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We're in Our Late 50s With $1.6 Million in Our 401(k)s. Should We Switch to Roth Contributions?
A Roth IRA offers significant benefits for retirees. As an after-tax account, distributions from Roth IRAs are typically tax-free. This can save you a lot of money in retirement, but at the cost of up-front tax payments while you’re saving. You will spend more to build your portfolio today, but will save money later. A […] The post We’re in Our Late 50s With $1.6 Million in Our 401(k)s. Should We Switch to Roth Contributions? appeared first on SmartReads by SmartAsset.
I Have $850,000 in an IRA and Would Receive $2,800 Monthly from Social Security. Can I Retire at 65?
For many retirees, prudent withdrawals from a wisely invested portfolio combined with Social Security benefits can provide a consistent income to support their spending needs. But what if you had $850,000 in an IRA and $2,800 in monthly Social Security benefits: would that be enough to retire at 65? To answer this question, you’d have […] The post I Have $850,000 in an IRA and Would Receive $2,800 Monthly from Social Security. Can I Retire at 65? appeared first on SmartReads by SmartAsset.
Ask an Advisor: Will $25k in Annuity Payments Cut My $50k RMD in Half?
I’m in my mid-70s and I’m considering purchasing an immediate single premium lifetime annuity for myself using a portion of my regular IRA account as the source of the premium I would be paying. Having been notified of my 2024 RMD based on the Dec. 31, 2023, balance (assume the RMD is $50,000), do the […] The post Ask an Advisor: Will $25k in Annuity Payments Cut My $50k RMD in Half? appeared first on SmartReads by SmartAsset.
I'm Going to Get $3,000 Per Month From Social Security. How Can I Reduce My Taxes?
When determining your income taxes in retirement and on your Social Security benefits, the IRS uses your “combined income” and filing status as the two main markers. At $36,000 a year from Social Security, none of your benefits would be taxable, since only half of your benefits are calculated into combined income. However most, if […] The post I'm Going to Get $3,000 Per Month From Social Security. How Can I Reduce My Taxes? appeared first on SmartReads by SmartAsset.
Tax Credits You Can Use to Reduce Your 2024 Taxes
Tax season has arrived, and when it comes to preparing your return remember this: deductions are good, but tax credits are better. Anyone who's paid taxes knows the value of deductions, which reduce the amount of your tax bill at your marginal tax rate. If you're in the 22% federal tax bracket and you deduct $2,000 in […] The post Tax Credits You Can Use to Reduce Your 2024 Taxes appeared first on SmartReads by SmartAsset.
I'm Selling My House and Netting $800k. Can I Avoid Taxes While Downsizing for Retirement?
When you sell a primary residence, the IRS allows you to exclude from your capital gains taxes the first $250,000 of profits if you file single or $500,000 of profits if you file jointly. You must include any surplus of those amounts in your taxable capital gains for the year, though. So, what if you […] The post I’m Selling My House and Netting $800k. Can I Avoid Taxes While Downsizing for Retirement? appeared first on SmartReads by SmartAsset.
Ask an Advisor: How Do I Structure My Withdrawals to Keep My Healthcare Subsidies? I'm 60 With $2.4 Million
At the age of 60, I recently entered retirement after being a business owner. I’ve been securing health insurance through the marketplace since its inception. Currently, my income is derived solely from withdrawing money from my taxable portfolio, comprising reported dividends and capital gains totaling less than $60,000 annually. An advantageous outcome of this approach […] The post Ask an Advisor: How Do I Structure My Withdrawals to Keep My Healthcare Subsidies? I’m 60 With $2.4 Million appeared first on SmartReads by SmartAsset.
I'm 62 With $1 Million in a 401(k). Should I Convert $100,000 Per Year to a Roth IRA to Avoid RMDs?
Retirees with significant assets often have to plan around required minimum distributions (RMDs). If you already have sufficient income and don't need the money in a pre-tax portfolio, annual RMDs can cost you significantly in otherwise-unnecessary taxes. For example, say that you have $1 million in a 401(k). The IRS could require you to withdraw […] The post I'm 62 With $1 Million in a 401(k). Should I Convert $100,000 Per Year to a Roth IRA to Avoid RMDs? appeared first on SmartReads by SmartAsset.
Do I Have to Worry About Taxes if I Loan a Family Member $45,000?
It’s common for family members to lend money amongst themselves, and many choose to charge less than market interest rates as a favor to loved ones. However, the IRS does care about these transactions so there are some things to think about as you’re planning such a loan. While the IRS does afford a break […] The post Do I Have to Worry About Taxes if I Loan a Family Member $45,000? appeared first on SmartReads by SmartAsset.
I Worked Two Jobs in 2023. Can I Get a Tax Credit for Paying Too Much in Payroll Taxes?
If you paid Uncle Sam more than his fair share in payroll taxes in 2023, you may be owed a refund. In 2023, you would have paid a combined 7.65% in payroll taxes on all employment-based earnings up to the annual limit. But if you worked two relatively high-paying jobs, there’s a chance that a […] The post I Worked Two Jobs in 2023. Can I Get a Tax Credit for Paying Too Much in Payroll Taxes? appeared first on SmartReads by SmartAsset.
