- 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
Calculating your total basis for an individual retirement account (IRA) will help you determine how much you can withdraw without having to pay taxes or face a penalty. If you make any withdrawals above this amount, you will typically have to pay taxes and could be subject to a 10% penalty. Here’s what you need… read more…
- How to Manage Your Money After You Retire
Retirement is a pivotal turning point that triggers significant financial changes. The steady paycheck you’ve grown accustomed to will be substituted by income from various sources, including retirement accounts, Social Security and other investments. Managing these different streams of income in retirement is critical to maintaining a comfortable lifestyle. Here’s a step-by-step guide for where… read more…
- Strategies to Maximize Social Security for Married Couples
Making the most out of Social Security benefits is a crucial aspect of retirement planning, especially for married couples. Optimizing these benefits can significantly impact your quality of life during retirement, providing a steady and reliable source of income. From delaying Social Security until age 70 to strategically splitting your benefits, here are four common… read more…
- I Have $1 Million in a Roth IRA and Will Receive $2,250 Monthly From Social Security. Can I Retire at 62?
Suppose you have $1 million in a Roth IRA and will receive $2,250 each month from Social Security when you become eligible for benefits. Would this be enough to allow you to retire at age 62? The answer to that question could be yes, but there’s a chance it may require you to live on… read more…
- Ultimate Guide to Social Security Benefits for Widows
Losing a spouse is an emotional and challenging experience, and it often brings financial concerns to the forefront. Social Security benefits can support widows financially and help them navigate expenses following a spouse’s death. This comprehensive guide covers eligibility criteria, the amount widows can receive in survivor benefits, the possibilities for divorced or remarried widows,… read more…
- The 4% Rule for Retirement Withdrawals Might Finally Be Safe to Use Again, Says Morningstar
There’s been an ongoing debate about whether retirees should abandon the “4% rule” for withdrawals from retirement accounts, a retirement income rule of thumb for decades. The market volatility of recent years made that rule suspect for many new retirees, but a new study from Morningstar finds that the rule can still apply. Do you… read more…
- Ask an Advisor: I’m a Retired Teacher With a State Pension, Social Security and $550k in Savings. Should I Pay Off My $120k Mortgage?
I am trying to decide if I should pay off my house worth about $750,000. I owe around $120,000 on an adjustable-rate mortgage (ARM). On the other hand, my 4.5% interest rate just ended and I know the interest will continue to rise in this economy. My mortgage is $1,450 per month, having risen $400… read more…
- Six Tools to Help You Plan for Retirement
Preparing financially for retirement takes diligent tracking of savings, investments and benefit projections over decades. Thankfully, the right tools exist to help chart progress toward various retirement goals. Many of these tools are available for low cost or no cost. Free tools and calculators from companies like SmartAsset, JPMorgan, Schwab and Fidelity offer good examples.… read more…
- How to Catch Up on Retirement Savings in Your 40s
If you are in your 40s and behind on your retirement savings, you are not alone. While saving early will give you more time to grow your nest egg, it’s never too late to start. Let’s break down what you can do to catch up on your retirement savings in your 40s. If you’re falling… read more…
- How to Calculate Your Retirement Cost of Living
When it comes to retirement, understanding the potential cost of living is important for effective financial planning. Without a clear idea of these costs, you can run the risk of outliving your savings or compromising your lifestyle. Here’s what you need to know to calculate your retirement cost of living. A financial advisor can help… read more…
- Contribution Limits for a One-Participant 401(k)
A one-participant 401(k) or solo 401(k) is an attractive retirement savings option for self-employed workers or business owners. While they’re similar to the standard 401(k) plans often offered at larger workplaces, one-participant 401(k)s allow solo business owners to exceed the contribution limits that other plans are subject to. Consider speaking with a financial advisor if… read more…
- Do 401(k) Contributions Reduce Your AGI?
When it comes to saving for retirement, 401(k) plans are a popular choice for many American workplaces. Contributing to a 401(k) not only helps you save for retirement but offers the added bonus of reducing your adjusted gross income and lowering your tax liability for the year. A financial advisor can help you determine how… read more…
- I Have Enough in My Retirement Accounts. Can I Use Rule 72(t) to Retire Early?
Tapping into your retirement savings before age 59.5 typically triggers a 10% early withdrawal penalty in addition to the income taxes you’ll owe. Using Internal Revenue Service Rule 72(t) can help you generate income from your nest egg in your 50s or earlier without paying that penalty. If you use it, you’ll still have to… read more…
- Ask an Advisor: I’m a 54-Year-Old Nurse With $1 Million in Assets and a $7k Monthly Pension. Can I Retire Now?
I’m 54 with 26 years of service as a nurse. We go by the rule of 80 (your age plus years of service = 80) on our retirement plan. It will cover my health insurance. My pension will be around $7,000 per month minus taxes. I have a combined $750,000 in a 403(b) and Roth… read more…
- I Have $500k in a Roth IRA, and Will Receive a Combined $2,000 a Month From a Pension and Social Security. Can I Retire at 62?
Ultimately, whether you have enough to retire depends on your costs and your income. If you can live on a tight budget with the right circumstances, $2,000 a month from a pension and Social Security, combined with the right strategy with $500,000 in your Roth IRA may be enough to sustain you throughout your retirement.… read more…
- High Cost of Living Surpasses Retirement Preparedness as Top Financial Concern, Study Says
A recent survey of employers from the Employee Benefit Research Institute (EBRI) uncovered a major shift taking place among American companies and their workers. Instead of putting retirement readiness at the top of their list of financial concerns, they’re increasingly becoming more worried about cost of living. This shouldn’t come as a total surprise, considering… read more…
- Ask an Advisor: I’m 70 With $1.4 Million in IRAs. Should I Convert $160k Per Year into a Roth to Save on RMDs Later?
I am 70 and I have $1.4 million in traditional IRAs. Is it best to do $160,000 in Roth conversions for the next 1-3 years to reduce my high RMDs in about 5-10 years? That would put me in the 24% tax bracket and $330 Medicare premium rate. Please give me advice. – Dennis I do… read more…
- Investing With Your IRA: ETFs vs. Mutual Funds
Investing for retirement requires careful planning and informed decision-making. An individual retirement account (IRA) is a powerful tool for retirement savings, offering tax advantages that can significantly enhance your future financial stability. IRAs allow individuals to direct pre-tax income, up to specific annual limits, toward investments such as individual stocks, bonds and mutual funds, which… read more…
- This New Federal Proposal Could Give You a 5% Match on Your Retirement Contributions
Low- and middle-income workers who aren’t covered by a workplace retirement savings plan would get access to the federal Thrift Savings Plan, under a bipartisan bill introduced in the U.S. Senate recently. “Americans who work hard their entire lives deserve to retire with dignity,” Sen. John Hickenlooper, D-CO, said in a statement. “This bill helps… read more…