- I’m Going to Get $2,600 a Month From Social Security. How Can I Reduce My Taxes on It?
Retired people who get monthly Social Security payments may owe income tax on a portion of the benefits depending on their income and filing status. The amount of benefits exposed to taxes is determined based on income and filing status, and may range from 0 to 85%. The taxes applied to your $2,600 monthly benefit… read more…
- I’m 58 and Retiring Soon. How Should I Structure My $890k Portfolio?
Retiring early means approaching your portfolio differently. In your working life, you will likely focus on growing your wealth as quickly as possible. The earlier you want to retire, the sooner you will need this portfolio ready and the more you will need in it. You will have less time for this money to grow,… read more…
- I’m 67 With $900k in My 401(k), $200k in Cash and $2,400 Social Security Benefit. What’s My Retirement Budget?
From one perspective, by age 67 your retirement budget is largely set in stone. The accumulation phase of your working life is over, and whatever set of savings and benefits that you have is… well, what you have. Looking at things that way, when it’s time to set your budget the next thing to do… read more…
- I Withdrew $60k from My Retirement Plan This Year But It Increased My Medicare Premiums. Is This Permanent?
For retirees, there are generally two big surprises when it comes to Medicare. The first is that Medicare is not actually free. The retirement program is America’s closest thing to universal health insurance, and it does cover everyone over 65 regardless of health or pre-existing conditions. However, Medicare also has different costs based on your… read more…
- I’m 60 With $930k in My IRA and Have Started Social Security. Is It Too Late for a Roth Conversion?
There is no legal or regulatory age restriction on Roth conversions, so it’s not too late in that sense. Generally speaking, a Roth conversion may make more sense for a younger saver. However, there are a number of other considerations that may be more important to keep in mind. For instance, unless you are likely… read more…
- I Have $1.3 Million Saved and Will Collect $2,800 per Month in Social Security. Can I Retire at 62?
Although one could argue that the cultural retirement age is 65, and Social Security retirement age is 67, many households want to cross the finish line a little bit early. But 62 is the earliest you can begin to take Social Security. It’s also not that far in advance of the normal retirement age, so… read more…
- I’m 58 With $1.7 Million in My 401(k). Should I Start Converting 10% per Year to a Roth IRA Now to Avoid RMDs and Taxes?
Transferring retirement savings from a 401(k) or similar tax-deferred account to a Roth IRA can help keep you from having to make taxable withdrawals by the time your reach your mid 70s. This can reduce your tax burden after retiring, but it won’t necessarily save on taxes overall. That’s because any funds converted to a… read more…
- What’s a Realistic Retirement Budget? I’m 48 With $430k Saved, Making $95,000 Annually
When it comes to estimating your retirement income, a popular rule of thumb is that you’ll usually need about 80% of your working income to maintain the same standard of living. This comes from a number of factors, including the fact that you won’t need to set aside money for retirement anymore. This number is… read more…
- Social Security Fairness Act Adds an Average $360 Benefit for Some: Will You Be Getting a Bigger Social Security Check?
If you are a current or former public sector employee or a survivor, spouse or ex-spouse of someone like that, you may receive more from Social Security as a result of new federal legislation. The Social Security Fairness Act repeals two federal laws that for decades have reduced or eliminated Social Security benefits for some… read more…
- Do 401(k) Withdrawals Before I Turn 73 Count Toward My RMDs?
If you have a tax-deferred retirement savings account such as a 401(k), taking earlier or larger withdrawals than required won’t directly reduce future mandated distributions. However, since pulling money out now will likely reduce the future balance of your 401(k), it could indirectly reduce the size of the compulsory distributions. That’s because these obligatory withdrawals… read more…
- 12 Annuity Terms Every Investor Should Know
Annuities can be a good option for investors seeking steady income during retirement. To get started, it’s important to learn some basic annuity terms. These 12 key terms will help you understand how annuities work and whether they fit your retirement plan. A financial advisor can also help you evaluate an annuity contract for your… read more…
- I’m 58 With $1.4 Million in My 401(k). Should I Convert $140k per Year to Avoid RMDs and Taxes in Retirement?
