| KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIALGROUP.COM |
The 7 Biggest Retirement
Planning Mistakes You
Can Avoid ...
Retirement can cause anxiety and many feel
overwhelmed and unprepared.
In fact, one of the biggest dilemmas for
those approaching retirement is balancing
the life they want to live today with the life
they want to live in retirement.
The general rule of thumb is to figure that
you will need approximately 80% of your
current annual income in retirement.
Planning Mistakes You
Can Avoid ...
Retirement can cause anxiety and many feel
overwhelmed and unprepared.
In fact, one of the biggest dilemmas for
those approaching retirement is balancing
the life they want to live today with the life
they want to live in retirement.
The general rule of thumb is to figure that
you will need approximately 80% of your
current annual income in retirement.
The 5 Biggest Retirement
Planning Mistakes You
Can Avoid
Retirement Planning
Mistake #1: Living Too
Large
The first question I ask clients when
discussing their retirement plan is, ‘how
much income do you need to maintain your
current lifestyle in retirement?’
Not surprisingly, for the vast majority the
answer is, “I don’t know,” or they’ve made
an inaccurate assumption.
If the assumption is too high, the goal of
retirement may seem absolutely
unattainable, and the entire planning
process is discouraging.
If the assumption is too low, which is most
often the case, the retiree could run into a
difficult financial situation later in life and
have to make drastic, unwanted changes.
Planning Mistakes You
Can Avoid
Retirement Planning
Mistake #1: Living Too
Large
The first question I ask clients when
discussing their retirement plan is, ‘how
much income do you need to maintain your
current lifestyle in retirement?’
Not surprisingly, for the vast majority the
answer is, “I don’t know,” or they’ve made
an inaccurate assumption.
If the assumption is too high, the goal of
retirement may seem absolutely
unattainable, and the entire planning
process is discouraging.
If the assumption is too low, which is most
often the case, the retiree could run into a
difficult financial situation later in life and
have to make drastic, unwanted changes.
The 5 Biggest Retirement
Planning Mistakes You
Can Avoid
Retirement Planning
Mistake #2: Disregarding
Higher Health Care Costs
One of the most overlooked areas of
retirement planning is estimating what
health care costs could be in retirement,
and including this in the calculation of
income needs.
Fidelity estimated that a 65-year-old
married couple that retired in 2012 will
incur an average of $240,000 in
healthcare costs alone in retirement.
By overlooking this large potential outlay,
retirees could feel strapped for cash in
their most vulnerable years.
Often, people assume Medicare will
cover these expenses in retirement but
this simply is not true. Medicare costs to
retirees are rising each year so it’s
important to know what to expect.
Planning Mistakes You
Can Avoid
Retirement Planning
Mistake #2: Disregarding
Higher Health Care Costs
One of the most overlooked areas of
retirement planning is estimating what
health care costs could be in retirement,
and including this in the calculation of
income needs.
Fidelity estimated that a 65-year-old
married couple that retired in 2012 will
incur an average of $240,000 in
healthcare costs alone in retirement.
By overlooking this large potential outlay,
retirees could feel strapped for cash in
their most vulnerable years.
Often, people assume Medicare will
cover these expenses in retirement but
this simply is not true. Medicare costs to
retirees are rising each year so it’s
important to know what to expect.
Retirement Planning
Mistake #3: No Long-Term
Care Plan
Anyone who has cared for an aging parent
knows first-hand the toll it can take on
their loved ones and their savings. Both
the time and money needed to provide
quality care can be staggering.
According to the US Department of Health,
70% of people over 65 will require care at
some point in their lives.
-------------
medical costs are projected to continue
rising faster than inflation, these costs
adds up quickly.
It’s important to know your long-term care
options and how you plan to pay for these
future expenses if you need to.
Mistake #3: No Long-Term
Care Plan
Anyone who has cared for an aging parent
knows first-hand the toll it can take on
their loved ones and their savings. Both
the time and money needed to provide
quality care can be staggering.
