- My Dad Passed Away. How Can I Access His Retirement Funds?
When faced with the death of a parent, many find themselves asking whether they can claim their parent’s retirement funds. Accessing your father’s retirement funds can depend on various factors such as the type of retirement account he held and whether you are a named beneficiary. Typically, accounts like IRAs or 401(k)s allow for beneficiary… read more…
- How to Stay Socially Active as a Retiree
Retirement can be an exciting new chapter, offering ample opportunities to stay socially active. Engaging in community activities, joining clubs and pursuing hobbies can significantly enhance your social life. Whether it’s volunteering, participating in fitness classes or attending local events, finding ways to stay socially active in retirement is important for maintaining a fulfilling and… read more…
- Does Workers’ Compensation Affect Social Security Benefits?
Workers’ compensation, which provides financial support for employees injured on the job, can impact the amount you receive from Social Security. Specifically, if you’re receiving workers’ comp, your Social Security Disability Insurance (SSDI) benefits might be reduced to prevent your combined income from exceeding certain limits. This interaction is designed to balance the benefits you… read more…
- When to Start Saving for Retirement
Determining when to start saving for retirement can have a major impact on your financial future. Beginning early allows you to take full advantage of compound interest, which is when you earn money on both your savings and the interest you’ve already earned. Starting to save in your 20s or 30s provides a longer time… read more…
- We’re 62 With $1.1 Million in 401(k)s. Should We Convert $100,000 Per Year to Avoid RMDs?
Converting 401(k) funds into Roth accounts can reduce or eliminate the need to take Required Minimum Distributions (RMDs) that can bump you into a higher tax bracket in retirement. Voluntary Roth withdrawals, meanwhile, are tax-free, potentially giving the conversion strategy twice the appeal. Converting 401(k) funds gradually, before you’re required to take RMDs at age… read more…
- At What Age Should You Retire From the Federal Government?
Federal employees generally receive annuity-based pension funds when they retire. Depending on when you joined the government, this may be supplemented by Social Security and a private savings plan. The amount you receive from these various programs depends, among other things, on how long you worked for the government and at what age you retire. As… read more…
- I Will Claim a $3,750 Social Security Benefit. Will My Wife Automatically Get a Spousal Benefit?
Social Security spousal benefits allow a spouse to receive a portion of their partner’s benefit if certain criteria are met. If one spouse claims a monthly benefit of $3,750, the other may be eligible for a spousal benefit, which typically amounts to up to 50% of the primary earner’s benefit. However, eligibility isn’t automatic –… read more…
- Defined Benefit Plans for the Self-Employed
Unlike other retirement plans, a defined benefit plan for the self-employed promises a specific payout upon retirement, calculated based on factors like salary history and duration of employment. This plan allows for significant tax-deferred contributions, often exceeding those permitted in standard retirement accounts. Establishing a defined benefit plan requires meticulous calculations and annual contributions to… read more…
- How to Claim Spousal Social Security Benefits
If you’re married, divorced or widowed, you may be wondering how to claim spousal security benefits based on your spouse’s work record. This can be particularly beneficial if your own earnings history is lower, or you’re planning a retirement budget. To start the process, you must make sure that you meet the eligibility criteria. Here’s… read more…
- I’m 63 and Make $125k, With $900k in an IRA. Should I Do a Roth Conversion on $90k per Year to Avoid RMDs?
Converting an IRA to a Roth IRA is a popular approach to avoiding mandatory required minimum distributions (RMDs) — and the associated taxes — in your 70s and beyond. Doing it gradually can stretch out and even reduce the tax bill compared to converting it all at once. In your case, the key question is… read more…
- What Is Excess Accumulation in Qualified Retirement Plans?
Navigating the rules and regulations surrounding qualified retirement plans like 401(k)s can be complex, particularly when it comes to required minimum distributions (RMDs). When these mandatory withdrawals are not taken on time or in sufficient amounts, the funds that are not withdrawn will be considered excess accumulation and subject to tax penalties. A financial advisor… read more…
- How to Maximize Retirement Savings
Strategic planning and informed decision-making are key when it comes to how to maximize your retirement savings. By understanding the various retirement accounts available, taking advantage of employer-sponsored plans and consistently contributing to your savings, you can build a robust financial foundation for your future. Additionally, exploring tax-advantaged options and regularly reviewing your investment portfolio… read more…
- How to Make a Retirement Income Plan
When it comes to how to plan for retirement income, start by evaluating your anticipated living expenses, considering healthcare costs and taking into account the amount you’ll need for leisure activities and potential emergencies. Then, assess your expected sources of income and develop a withdrawal strategy that aligns with your lifestyle and longevity expectations. By taking… read more…
- What Is the Solo 401(k) Contribution Deadline?
