- How Much Do You Need to Retire at Age 65?
How much money is needed to retire at age 65 depends on several factors, including lifestyle expectations, anticipated expenses and income sources. The general guideline is to aim for a savings target based on annual salary multiples, but individual needs vary. Some retirees may rely heavily on Social Security, while others draw from pensions, retirement… read more…
- How Much Do You Need to Retire at Age 40?
Retiring at 40 means covering 40 to 50 years of expenses without a paycheck. Financial security depends on accurately estimating costs, investment growth and inflation. Many early retirees focus on extreme savings, high-return investments and passive income. The 25x rule suggests saving 25 times annual expenses, but early retirees may need more to make savings… read more…
- I’m 61 With $890k in My IRA. Should I Convert 10% per Year to Avoid Taxes and RMDs in Retirement?
When should you use a Roth IRA to manage your taxes? As you hit your 60s, it’s common to shift retirement planning from general wealth accumulation to practical details like taxes and required minimum distributions (RMDs). Getting this right matters, because how you manage these tax requirements will help determine how much spending power you… read more…
- I’m 62 With $850k in My 401(k). Is It Too Late for a Roth Conversion?
You can perform a Roth conversion at any age, and potentially boost your retirement income. However, this strategy often produces more positive results the sooner it’s done. One reason is that you have to pay taxes on converted funds at the time of the conversion. After all, money sent to the IRS can’t be invested… read more…
- Should You Consolidate Your Retirement Accounts?
As you progress through your career, you may accumulate multiple retirement accounts from different employers, including 401(k) plans, IRAs or other investment vehicles. As a result, you may end up wondering if you should consolidate your retirement accounts. Retirement account consolidation can simplify portfolio management, potentially reduce fees and provide a clearer financial picture. However,… read more…
- I’m 65 With $1.1 Million in My 401(k) and IRA and a $2,800 Social Security Check. What’s My Retirement Budget?
A retirement budget has two major parts: income and expenses. Income can come from many sources, including Social Security or pension retirement benefits, annuity payments, investment interest and retirement account withdrawals. Expenses are the money you spend those funds on, such as housing, transportation, utilities, food and healthcare. Since budgeting involves forecasting, precision can be… read more…
- What Is the $1,000 a Month Rule for Retirement Planning?
Retirement planning requires careful consideration of income sources, expenses and long-term financial stability. The $1,000 a month rule is a simple guideline that can help you estimate how much savings you need to generate sustainable income. According to this rule, for every $1,000 in monthly retirement income you want, you should aim to have about… read more…
- How Do Interest Earnings Accumulate in a Deferred Annuity?
A deferred annuity is a long-term investment that grows tax-deferred and provides income in retirement. Interest earnings accumulate without immediate taxes, allowing savings to grow. Taxes are paid when withdrawals begin, often at a lower rate after retirement. A financial advisor can help determine how a deferred annuity fits into your retirement plan and recommend… read more…
- 10 Ways Gen X Can Grow Retirement Savings
Many Gen Xers are focused on strengthening their retirement savings as they move through their peak earning years. With fewer traditional pensions and questions about the future of Social Security, Gen X retirement funding strategies call on a mix of tax-advantaged accounts, strategic investing and catch-up contributions. Maximizing 401(k) plans, IRAs, and other investment opportunities… read more…
- I Plan to Withdraw $110k From My 401(k) This Year. Will This Cause My Medicare Premiums to Go Up?
Your 401(k) withdrawals can affect how much you spend on Medicare. While few households pay premiums for Medicare Part A, most households do pay premiums for Medicare Part B and Part D. These premiums are based in significant part on your taxable household income. If your income goes up, such as by making a withdrawal… read more…
- What’s a Realistic Retirement Budget? I’m 62 With $890k in a 401(k), $115k in a Roth IRA and I’m Eligible for Social Security.
During most of the decades you are preparing financially for retirement, you are likely focused on saving as close as you can get to the recommended amount, without worrying too much about the details. As you approach retirement, however, it’s a good idea to look more closely at what might be a realistic retirement budget.… read more…
- I’m 60 With $960k in an IRA, $300k in a 401(k) and Would Expect a $2,400 Social Security Check. Can I Retire at 62?
Many 60-year-olds with $960,000 in tax-deferred retirement accounts and a work history that will entitle them to $2,400 monthly from Social Security could probably retire in two years. However, much depends on circumstances. Individual lifestyle preferences, including local cost of living and plans for travel or other potentially costly recreational activities, could mean that delaying… read more…
- Will Doing $50k in Annual Roth Conversions Lead to Higher Social Security Benefits?
