- 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…
- I’m 62 With $425k in a Roth IRA and $2,600 per Month between Social Security and Pension. Can I Retire Now?
For many people, early retirement means 62. This is the age they can start withdrawing money from their retirement accounts and receive Social Security. For example, let’s assume an individual with $425,000 in a Roth IRA, a $1,000 monthly pension, and expect $1,600 in Social Security. Is it going to be enough? As often in… read more…
- Will the 2025 Social Security COLA Affect Future Retirees?
The 2025 Social Security cost-of-living adjustment (COLA) could influence future retirees by preserving the purchasing power of their benefits. COLA adjustments are designed to counteract inflation, ensuring that the primary insurance amount (PIA) reflects current economic conditions. For those delaying retirement, the benefits of COLA compound with delayed retirement credits, potentially leading to substantially higher… read more…
- 5 Budgeting Strategies to Help You Save More for Retirement
Saving for retirement can be challenging, but learning how to effectively budget money can make a significant difference. While you cannot change what has already been spent or saved, you do have control over your financial decisions moving forward. By focusing on the present and setting a clear plan, you can begin to make substantial… read more…
- Medicare Premiums: What You Should Expect to Pay in 2024
Medicare isn’t free. This catches many retirees by surprise. Medicare has a reputation for simplicity. You turn 65 and get access to free universal health insurance. This is true to a certain degree, and that’s one of the reasons the program is overwhelmingly popular among recipients. However, in practice, Medicare has many carve-outs and exceptions.… read more…
- How Many Hours Can You Work After You Retire?
While there’s no universal cap on post-retirement work hours, the number can impact Social Security benefits and taxes, depending on your age and earnings. Retirees under the full retirement age may see a temporary reduction in benefits if their income exceeds certain limits. Social Security recipients, in particular, need to be aware of specific earnings limits… read more…
- Can You Retire and Still Work a Job?
If you are close to retiring, you may be wondering whether you can retire and still work a job. This is commonly referred to as “working in retirement,” and you may consider this option to supplement your income, stay active, maintain a sense of purpose, or pursue a passion. However, you will also need to… read more…