luck, you could spend almost as much time in retirement as you… read more…
- Understanding Total Basis in IRAs
Understanding your IRA basis can help clarify how much of your retirement savings is taxable when withdrawn. The term “IRA basis” refers to the portion of an IRA made up of after-tax contributions, which are not taxed again upon distribution. This concept applies most commonly to traditional IRAs, where nondeductible contributions must be tracked using… read more…