- Financial Planning vs. Estate Planning
Both financial planning and estate planning can help you reach long-term financial goals. But while they are very different in which aspects of your finances they can focus on, both financial approaches could also complement each other to offer you a healthy balance between growth and protection. To execute either, it’s important to understand how… read more…
- What Are Exempt Reporting Advisers (ERAs)?
Exempt reporting advisers (ERAs) are specialized financial advisors who offer their services primarily to certain private investment and venture capital funds. These advisors are not required to register with the U.S. Securities and Exchange Commission (SEC) but still must report certain information. This unique role sets ERAs apart from other investment advisors, making them a… read more…
- How to Manage Sudden Wealth in 7 Steps
A substantial boost in your personal wealth can happen overnight. You can win the lottery, inherit an estate or profit from a business sale. Many people aren’t prepared for a sudden windfall, making it difficult to know which steps can protect that money and grow it long-term to last a lifetime. If this sounds like… read more…
- I Turn 73 This Year. How Do I Avoid RMD Taxes?
The IRS allows workers to put aside pre-tax earnings in traditional Individual Retirement Accounts, 401(k)s and similar workplace accounts. Within these accounts, the money grows tax-deferred. But the national tax collector only waits so long to collect, and once you turn 73 (or 75 if you were born in 1960 or later), the law forces… read more…
- Ask an Advisor: We Have $1.6M in a 401(k) Plus Another $650k and Social Security. Should We Shift Assets to a Target Date Fund or an Annuity?
We have a combined pension and Social Security income of $8,400 per month that will only drop to $6,730 if one of us passes away. Our RMDs will start soon and we have $1.6 million in a 401(k) which we feel we can use a low-cost (expense ratio 0.12%) total return target fund to avoid… read more…
- Ask an Advisor: My Wife and I Want to Retire Early. How Many Different SEPPs Can We Have?
My wife and I plan to retire before age 59 ½. How many different 72(t)s can a household utilize? For example, if I have two traditional IRAs at two separate brokerages, can I take substantially equal periodic payments from each or do I need to consolidate them into one first? Since we file our taxes… read more…
- Ask an Advisor: My Advisor Charges a 2% Fee But He Doesn’t Provide Tax Advice. I Have an $850k Portfolio. Am I Paying Too Much?
My advisor charges a 2% fee for financial advice. He does not provide tax advice. My portfolio is currently worth around $850,000. Does this fee sound appropriate? – Tim Without knowing the full scope of services delivered by the advisor, 2% may be too expensive for a portfolio of your size and for a relationship… read more…
- The Average Success for the Series 65 Test and How to Pass
If you’d like to become an investment advisor representative (IAR), you’ll need to first pass the Series 65 exam. The Series 65 exam is a North American Securities Administrators Association (NASAA) exam that’s administered by FINRA, the Financial Industry Regulatory Authority. Neither FINRA nor the NASAA publish official figures for the average success rate Series… read more…
- Ask an Advisor: Can My Partner Collect Spousal Benefits From Social Security? We’re in a Common Law Marriage
Does Social Security recognize common law or do you have to be legally married? My potential life partner is currently on disability collecting Social Security in a neighboring state. If the spousal rate is higher, can he then collect that and also continue to claim his disability? – Penny Yes, the Social Security Administration (SSA) does… read more…
- Ask an Advisor: How Do I Reduce My RMD to Just $25k So My Social Security Isn’t Taxed?
I’m in my first year of required minimum distributions of $36,000, which is causing me to be taxed on my $33,000 in Social Security benefits. What is a good strategy to reduce my RMDs below $25,000 so my Social Security benefits do not become taxable? Would taking a lump sum from my pre-tax IRA and… read more…
- Ask an Advisor: Do IRA Withdrawals Before I Turn 73 Count Toward My RMDs?
Do withdrawals from my pre-tax IRA and/or 401(k) accounts made before I turn 73 count toward my RMDs? Or do RMDs start at 73 without regard to prior withdrawals? I’m 70 now and still working and collecting Social Security, but plan to retire in 2025. -Luis Unfortunately, withdrawals from an IRA or 401(k) before age… read more…
- I’m Going to Get $2,700 per Month From Social Security. How Can I Reduce My Taxes?
Social Security plays a critical role in the retirement plans of millions of Americans, but how these benefits are taxed is sometimes overlooked. If you collect $2,700 per month in Social Security benefits, your check is well above the average retirement benefit of approximately $1,800 per month and it could mean that you’ll owe taxes… read more…
- Ask an Advisor: We’re in Our 70s With $120k in Savings and Social Security. How Do We Make It Last?
I’m 72 years old and my wife is 70. Over the years, some of our financial decisions were not the best, but we have enjoyed 45 years together so far, having two sons and now two daughter-in-laws and five grandchildren. Our problem is that because we wanted to give our sons the best of everything… read more…
- Ask an Advisor: Is a Backdoor Roth Conversion Taxable Even If I Didn’t Take a Deduction on My IRA Contributions?