According to the US Department of Health,
70% of people over 65 will require care at
some point in their lives.
-------------
medical costs are projected to continue
rising faster than inflation, these costs
adds up quickly.
It’s important to know your long-term care
options and how you plan to pay for these
future expenses if you need to.
Retirement Planning
Mistake #4: Not Saving
Enough Then and Now:
Don’t wait to start saving for retirement.
The sooner you get started, the greater
your chance of reaching your retirement
goal because compound interest can work
its magic. To quote Einstein, “Compound
interest is the eighth wonder of the world.
He who understands it, earns it ... he who
doesn't ... pays it.”
So here’s how the math works: To have $1
million at age 65, a 25-year-old needs to
save $345 per month for 20 years then
never save another cent, assuming the
investments earn 8% per year over those
40 years. A 45-year-old would need to save
$1,698 per month for the next 20 years to
reach the same goal.
Those savings goals may be out of reach
for both the younger and older person. The
key is to make saving for retirement a
priority and start saving some amount each
month.
Retirement Planning Mistake #5: Not
Updating Your Retirement Plan
Mistake #4: Not Saving
Enough Then and Now:
Don’t wait to start saving for retirement.
The sooner you get started, the greater
your chance of reaching your retirement
goal because compound interest can work
its magic. To quote Einstein, “Compound
interest is the eighth wonder of the world.
He who understands it, earns it ... he who
doesn't ... pays it.”
So here’s how the math works: To have $1
million at age 65, a 25-year-old needs to
save $345 per month for 20 years then
never save another cent, assuming the
investments earn 8% per year over those
40 years. A 45-year-old would need to save
$1,698 per month for the next 20 years to
reach the same goal.
Those savings goals may be out of reach
for both the younger and older person. The
key is to make saving for retirement a
priority and start saving some amount each
month.
Retirement Planning Mistake #5: Not
Updating Your Retirement Plan
Retirement Planning
Mistake #5: Not Updating
Your Retirement Plan
Markets rise and fall, as do levels of
income and expenses, so it is important
that your retirement plan be revisited
every few years to take this into account.
If your last retirement plan was done five
years ago, prior to your second child
being born, your spouse’s promotion, and
your mother moving in, chances are your
retirement plan is based on a lifestyle that
is no longer relevant.
If you are one of the many folks under 65
that are out of work and struggling to find
employment, you may be considering
throwing in the towel to embrace early
retirement.
Mistake #5: Not Updating
Your Retirement Plan
Markets rise and fall, as do levels of
income and expenses, so it is important
that your retirement plan be revisited
every few years to take this into account.
If your last retirement plan was done five
years ago, prior to your second child
being born, your spouse’s promotion, and
your mother moving in, chances are your
retirement plan is based on a lifestyle that
is no longer relevant.
If you are one of the many folks under 65
that are out of work and struggling to find
employment, you may be considering
throwing in the towel to embrace early
retirement.
Retirement Planning
Guide
Retirement can be a time to explore new
possibilities or to slow down and fully enjoy
the life you spent your working years
building—or it can be a bit of both.
Here, you'll find expert guidance on all the
elements that contribute to a good retirement:
saving and investing; planning; maintaining
your health; identifying activities and work to
suit you; and, of course, being a savvy
consumer.
Guide
Retirement can be a time to explore new
possibilities or to slow down and fully enjoy
the life you spent your working years
building—or it can be a bit of both.
Here, you'll find expert guidance on all the
elements that contribute to a good retirement:
saving and investing; planning; maintaining
your health; identifying activities and work to
suit you; and, of course, being a savvy
consumer.
How to Maximize
Your Social Security
Benefits?
Maximizing your Social Security benefits
isn't easy, especially since there are
hundreds of rules governing payments
alone.
But since most retired Americans depend
primarily on Social Security, it's important to
get everything you're entitled to.