We Are 65 With $1.9 Million in a 401(k) and IRA, and $5,200 Monthly From Social Security. What's Our Retirement Budget?
To really build a complete retirement budget as a couple, you’ll need to take into account both potential income sources and realistic expenses. While it's possible to come up with an estimated income or range of incomes from these figures, the expense side of the budget is equally important and potentially much more variable. Other […] The post We Are 65 With $1.9 Million in a 401(k) and IRA, and $5,200 Monthly From Social Security. What's Our Retirement Budget? appeared first on SmartReads by SmartAsset.
We Put $80k of Renovations Into Our Home. Do We Need to Report It to Our Homeowners Insurance?
Homeowners naturally know that the price tag for remodeling and improvements can be high. An average kitchen remodel, according to Home Advisor, costs more than $40,000, while a lavish makeover that includes custom cabinetry, fancy tile backsplashes and restaurant-quality appliances can run more than $130,000. A financial advisor can help you plan for major home […] The post We Put $80k of Renovations Into Our Home. Do We Need to Report It to Our Homeowners Insurance? appeared first on SmartReads by SmartAsset.
Ask an Advisor: If I Delay My First RMD, Can I Count It as Income for the Previous Year?
If I turn 73 in 2025 and take out my first RMD before Dec. 31, 2025, it would be 2025 income. If I wait until the April 1, 2026 deadline for RMDs, would the withdrawal still count as 2025 income? I still have to take another RMD before Dec. 31, 2026, which would be 2026 […] The post Ask an Advisor: If I Delay My First RMD, Can I Count It as Income for the Previous Year? appeared first on SmartReads by SmartAsset.
We're 62 and Have $1.6 Million in Our 401(k)s. Should We Pivot to Roth Contributions?
By your early 60s, you’ll likely be paying close attention to your finances and retirement savings. This may include making crucial decisions on investment structure, risk tolerance, income needs and tax planning, among the many other moving parts of your financial life. A financial advisor can help you plan and save for retirement. Find a […] The post We’re 62 and Have $1.6 Million in Our 401(k)s. Should We Pivot to Roth Contributions? appeared first on SmartReads by SmartAsset.
When Should I Take My First RMD?
You may not be thinking about required minimum distributions (RMDs) throughout your career, but chances are that they’ll be on your mind once you hit your 70s. RMDs are a critical part of retirement planning. A financial advisor can help you prepare for these mandatory withdrawals, which can have a significant impact on your taxes. […] The post When Should I Take My First RMD? appeared first on SmartReads by SmartAsset.
This Is My First Year Taking Social Security. How Do I Reduce My Taxes on It?
As your first year of retirement progresses, it's important to evaluate whether the financial plan you laid out to ensure your sustainable well-being is going according to plan. An appropriate plan should include tax calculations to understand how much of your income will truly be at your disposal for needs and wants. Some people may […] The post This Is My First Year Taking Social Security. How Do I Reduce My Taxes on It? appeared first on SmartReads by SmartAsset.
We're 65, Have $120k Left on Our Mortgage and an IRA Worth $650k. Should We Pay Off the Mortgage?
Should you prioritize debt or savings? This is one of the most common questions in household finance, and it comes up particularly in the field of retirement savings. For this example, let’s say you have a $650,000 IRA and a $120,000 mortgage. As you approach retirement, should you leave that money invested or pay off […] The post We're 65, Have $120k Left on Our Mortgage and an IRA Worth $650k. Should We Pay Off the Mortgage? appeared first on SmartReads by SmartAsset.
I Have $1.7M Invested With My Advisor and I Pay a 1% Fee. Am I Paying Too Much?
When it comes to financial advice, what you pay can vary based on what you get. An advisor who simply sets you up with a passive S&P 500 index fund might not be worth a 1% fee, while an advisor who helps you manage taxes and cash flow, plan for retirement and save for your […] The post I Have $1.7M Invested With My Advisor and I Pay a 1% Fee. Am I Paying Too Much? appeared first on SmartReads by SmartAsset.
I'm 63 With a $1.6 Million Net Worth and $4,500 in Monthly Expenses. Can I Retire Now?
With a $1.6 million net worth and $4,500 in monthly expenses, retiring at 63 is a possibility, but quite a bit of that depends on your circumstances. The income your net worth will generate depends first on how much of it is in the form of liquid assets. Your personal risk tolerance is another key […] The post I'm 63 With a $1.6 Million Net Worth and $4,500 in Monthly Expenses. Can I Retire Now? appeared first on SmartReads by SmartAsset.
I'm 59 With $1.3 Million in a 401(k). How Do I Make Sure This Money Lasts the Rest of My Life?
Managing your money properly in retirement is critical for ensuring that it lasts as long as you do. For example, imagine you have $1.3 million in a 401(k) before age 60. While this is a considerable amount, a 4% withdrawal rate would only generate $52,000 per year. You’d also run the risk of running out […] The post I'm 59 With $1.3 Million in a 401(k). How Do I Make Sure This Money Lasts the Rest of My Life? appeared first on SmartReads by SmartAsset.
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