- Do 401(k) Contributions Automatically Stop When You Hit the Limit?
Your 401(k) contributions should automatically stop at the annual limit. For 2025, the IRS has set the contribution cap at $23,500, with an additional $7,500 catch-up contribution allowed for those over age 50. In most cases, payroll systems are designed to automatically stop 401(k) contributions once you reach the annual limit. However, not all employer… read more…
- Can a CSRS Retiree Collect Spousal Social Security?
Determining whether a Civil Service Retirement System (CSRS) retiree can collect spousal Social Security benefits has historically been complicated. Previously, those under CSRS did not pay into Social Security, making them ineligible for certain benefits due to the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP). However, the Social Security Fairness Act, signed into… read more…
- When Is the Best Time of Year to Retire?
Choosing the best time of year to retire is largely subjective as it can impact your taxes, healthcare costs, retirement account withdrawals and Social Security benefits. Retiring early in the year might allow you to benefit from lower tax rates, retiring later could maximize your Social Security payments, and aligning your retirement date with the… read more…
- Social Security in New York: Everything You Need to Know
Social Security makes a sizable financial contribution to New York State, which receives financial support worth tens of billions of dollars annually for millions of its retired and disabled citizens as well as their relatives and certain low-income people. For its part, the state exempts Social Security benefits from state income taxes, making it moderately… read more…
- Social Security in Texas: Everything You Need to Know
As one of a handful of states with no state income tax, Texas is one of the more financially attractive places to reside for people who are receiving Social Security benefits. Nearly 4.7 million Texans, including almost 3.3 million retired workers plus spouses and other people, got payments from Social Security’s primary program, Old Age,… read more…
- How Does Medicare Work If You Have Retiree Insurance?
Leaving the workforce doesn’t necessarily mean leaving employer-provided health insurance behind. Some companies continue to offer retirees health coverage, even after they stop working and enroll in Medicare. When that happens, Medicare generally becomes the primary payer. Different rules may apply when it comes to prescription drug coverage, however. And age at retirement is another… read more…
- Can Retirees Contribute to a Traditional or Roth IRA?
Tax-advantaged retirement accounts such as traditional and Roth IRAs are important tools for retirement planners accumulating wealth to provide for a secure retirement. And, under the right circumstances, individuals can continue to take advantage of these tax benefits by contributing to traditional or Roth IRAs after they have retired. The key requirement for contributing to… read more…
- How to Create a Retirement Income Stream
Creating a reliable and adequate income stream from investments is one of the main goals of retirement planning. Learning how to do this involves assessing current finances and other retirement income sources, such as Social Security, and then choosing investments that can provide income that is consistent, sufficient and will last throughout the retirement years.… read more…
- I’m 55 With $1.2 Million in My 401(k). Should I Pivot to Roth Contributions?
Building up some retirement savings in a Roth account when you already have a significant traditional 401(k) at age 55 can make sense. For one thing, withdrawals from Roth accounts, unlike traditional 401(k) withdrawals, are generally tax-free in retirement. Roth accounts are also exempt from Required Minimum Distribution (RMD) rules, and Roth withdrawals won’t affect… read more…
- 6 Unexpected Retirement Expenses You May Face
Unexpected expenses could creep up in retirement and put your nest egg at risk. These can include healthcare, housing or inflation, and add up quickly. Preparing for these expenses can help you avoid surprises. Here’s a roundup with six general expenses that could eat into your nest egg. A financial advisor can help you create… read more…
- 401(k) Beneficiary Rules for Non-Spouses
Understanding 401(k) non-spouse beneficiary rules is key for anyone planning their estate and retirement. When a non-spouse inherits a 401(k), the distribution options differ significantly from those available to a spouse. Non-spouse beneficiaries must follow specific guidelines regarding withdrawals, which can impact both taxes and the timeline for accessing the funds. Knowing these rules can… read more…
- How to Catch Up on Retirement Savings in Your 30s
When you’re in your 30s, retirement may be far from your mind. But saving for retirement in your 30s is highly beneficial, especially if you’re trying to catch up. At this stage of life, compound interest has plenty of time to help grow your savings. Regardless of how much you already have saved, there are several… read more…
- How a Government Pension Could Have Offset Your Social Security
Under longstanding Social Security rules, certain public-sector workers and retirees received smaller benefits due to the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These rules, intended to adjust Social Security benefits for retirees with government pensions from non-covered jobs, often led to lower or entirely withheld payments for millions. That changed in early… read more…
- Does Virginia Tax Social Security?