"Claiming benefits early frequently costs
people hundreds of thousands of dollars in
reduced benefits over their lifetime,
Your Social Security
Benefits?
Maximizing your Social Security benefits
isn't easy, especially since there are
hundreds of rules governing payments
alone.
But since most retired Americans depend
primarily on Social Security, it's important to
get everything you're entitled to.
"Claiming benefits early frequently costs
people hundreds of thousands of dollars in
reduced benefits over their lifetime,
Planning Tip: Create a free,
mySocialSecurity account for
access to your personalized
Social Security statement, which
includes estimates of your future benefits.
You also can use it to verify earnings history, on
which Social Security benefits calculation are
based.
-------------
Wait to Tap Into Your Social Security Benefits
While you’re allowed to start taking Social
Security at age 62, it’s a good idea to wait until
you’re 70 to start.
According to a recent survey by Nationwide
Retirement Institute, a research arm of the giant
insurer, 30 percent of pre-retirees expect to
draw Social Security before their full retirement
age.
But about a quarter of those who tapped into
Social Security early say they now regret doing
so. That’s because your retirement benefit
grows every year that you wait.
If you’re currently at the full retirement age of
66, for instance, waiting until you’re 70 years old
to claim will raise your retirement benefit a
guaranteed 8 percent annually.
mySocialSecurity account for
access to your personalized
Social Security statement, which
includes estimates of your future benefits.
You also can use it to verify earnings history, on
which Social Security benefits calculation are
based.
-------------
Wait to Tap Into Your Social Security Benefits
While you’re allowed to start taking Social
Security at age 62, it’s a good idea to wait until
you’re 70 to start.
According to a recent survey by Nationwide
Retirement Institute, a research arm of the giant
insurer, 30 percent of pre-retirees expect to
draw Social Security before their full retirement
age.
But about a quarter of those who tapped into
Social Security early say they now regret doing
so. That’s because your retirement benefit
grows every year that you wait.
If you’re currently at the full retirement age of
66, for instance, waiting until you’re 70 years old
to claim will raise your retirement benefit a
guaranteed 8 percent annually.
Claim a Spousal Benefit
If you didn’t pay into Social Security for at least
40 quarters (10 years) but your spouse did—or
your earnings were less than your spouse's,
you can gain from claiming a spousal benefit.
The amount can be up to half of what the
working spouse is entitled to at full retirement
age. The amount you receive has no impact on
the payment your spouse will receive.
Keep in mind that you can only claim the
spousal benefit if your spouse has already
filed for a retirement or disability benefit.
If you didn’t pay into Social Security for at least
40 quarters (10 years) but your spouse did—or
your earnings were less than your spouse's,
you can gain from claiming a spousal benefit.
The amount can be up to half of what the
working spouse is entitled to at full retirement
age. The amount you receive has no impact on
the payment your spouse will receive.
Keep in mind that you can only claim the
spousal benefit if your spouse has already
filed for a retirement or disability benefit.
Decide Whether to Claim a
Spousal Benefit If Both
Spouses Worked
If you both worked but your spouse made
significantly more income, you may want to
claim the spousal benefit instead of taking
your own retirement benefit—it could turn
out to be more.
Or, you could sign a "restricted application"
to claim just your spousal benefit now, and
wait ‘til full retirement age or older to claim
your own retirement benefit, which by that
time may be greater.
By indicating that intent on your Social
Security benefits application, you'll be able
to switch back to your retirement benefit
when the time is right.
(This option is only available to people who
turned 62 before January 2 of this year.)
The Social Security Administration offers a
calculator that can help you figure your
spousal benefit.
Spousal Benefit If Both
Spouses Worked
If you both worked but your spouse made
significantly more income, you may want to
claim the spousal benefit instead of taking
your own retirement benefit—it could turn
out to be more.
Or, you could sign a "restricted application"
to claim just your spousal benefit now, and
wait ‘til full retirement age or older to claim
your own retirement benefit, which by that
time may be greater.