I’d like to ask about the backdoor Roth IRA. Say you are over the income limit for Roth contributions, so you make a traditional contribution with no tax deduction and then do a backdoor Roth. Is that conversion taxable? If so, you would be paying tax on that money twice since you paid tax on… read more…
- Ask an Advisor: Can I Avoid Taxes on an IRA I Inherited From My Sister? I Don’t Need or Want Her Distributions Yet
I have an inherited IRA from a 90-year-old sister who had begun distributions before her death. I don’t need or want her distributions yet. Is there a more practical way I can currently avoid the distribution taxes on these funds without adding her distributions to mine until later? I am 86 and currently taking my… read more…
- Ask an Advisor: Our Retirement Fund is Losing Money. Should We Use It to Pay Off Our Mortgage and Make $20k in Home Improvements?
Should we take out money from our retirement investment fund to pay off our home loan and make improvements? Retirement fund is losing money and home values are going up. The fund is around $85,000-$90000. The balance on our home is $34,000 and we want to make $20,000 in improvements. We are both retired and… read more…
- Ask an Advisor: I Have $800k in a 401(k) and $5,270 in Monthly Income From Social Security and My Pension. How Much Will I Pay in Taxes in Retirement?
My monthly Social Security is $3,178, my pension will be $2,090 per month and my 401(k) has $800,000. If I use the 4% rule, where do I stand tax-wise? – Reggie Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column. You can also consider connecting with a… read more…
- Ask an Advisor: I’m 62 and My Husband Is 68. Can I Collect Spousal Benefits for 5 Years and Switch to My Own at Full Retirement Age?
My husband began drawing his Social Security at age 62. He is 68 now (born in 1955), while I am 62 (born 1961). If I begin to draw my Social Security now it will be reduced, of course. Can I collect spousal benefits from him now and then switch to my benefit at my full… read more…
- Number of Ultra High Net Worth Individuals in the World
In order for someone to be considered an “ultra-high-net-worth individual,” they typically need to have at least $30 million worth of net investable assets to their name. However, this isn’t really a legal definition. As the name suggests, ultra-high-net-worth individuals are the wealthiest people on the planet, including the world’s billionaires. These individuals sit significantly… read more…
- Ask an Advisor: My Dad Left Me $200k in an IRA, but I’m in the 35% Tax Bracket. How Should I Structure My Withdrawals?
I was left $200,000 in an IRA Beneficiary Distribution Account (BDA) when my father passed. I have 10 years to withdraw this money. I’m at the 35% federal tax rate currently and plan to make a similar annual income over the next 10 years. Taking the money out in one lump sum would not change… read more…
- I’m 70 With $1 Million in an IRA. How Do I Make Sure This Money Lasts the Rest of My Life?
Compared to many retirees, you are in an enviable position with $1 million socked away in your IRA at 70. Still, living a secure, comfortable retirement that can last two decades or more takes planning. Making sure your nest egg lasts requires assessing your personal situation, balancing risk, securing reliable income streams and understanding how… read more…
- Ask an Advisor: I Lost My Wife to COVID in 2021. Can I Collect Her Social Security Benefits? I’m 70 and Raising Our Grandson
I lost my wife to COVID-19 on Feb. 3, 2021. She worked several years at the same company that I’m still employed at now. I tried to talk to my local Social Security office right after her death, but they were no help. Can I apply for any of the Social Security benefits that she’s… read more…
- Ask an Advisor: How Do We Reduce Our Tax Bill When We Sell Our Second Home? We Bought It 6 Years Ago for $295k and Now It’s Worth $500k
We have a second home – a condo in the mountains – that was bought with cash for $295,000 approximately six years ago. It’s now worth at least $500,000. We are considering selling as our use is declining and maintenance costs and special assessments of the three-building complex are increasing. What are the options to… read more…
- Ask an Advisor: I’m 74 With $120k in My 401(k). Should I Get a Financial Planner to Help With RMDs?
I have a 401(k) with $120,000 in it. I’m 74 and getting the required minimum distribution at the end of each year. Do I need a retirement planner to help handle the withdrawal? – Susan While technically you don’t need a financial advisor to handle your retirement account withdrawals, it can be useful to talk… read more…
- Ask an Advisor: If I Apply for Spousal Benefits From My Ex-Husband, Do I Forfeit Max Social Security at Age 70?
I was born in 1957 and so was my ex-husband. He remarried, but I didn’t. Our full retirement age (FRA) is 66.5, but he started collecting Social Security at 65.5, one year early. For my own Social Security, I plan to wait until age 70 to maximize my benefits. If I apply for spousal benefits… read more…