A solo 401(k) plan is a powerful retirement savings tool designed specifically for self-employed individuals and business owners without employees. These plans allow for both employee and employer contributions, providing flexibility and the potential for substantial tax advantages. To fully benefit from this retirement savings vehicle, however, it’s important to be aware of solo 401(k)… read more…
- When Can My Spouse Claim Social Security Benefits?
Knowing when a spouse can claim Social Security benefits can significantly impact retirement planning. Spousal benefits allow one partner to receive a portion of the other partner’s Social Security benefits, providing financial support in retirement. By understanding the eligibility criteria, the impact of full retirement age and the effect of early or delayed claims, among… read more…
- I’m 52 With $1.6 Million in a Taxable Brokerage Account and $1.1 Million in an IRA. Can I Retire Now?
It can be financially feasible to retire when projected retirement income equals or exceeds projected retirement expenses. In many cases, withdrawals from $1.6 million in a taxable brokerage account and $1.1 million in an IRA will total more than a typical retiree’s expenses. However, much depends on the desired retirement lifestyle. Age at retirement is… read more…
- What Is an Active Participant in a Retirement Plan?
Active participation in a retirement plan refers to an individual being involved in an employer-sponsored retirement program, like a 401(k) or pension plan, during a given tax year. This status affects eligibility for certain tax benefits, including the ability to deduct contributions to a traditional IRA. Knowing whether you are an active participant and understanding… read more…
- 9 Steps to Planning for Retirement
Planning for retirement involves a series of well-defined steps that aim to maintain financial stability and offer greater peace of mind in later years. Your first step will be to set clear retirement goals. This can help you assess your current financial situation, including savings and investments. Creating a detailed budget helps track expenses and… read more…
- Differences in the Types of Retirement Plans
There are many retirement plans available to help you save for your golden years. 401(k)s, IRAs and Roth IRAs offer unique benefits and tax advantages tailored to different financial goals and employment situations. Choosing the right plan can affect your savings strategy, tax liabilities and overall retirement readiness, which is why carefully comparing the available… read more…
- How Thrift Savings Plans Are Affected by a Divorce
A Thrift Savings Plan (TSP) can be divided in a divorce through a court-issued Retirement Benefits Court Order (RBCO). This document must meet specific federal requirements to be honored by the TSP, and it can award a portion of the account to a former spouse. These orders ensure a fair distribution of retirement savings between… read more…
- I’m 65 With $1.2 Million in an IRA. I’ll Get a $2,900 Monthly Social Security Benefit. What’s My Retirement Budget?
As you approach retirement, your financial focus shifts. During your working life, retirement is about goals and planning. You decide what kind of lifestyle you want, figure out what kind of income will support that spending and then build a savings and investment plan to reach those goals. That should be your retirement approach at… read more…
- How Are Fixed Annuities Taxed?
Fixed annuities are popular for their stability and guaranteed returns, but it’s also important to understand the tax implications of this type of annuity when using it as part of your financial planning. The funds you contribute to a fixed annuity typically grow tax-deferred, meaning you won’t owe taxes on the interest earnings until you… read more…
- How Are Non-Qualified Annuities Taxed for Beneficiaries?
Non-qualified annuities offer tax-deferred growth, providing financial benefits during the annuity holder’s lifetime. When the annuity holder passes away, their beneficiary inherits the annuity, which comes with some specific tax implications. Understanding how inherited non-qualified annuities are taxed to beneficiaries is an important part of effective estate planning and tax management. Consulting with a financial… read more…
- What Is the Minimum Annuity Investment You Can Make?
Annuities offer a reliable source of retirement income. But if you’re wondering how much it takes to buy an annuity, the minimum investment required can vary. Generally, the initial investment for an annuity starts around $5,000 to $10,000, depending on the type of annuity and the provider. As you’re beginning your retirement planning, it can… read more…
- Factors That Determine the Amount of Your Social Security Benefits
Understanding what your Social Security benefit is based on can significantly impact your financial planning for retirement. The amount you receive hinges on several factors, including your lifetime earnings, the age you start claiming benefits, and the number of years you’ve worked. Additionally, the Social Security Administration uses a formula to calculate your benefits, which… read more…