3 Birthdays You Need to Know for Your Retirement Accounts
Optimizing your retirement savings takes more than just making sure your IRA isn’t at risk in this market. There are rules and regulations that can help you avoid higher taxes and penalty fees and help you structure your income to minimize taxes. Know these 3 ages that can help you get the most out of your retirement accounts. Take Catch-up Contributions at 50 At age 50, workers with certain qualified retirement plans can make annual “catch-up” contributions in addition to their normal contributions. In 2022, you can contribute up to $6,000 to an IRA if you are under 50 […]
Going “Back to School” on Your Retirement Plan
When you think about your school years, whether your high school, college, or post-grad days, you’ll revisit memorable moments from when you had your whole life ahead of you. Schooling is all about providing students with the tools they need to achieve their future potential. When it comes to retirement planning, the same is true! Believe it or not, you have your whole life ahead of you in retirement as well, so make sure you’re prepared. Revisit your Risk Tolerance Ask yourself, is your risk tolerance reflected in your retirement portfolio? Striking a balance between high-risk and low-risk assets […]
5 Key Components to the Retirement Bucket Strategy
Saving for retirement is a long-term endeavor. It’s not about finding the next hottest stock or trying to get rich quickly. It requires a different perspective on your wealth and income that accounts for your needs in different stages of your life, from the beginning of your working years through your retirement. These five key components will help simplify the bucket strategy so you can understand it and apply it to your retirement strategy. The Risk Bucket The retirement bucket strategy refers to the idea that your retirement savings can be separated into three buckets, one of them being […]
Retirement Requires a New Perspective on Wealth and Income
Last year, you may not have worried about market downturns or cost-of-living increases, but with market volatility and inflation threatening retirement plans this year, it’s important to make sure you know your options when it comes to protecting your wealth, earning income, and knowing the difference between both. Keeping Your Income at Pace with Inflation Income is the basis of how we cover our costs of living. But when inflation causes prices to rise, the fixed income you may have been receiving or planned to receive in your retirement might not stretch as far as you thought. Unfortunately, you […]
You’re Ready to Retire – But Are Your Finances?
Many people feel ready to retire, but fewer are financially ready to do so. It’s one thing to feel you’ve accomplished enough in your career or even that you’ve saved enough, but it’s another to have a plan in place that covers everything important. If you’re ready to retire, consider your finances. Have a Plan, Not Just a Portfolio Now that you’ve accumulated wealth, the question becomes how you’ll use it to fund your retirement. As we’ve seen, the market is unpredictable. It’s one thing to have a bunch of investments, but it’s another thing to have a retirement […]
Will You Have Tax-Advantaged Buckets in Retirement?
You’ll likely have several sources of income in retirement that can be taxed, such as IRA distributions and Social Security benefits. But, do you have any after-tax “buckets” that you can use strategically in retirement to help reduce your tax bill? There may be a few options available to you, so know how they work. How is a Roth IRA Different from a Traditional IRA? Many people contribute pre-tax dollars to a traditional IRA during their working years. When money is distributed, it’s taxed at ordinary income rates. In contrast, a Roth IRA is funded with after-tax dollars. A […]
Four Common Retirement Mistakes You Could Be Making
Practice makes perfect, but unfortunately, retirement isn’t something you can practice. It typically happens one time, and there may not be many opportunities to learn from your mistakes. The best way to avoid making mistakes in the first place is to educate yourself and create a plan. Here are some common retirement mistakes you could be making. Wishing for the Best Instead of Preparing for the Worst We saw record highs in 2021, but 2022 may turn out to be an entirely different story. The market may continue to react poorly to the prospect of slow economic growth, rising […]
Three Unexpected Taxes in Retirement
When we think of major retirement expenses, we often consider housing, healthcare, and that trip of a lifetime we’ve been dreaming about for years. But, we often fail to consider what could potentially be our biggest expense – taxes. Many of your sources of income in retirement are taxable, so don’t overlook these three unexpected taxes in retirement. Tax on Your Social Security Benefit Although you’ve paid into Social Security your entire working life, your benefit could be taxed, depending on your income. To figure out if your benefit can be taxed, add up your adjusted gross income, nontaxable […]
3 Major Retirement Expenses to Include in Your Budget
General retirement planning advice says that you’ll need about 80% of your pre-retirement income in retirement, but this may not be the case for everyone. Inflation, taxes, and long-term care costs are easily overlooked – but these expenses could be high. When creating your retirement budget, don’t forget to include these three expenses. Taxes: How Much Will You Pay in the Future? It’s easy to forget about taxes after you file, but it’s important to think long-term when it comes to your tax burden. Your tax situation can change significantly in retirement, but that doesn’t necessarily mean you’ll pay […]
The Retirement Rules Could Change Soon – Have a Response
If you have a financial plan in place, you may think you’re set. However, the rules of retirement are always subject to change. We’ve seen new retirement legislation in the last few years and could see more soon. It’s important to understand how you could be affected and think about how you will respond. The End of the “Stretch IRA” The first SECURE Act, passed in 2019, changed the rules for inherited retirement accounts: Instead of allowing those who inherit 401(k)s or IRAs to “stretch” distributions over their lifetime, they now must empty the account within 10 years of […]