By indicating that intent on your Social
Security benefits application, you'll be able
to switch back to your retirement benefit
when the time is right.
(This option is only available to people who
turned 62 before January 2 of this year.)
The Social Security Administration offers a
calculator that can help you figure your
spousal benefit.
Don't Claim Social Security
Benefits Early If You’re Still
Working
Unless you need Social Security benefits to cover your
expenses while you are still working, it's better not to
claim early. If you do, you won't be entitled to as much
as you would have received had you waited to claim at
full retirement age.
Also, a portion of your monthly benefit will be withheld
on earnings over $15,720. Once you reach full
retirement age (age 66 or 67 depending on when you
were born), your monthly benefits are adjusted upward
to account for the money that was withheld while you
were working.
Benefits Early If You’re Still
Working
Unless you need Social Security benefits to cover your
expenses while you are still working, it's better not to
claim early. If you do, you won't be entitled to as much
as you would have received had you waited to claim at
full retirement age.
Also, a portion of your monthly benefit will be withheld
on earnings over $15,720. Once you reach full
retirement age (age 66 or 67 depending on when you
were born), your monthly benefits are adjusted upward
to account for the money that was withheld while you
were working.
Claim Your Ex-Spouse’s
Social Security Benefits
Even if you are divorced, you can
still claim spousal benefits based on the earnings
record of your ex-spouse, as long as both of you
are 62 or older and you were married for 10 years
or more.
Your ex-spouse cannot oppose this and does not
have to claim Social Security in order for you to
make your claim, as long as you’ve been divorced
for at least two years, and you are not currently
married.
And your benefit has no effect on what your ex-
spouse or his or her new spouse receives in
benefits.
At full retirement age you can file a restricted
application to get your spousal benefit; wait until
age 70 to collect your retirement benefit, which
will have grown in the interim. (Again, you only can
use the restricted application option if you were
born on or before
If you remarry, you can no longer collect the
spousal benefit based on your former spouse’s
work record. If you remain single, you can
continue to collect indefinitely.
Social Security Benefits
Even if you are divorced, you can
still claim spousal benefits based on the earnings
record of your ex-spouse, as long as both of you
are 62 or older and you were married for 10 years
or more.
Your ex-spouse cannot oppose this and does not
have to claim Social Security in order for you to
make your claim, as long as you’ve been divorced
for at least two years, and you are not currently
married.
And your benefit has no effect on what your ex-
spouse or his or her new spouse receives in
benefits.
At full retirement age you can file a restricted
application to get your spousal benefit; wait until
age 70 to collect your retirement benefit, which
will have grown in the interim. (Again, you only can
use the restricted application option if you were
born on or before
If you remarry, you can no longer collect the
spousal benefit based on your former spouse’s
work record. If you remain single, you can
continue to collect indefinitely.
Financial Planning: Personal
Wealth Management.
Investing tools and
resources for a better
tomorrow.
--------
Financial Knowledge - Financial Literacy And
Financial Education At Knowledge Financial
Group - knowledgefinancial.com
-------------
Investment Products: Investments
may lose value - May not be FDIC insured - May
not be guaranteed. Buyers, investors beware.
----------
When it comes to investing; investors get to be
more vigilent, not less.
Calling oneself a fiduciary is easier than living
up to the standard.. Investors Beware
------------
Financial Professional - Financial Adviser -
Financial Planner - Insurance Agent -
---------
Retirement Planning Made Easy.
But not one size fits all!
Wealth Management.
Investing tools and
resources for a better
tomorrow.
--------
Financial Knowledge - Financial Literacy And
Financial Education At Knowledge Financial
Group - knowledgefinancial.com
-------------
Investment Products: Investments
may lose value - May not be FDIC insured - May
not be guaranteed. Buyers, investors beware.
----------
When it comes to investing; investors get to be
more vigilent, not less.