Curious if a Roth conversion might boost your Social Security benefits? Here’s the reality: while converting to a Roth IRA ramps up your taxable income for that year, it doesn’t affect the way Social Security calculates your benefits. Social Security relies solely on your earned income — not the extra taxable income generated by a… read more…
- What Is the Penalty for Not Taking Your RMD?
As you approach retirement, it’s important to consider how required minimum distributions (RMDs) from your IRA or 401(k) could impact your taxes. These withdrawals are intended for you to draw down your tax-deferred savings. Failing to take your RMD can lead to significant financial penalties. The IRS imposes a steep excise tax on any amount… read more…
- Should You Invest in a 401(k) Without Matching?
An employer match is one of the most valuable features of many 401(k) plans. Even without an employer match of your contributions, however, a 401(k) can still be useful for retirement savings. The tax-deferred growth and the potential for disciplined, automatic contributions make it an option worth considering. If your 401(k) plan doesn’t match your… read more…
- I’m 69 With $1 Million in an IRA. Is It Too Late for a Roth Conversion?
Legally, it’s never too late to make a Roth conversion. You can do this at any time in life, in any amount, so long as you have funds in a qualifying account. Financially, however, the later you are in life the more likely it is that you will pay more in taxes on a Roth… read more…
- How to Use Buffered ETF Strategies for Retirement Planning
Buffered ETFs are a newer investment option designed to minimize risk in retirement portfolios. They protect against market downturns while still capturing gains, making them ideal for retirees who want to safeguard their savings against volatility. This strategy helps in planning for retirement by balancing risk and growth potential. A financial advisor can specifically assist… read more…
- Should I Take a $115,000 Lump Sum or Opt for $820 Monthly Annuity Payments?
If you are facing the choice between a large lump sum or monthly payments, you’ll likely want to consider several key factors before making a decision. One concern is when you will receive the money, since getting $115,000 up front will allow you to invest it sooner and earn money from it over a longer… read more…
- What’s a Realistic Retirement Budget? I’m 58 With $665k Saved, Making $95,000 Annually.
A retirement budget balances your expected income in retirement with your expected living expenses and taxes. Financial planners may use some rules of thumb to generate estimates of how much you are likely to receive in income and use to pay your costs after getting a good understanding of your goals, habits and circumstances. In… read more…
- With $715k in a Roth IRA and $3,400 Monthly Between My Pension and Social Security, Can I Retire at 64?
Retirement becomes financially feasible when projected income exceeds projected expenses. Retiring at age 64 with $715,000 in a Roth IRA and $3,400 monthly in combined pension and Social Security benefits could be realistic based on typical investment returns and retiree expenses. However, this may not be true for everyone. Your current age, life expectancy, lifestyle… read more…
- I’m 69 With $760k in a 401(k). Should I Convert 25% per Year to a Roth IRA to Avoid RMDs and Taxes?
Converting 401(k) savings to a Roth IRA can free you from having to take mandatory withdrawals at age 73 and beyond. Because Roth withdrawals are tax-free, any voluntary withdrawals you take won’t be subject to income taxes. However, Roth conversion comes with a significant current tax bill. So, whether a staggered conversion over the next… read more…
- Can an Employer Contribute to an Employee’s Personal Roth IRA?
Employers can’t contribute directly to an employee’s personal Roth IRA, but they can still help with retirement savings in other ways. The SECURE 2.0 Act allows employers to contribute to SIMPLE IRAs and SEP IRAs that are set up as Roth accounts. This can provide employees with the benefits of Roth savings, including tax-free withdrawals… read more…
- How Long Does It Take to Withdraw From Your 401(k)?
Generally, you should only make 401(k) withdrawals as you enter retirement, but there are certain situations in which you may do so earlier in life. Generally, withdrawing money from a 401(k) can take two to three business days for a direct transfer and roughly a week for a check, but the context in which you… read more…
- 8 Strategies to Help You Plan for an Early Retirement
Planning for an early retirement demands a well-thought-out strategy to secure financial stability and comfort. Key early retirement strategies include establishing disciplined saving and investment practices that focus on building your wealth over time. You might also consider maximizing your contributions up to retirement accounts limits, diversifying your investment portfolio to spread risk and budgeting… read more…
- I’m 63 With $1.4 Million in My 401(k) and Have Started Social Security. Is It Too Late for a Roth Conversion?
Procedurally, it’s never too late to make a Roth conversion. The IRS allows you to move this money at any time, so long as you have funds in a qualifying pre-tax account. In many cases, the closer you are to retirement the more likely it is that a Roth conversion could cost you big. This… read more…