- 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…
- What’s a Realistic Retirement Budget? I’m 55 With $490k Saved, Making $80,000 Annually.
Your mid-fifties is a good time to do a retirement check. To be clear, you should always have at least one eye on retirement. This isn’t something to ever forget entirely. But most of the time, that means nothing more than making sure your annual contributions go through in-full, on-time and to the right places,… read more…
- I Want to Retire in 4 Years. Should I Convert 25% of My 401(k) to a Roth IRA Until Then to Avoid RMDs and Taxes?
Transferring some of your retirement savings from a tax-deferred account like a 401(k) to a Roth IRA can help you reduce or possibly avoid required minimum distributions (RMDs) and income taxes later on. It can also be beneficial if you want to leave tax-free savings to your heirs. A Roth conversion can therefore provide you… read more…
- I Want to Convert My $640,000 401(k) to a Roth IRA. Will It Affect My Medicare Premiums?
A Roth conversion can cause your Medicare premiums to surge. That’s the bad news. The good news is that this surge will be temporary, depending on your future income. The better news is that you can manage it, if you want to. Although for large conversions, you may want to accept the one-time increase. For… read more…
- Is a Thrift Savings Plan (TSP) a Qualified Retirement Plan?
A thrift savings plan (TSP) is a retirement savings program specifically designed for federal employees and members of the military. TSPs are considered qualified retirement plans, and this status affects aspects like tax benefits, employer contributions and protections under federal law. Qualified retirement plans must meet certain standards set by the IRS and are typically… read more…
- I’m in a Lower Tax Bracket Than I Was Last Year — Is This the Ideal Time for a Roth Conversion?
It is often advisable to convert funds from an IRA or similar tax-deferred retirement account to Roth in a year when you are in a lower tax bracket in order to save money in the short-term. Having said that, there are other considerations. Many people like the idea of transferring IRA funds to Roth accounts… read more…
- Will a Roth Conversion Impact My Taxes on My $2,800 Monthly Social Security Benefit?
Taxes are generally a concern when transferring funds from a tax-deferred retirement account to a Roth account. Converted funds are treated as taxable current income in the given year, which can push a taxpayer into a higher tax bracket and result in a sizable one-time tax bill. If you are receiving Social Security benefits, this… read more…
- I’m a 46 Year Old Divorced Dad. I Have $460k in My 401(k) and Contribute the Maximum. Can I Retire in 10 Years?
Early retirement is an ambitious goal. Reaching it isn’t just about making sure that you have the money saved up. It’s also about making sure you address the potential risks, changes and needs that can come along in your 40s and 50s, because most people will have more obligations in their mid-life than they will… read more…
- I Have $850k in My 401(k). What Should I Do With It When I Retire?
For households with very little saved, there is a rulebook. A tight retirement requires you to restructure your spending, maximize Social Security and delay withdrawals as late as possible. For households with significant savings, there’s another set of rules. You want to manage your wealth, plan for your estate and minimize taxes. With $850,000 in… read more…
- RMDs Are Due December 31. What Happens If I Don’t Take a Distribution?
In almost all cases the IRS enforces its rules through fines and penalties. This is the case of Required Minimum Distributions (RMDs). As always, your RMDs are due by the end of the year. In this year, if you don’t take out the minimum distributions by December 31, 2024, the IRS will penalize you with… read more…
- I’m 60 With $750k in my 401(k). Should I Convert $75,000 per Year to Avoid RMDs in Retirement?
Many retirement savers with sizable tax-deferred accounts like a 401(k) are interested in converting those funds to Roth accounts so they can escape having to pay Required Minimum Distributions (RMDs) and the associated taxes after they retire. It’s not always the right move, in part because of the hefty upfront tax bill on conversions. However,… read more…
- Social Security to Increase by 2.5% for 2025: What Retirees Should Know
Inflation has more or less finally been tamed. That’s the main takeaway from Social Security’s 2025 cost-of-living adjustment, announced by the Social Security Administration earlier this month. A financial advisor can help you build an income plan for retirement and decide when to claim Social Security. Find an advisor today. Every year the SSA adjusts… read more…
- Should I Take a $78,000 Lump Sum or $650 Monthly Annuity Payments?
When faced with the decision of taking a lump sum pension payout or receiving monthly annuity payments, your course of action will depend on your individual circumstances. Key factors include your life expectancy, others sources of income and how soon you will be paid the lump sum. Speak with a financial advisor before making significant… read more…
- Typical Options for Pension Payout and How to Choose One
If you participate in a pension plan through your workplace, you’ll have to decide how you want to receive the payout when you retire. Pension plans typically offer two disbursement options: an annuity, which provides steady payments over time, or a lump-sum payment. Each option has its pros and cons, and the best choice will… read more…
- Can You Roll Over Your 401(k) When You Get a New Job?
You can move your 401(k) to another company when you get a new job. In the event of a job change or termination, you typically have several options for managing your old 401(k): leave it with your previous employer, transfer it to your new employer’s plan, or roll it into an IRA. A 401(k) to… read more…
- I’m 61 With $1.4 Million in My 401(k). Should I Convert $120k Per Year to Avoid RMDs?
Converting retirement savings held in a 401(k) to a Roth account can help you reduce or even avoid mandatory withdrawals while giving your more tax planning flexibility. Roth conversions can be particularly helpful if you expect to be in a higher tax bracket in retirement. Talk over your retirement plans with a financial advisor any… read more…
- 4 Investment Options to Help You Build Your Retirement Income
Part of planning for a secure retirement is crafting a reliable income stream that can support your lifestyle once you stop working. There are a variety of investment options that can help you grow your savings and generate income throughout retirement. Each choice offers specific benefits, risks, costs and limitations. The key is to find… read more…