Transferring funds from a 401(k) to a Roth IRA can help a retirement saver control the timing and, potentially, the amount of their future tax liability. In general, if your applicable income tax rate is likely to be higher after retirement, a Roth conversion can make sense. That’s because Roth accounts aren’t subject to mandatory… read more…
- Inherited IRA vs. Spousal IRA
Inherited IRAs and spousal IRAs are two different types of accounts that you can use for retirement planning. An inherited IRA is created when someone inherits that account, often from a non-spouse. A spousal IRA allows working spouses to contribute to the account for non-working or low-earning spouses. A financial advisor can help you understand… read more…
- 7 Mistakes That Can Mess Up Your Social Security Benefits
Social Security payments are a key part of most retirement plans, but many people reduce their benefits by claiming too early, misunderstanding spousal benefits or misjudging how work income affects payments. A financial advisor can help you understand the rules and choose the right time to claim so that you can maximize your benefits. Here… read more…
- Safe Harbor 401(k) vs. Traditional 401(k)
When it comes to saving for retirement, 401(k) plans are a popular choice for both employers and employees. However, not all 401(k) plans are the same. Employers can choose between a traditional 401(k) plan and a Safe Harbor 401(k) plan, each offering unique features and benefits. Whether you’re an employer or employee, it’s important to… read more…
- I’m 50 With $650k in My 401(k). Should I Do a Roth Conversion Each Year Up to the Income Limit of the 24% Tax Bracket?
Staggering your Roth conversions can save a lot of money. Under the right circumstances, a Roth IRA can be the best retirement account for tax management. On the back end, you simply can’t beat the offer of no income taxes or required minimum distributions (RMDs) in retirement. The catch is the front end, when you… read more…
- 5 Retirement Savings Basics Everyone Needs to Know
Retirement saving is a long-term plan to set aside and invest money to provide income after you stop working. It often involves contributing to accounts like 401(k)s or IRAs. Starting early helps savings grow through compound interest. Understanding these five basics could help you make decisions to support your financial goals. A financial advisor can… read more…
- I Have $620k in My 401(k). What Should I Do With It When I Retire?
When it comes to retirement savings you have, essentially, three phases: saving, distribution and estate. Your saving phase is the one that people pay the most attention to. This is the era in which you build wealth during your working life and prepare for retirement. Your estate phase is the one that most people pay… read more…
- 5 Strategies to Limit Your RMD Distributions
Required minimum distributions (RMDs) are mandatory yearly withdrawals from tax-deferred retirement accounts once you reach a specific age. Failing to take them results in penalties, and taking them increases your taxable income. If you don’t need the income, this can lead to higher taxes. A financial advisor can help you create an effective RMD strategy… read more…
- I Have $940k in an IRA and Will Receive $2,200 Monthly From Social Security. Can I Retire at 65?
Retirement at 65 might be considered a little early for some. For anyone born after 1960, full Social Security benefits do not begin until age 67. Between ages 62 and 67 you can begin collecting benefits, but you will receive reduced payments for the rest of your life. So if you’re looking to retire at 65,… read more…
- I Withdrew $95k from My Retirement Plan This Year But It Put Me in a Higher Tax Bracket and Increased My Medicare Premiums. Is the Increase Permanent?
When you make significant withdrawals from your retirement plan, like withdrawing $95,000 in a single year, you can inadvertently push yourself into a higher tax bracket and trigger an increase in your Medicare premiums through the Income-Related Monthly Adjustment Amount (IRMAA). Here’s an in-depth look at how this happens and what you can do about… read more…
- Peter Thiel Made $5 Billion in a Roth IRA: How the Tech Entrepreneur Made a Tax-Free Fortune
A Roth IRA, under the right conditions, is the best retirement vehicle you can have. Just ask Peter Thiel. According to ProPublica reporting sourced from IRS records, between 1999 and 2021 Thiel grew his Roth IRA from $2,000 to more than $5 billion. This is significantly more than the average household’s IRA balance, reported by Fidelity… read more…
- These 3 States Stopped Taxing Social Security Income in 2024. Is Yours Next?
The trend of states eliminating income taxes on Social Security benefits continued in 2024, with three more states joining the more than 40 that already exempt the monthly government retirement payments from state income taxes. Social Security retirement recipients in Kansas, Missouri and Nebraska won’t have to pay their states’ income taxes on their benefits… read more…
- I’m 76 With $460k in my 401(k). How Should I Handle My RMDs?
Required minimum distributions, or “RMDs,” are a tax law that every retiree needs to understand. Specifically, under the RMD law you can’t just leave your money in place indefinitely. You need to start taking withdrawals from qualifying pre-tax retirement accounts starting at age 73, and you need to pay taxes on that money. So it’s… read more…
- I’m Making $155,000 Salary This Year. Can I Still Contribute to a Roth IRA?
The IRS limits Roth IRA contributions based on household income. Each year, the IRS publishes its inflation-adjusted income caps on Roth contributions. This is a range called the “phaseout.” Households with income below this range can make a full contribution to their Roth IRA. Above this range, a household cannot make any contributions. Within it,… read more…