- 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…
- I Withdrew $85k from My 401(k) This Year But It Increased My Medicare Premiums. Is This Permanent?
Medicare premium increases aren’t permanent, but they can have a long tail if you don’t manage your income properly. While most people receive Medicare Part A for free, Parts B and D typically include monthly premiums. Depending on your household income, those premiums might be increased by a needs-based surcharge called the Income-Related Monthly Adjustment… read more…
- How to Find a Retirement Planning Advisor
Finding a retirement financial advisor will require you to evaluate key traits and qualifications that align with your goals. This means looking for advisors who specialize in retirement planning, possess relevant certifications and have a strong track record with retirement-specific strategies. Asking about their experience with different retirement income approaches—such as Social Security timing, pension… read more…
- What’s a Realistic Retirement Budget? I’m 52 With $680k Saved, Making $115,000 Annually.
Your early-fifties is an excellent time to start making a retirement budget. In your 40s, you risk jumping the gun. You’re usually not even halfway through your career at age 40, since many people start their careers between 21 and 25 and finish working between 65 and 70. So, with around 25 to 30 earning… read more…
- Super Catch-Up Contribution Limits for 401(k)s in 2025
The SECURE 2.0 Act introduced a new provision known as the “super catch-up” for individuals aged 60 to 63, allowing them to contribute more to their 401(k) accounts starting in 2025. Specifically, participants in this age range can now contribute an extra $11,250 to their 401(k) or a similar workplace plan. This enhanced catch-up contribution… read more…
- Should Retirees Follow the ‘100 Minus Your Age’ Rule?
The 100 Minus Your Age Rule, often referred to as the Rule of 100, is a straightforward investment guideline aimed at helping retirement savers allocate their assets between stocks and bonds effectively. Per the rule, an investor subtracts their age from 100 to calculate the percentage of their portfolio that should be invested in stocks,… read more…
- Which States Tax Social Security Benefits?
Taxation of Social Security benefits at the state level can significantly affect your overall retirement budget. How large the effect is, or whether there is an effect at all, depends on which state you retire to. While most states do not tax Social Security income, nine states impose taxes on all or part of these… read more…
- I’m 62 With $900,000 in My 401(k). Should I Convert $90k per Year to Avoid Taxes and RMDs in Retirement?
Late-in-life Roth conversions can take some tricky math. As you approach retirement, one of the most important questions will be how to manage the taxes on your retirement income. For households that rely on pre-tax portfolios, like a 401(k) or a traditional IRA, this means anticipating ordinary income taxes on all of your withdrawals. It… read more…
- I’m 69, Taking Social Security and Have $815k in My 401(k). Is It Too Late for a Roth Conversion?
From a legal and regulatory standpoint, it is never too late for a Roth conversion. Under the rules, you can transfer retirement funds from a tax-deferred account such as a 401(k) to a Roth IRA at 69 or any other age. Whether it makes financial sense to do that is another matter. To determine this,… read more…
- Can a Nursing Home Take Our Savings? We Have a $450k IRA, a House and Other Assets
A nursing home cannot take your savings, home or other assets. Aside from a general ability to sue you for unpaid bills, nursing homes have no right or ability to simply seize what is yours. That said, financing care in a nursing home can drain your savings quickly enough that it makes little difference. Whether… read more…
- Social Security in Florida: Average Payments, Taxes and Contact Information
Florida extends the financial equivalent of an open-arms welcome to Social Security recipients, since it collects no income taxes on government retirement benefits or, in fact, other types of income. This means retirees depending on monthly Social Security checks can devote more of their financial resources to supporting their retirement lifestyles. In Florida, Social Security… read more…
- Social Security in California: Average Payments, Taxes and Contact Information
California has the largest number of Social Security recipients and also receives more dollars in benefits than any other state. Almost 6.3 million state residents collect payments from Social Security’s main program for retirees, disabled workers and their families according to recent data from the Social Security Administration. Those payments total around $114.8 billion per… read more…
- Am I Too Late to Invest for Retirement at 65? I Own My Home but Only Have $85k in Savings
While 65 is later than most people begin investing for retirement, it’s not too late. The question is not whether to invest but how to invest to increase your chances of achieving your financial retirement goals. That’s going to require answering a number of questions, including how healthy you are, how long you can expect… read more…
- When I Claim My $2,950 Social Security, Will My Wife Automatically Get a Spousal Benefit?
The rules around Spousal Social Security benefits have several nuances, but some policies are crystal clear. One is that a spouse must specifically request to begin receiving spousal benefits. That is, it’s not automatic. Another certainty is that a spouse will only receive the spousal benefit if it is a larger amount than the benefit… read more…
- Roth vs. Pre-Tax Contributions: What to Consider
Choosing between Roth and pre-tax contributions for retirement savings depends on how each impacts your taxes now and in retirement. Roth contributions are made with after-tax dollars, so both contributions and earnings can be withdrawn tax-free in retirement if done correctly. Pre-tax contributions, on the other hand, reduce taxable income now but are taxed upon… read more…
- If I Convert $235k to a Roth IRA, Will It Affect My Medicare Premiums?
Because Medicare premiums are tied to income, converting a $235,000 retirement account to a Roth IRA has the potential to cause Medicare Part B premiums to increase. For many taxpayers, in fact, a single-year conversion of that magnitude could more than triple the amount of the monthly premium most Medicare enrollees pay for Part B… read more…