Virginia does not tax Social Security benefits, which means that retirees in the state can get their Social Security income without state tax deductions. However, other forms of retirement income, such as pensions or distributions from retirement accounts, may still be subject to Virginia state taxes. If you’re worried about taxes in retirement, a financial… read more…
- Is It Wise to Convert 20% of My IRA to a Roth Each Year to Avoid Taxes and RMDs?
Transferring funds from a pre-tax retirement account such as an IRA to an after-tax Roth IRA is a move many retirement savers might want to consider. A Roth conversion, as the move is called, has many benefits. It can help you avoid required minimum distributions, or RMDs, in retirement, as well as taxes on your… read more…
- Understanding 401(k) Contribution Errors
Correcting 401(k) contribution errors involves identifying the mistake, adjusting future contributions and potentially making retroactive corrections to comply with IRS limits and plan rules. If you discover that you have over-contributed, the first step is to notify your plan administrator. If you need help with your retirement plan, a financial advisor can work with you… read more…
- Differences of Direct vs. Indirect Rollovers
Managing retirement savings effectively often involves rollovers, which allow investors to move funds from one retirement account to another without incurring taxes or penalties. In a direct rollover, the funds are transferred directly between accounts, while an indirect rollover requires the account holder to receive the funds before depositing them into a new retirement account.… read more…
- 401(k) Deferral Deposit Deadlines
Late 401(k) contributions can potentially lead to penalties and missed investment opportunities. Employers must adhere to strict deposit deadlines to comply with IRS regulations and ensure employees’ retirement savings grow as intended. Understanding these deadlines and the consequences of missing them is essential for both employers and employees to maintain the tax advantages associated with… read more…
- Roth TSP vs. Roth IRA
Both Roth thrift savings plans (TSPs) and Roth individual retirement accounts (IRAs) can offer significant tax advantages and the potential for tax-free growth, but they cater to different needs and circumstances. Understanding the differences between them can help you make an informed decision about which can be better suited for your retirement strategy. If you… read more…
- What Retirement Accounts Can Be Held Jointly?
While bank accounts and many other financial accounts can be jointly owned, retirement accounts like IRAs and 401(k)s are inherently individual. That means each person must open and maintain their own retirement account. The IRS does not permit sharing these accounts between spouses or any other individuals. Spousal IRAs represent an exception that allows a… read more…
- How Much Does a Roth Conversion Cost in Florida?
When you make a Roth conversion, the costs will depend on where you live. Converting money to a Roth IRA has a major upside, and a major downside. The benefit is tax-free portfolio growth and income. When you withdraw money from a Roth account in retirement, it will be untaxed and will not apply to… read more…
- IRS Grants Retirement Account Holders Ability to Withdraw $1,000 for Urgent Needs
It is easier to take up to $1,000 out of retirement plan savings to help with an emergency under a new rule from the Internal Revenue Service. The IRS announcement clarifies a 2022 law that aimed to reduce paperwork, costs and delays when savers tap retirement funds to cover unexpected expenses. Previously, withdrawing retirement funds… read more…
- How to Make Your Own Retirement Income Distribution Plan
Creating a retirement income distribution plan involves managing your savings and investments to generate a steady stream of income throughout your retirement. Making a retirement income distribution plan can give you peace of mind and help you avoid the risk of outliving your savings. The goal is to balance income needs, investment growth and tax… read more…
- 11 Financial Planning Tips for Seniors
As you age, your financial priorities can shift to focus more on preserving wealth, ensuring a steady income stream and covering healthcare costs. As a senior, effective financial planning can help you maintain the lifestyle you desire without worrying about running out of money. A plan can also allow you to navigate the uncertainties of… read more…
- How Do Retirees Make Money?
Retirement is a time when individuals finally have the opportunity to devote their lives to leisure. However, it also means transitioning from a steady paycheck to a fixed income, which can be challenging. And you may need to find ways to sustain your lifestyle. Retirees can use different strategies to generate income, ranging from traditional… read more…