Calling oneself a fiduciary is easier than living
up to the standard.. Investors Beware
------------
Financial Professional - Financial Adviser -
Financial Planner - Insurance Agent -
---------
Retirement Planning Made Easy.
But not one size fits all!
Have your retirement in a place with
clear, transparent language to better
help you understand your options.
-----------
How to get the most out of social
security and medicare benefits.
----------
Educate yourself with the up-to-date
information, improve your
knowledge, increase your skills at
Knowledge Financial Group -
knowledgefinancial.com
clear, transparent language to better
help you understand your options.
-----------
How to get the most out of social
security and medicare benefits.
----------
Educate yourself with the up-to-date
information, improve your
knowledge, increase your skills at
Knowledge Financial Group -
knowledgefinancial.com
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| '' Banking & Finance -- '' Business & Investing -- '' Economy & Commerce -- '' Entrepreneurship & Employment = '' Wealth Creation & Management Strategies''= '' Money & The Stock Market'' '' Government & Subsidies -- '' Wall Street Market Millionaires'' |
The Ultimate Retirement Guide for Everyone;
Retire Rich, Retire Early.
THE BEST RETIREMENT GUIDE EVER; WHAT
ARE 401K, ROTH 401K, INDIVIDUAL 401K,
403B, 457 PLAN, THRIFT SAVINGS PLAN.
What is a SEP IRA? What is a SIMPLE IRA? ---
SEE BELOW!
Long-term care insurance?
Is a long-term care insurance policy really
provides money to help cover the costs of
living if you are no longer able to take care of
yourself.?
SOCIAL SECURITY RETIREMENT GUIDE.
HOW DOES SOCIAL SECURITY WORK?
What is the importance and benefits of life
insurance in real life, and at retirement age?
Pension Plans / IRA / INDIVIDUAL
RETIREMENT ACCOUNT. What is an IRA? And
what does it matter?
What is Annuity Insurance Investment, Annuity
& Pension Insurance? Are Annuities Planning
today for a secure tomorrow?
Retire Rich, Retire Early.
THE BEST RETIREMENT GUIDE EVER; WHAT
ARE 401K, ROTH 401K, INDIVIDUAL 401K,
403B, 457 PLAN, THRIFT SAVINGS PLAN.
What is a SEP IRA? What is a SIMPLE IRA? ---
SEE BELOW!
Long-term care insurance?
Is a long-term care insurance policy really
provides money to help cover the costs of
living if you are no longer able to take care of
yourself.?
SOCIAL SECURITY RETIREMENT GUIDE.
HOW DOES SOCIAL SECURITY WORK?
What is the importance and benefits of life
insurance in real life, and at retirement age?
Pension Plans / IRA / INDIVIDUAL
RETIREMENT ACCOUNT. What is an IRA? And
what does it matter?
What is Annuity Insurance Investment, Annuity
& Pension Insurance? Are Annuities Planning
today for a secure tomorrow?
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Required Distribution...
Everything You Need To
Know About Required
Distributions..
-------------
Your required minimum distribution is the
minimum amount you must withdraw from
your account each year.
You generally have to start taking
withdrawals from your IRA, SEP IRA, SIMPLE
IRA, or retirement plan account when you
reach age 70½. Roth IRAs do not require
withdrawals until after the death of the
owner.
Everything You Need To
Know About Required
Distributions..
-------------
Your required minimum distribution is the
minimum amount you must withdraw from
your account each year.
You generally have to start taking
withdrawals from your IRA, SEP IRA, SIMPLE
IRA, or retirement plan account when you
reach age 70½. Roth IRAs do not require
withdrawals until after the death of the
owner.
Retirement Plan and IRA
Required Minimum
Distributions FAQs
Your required minimum distribution is the
minimum amount you must withdraw from
your account each year. You generally have
to start taking withdrawals from your IRA,
SEP IRA,
SIMPLE IRA, or retirement plan account
when you reach age 70½. Roth IRAs do not
require withdrawals until after the death of
the owner.
•You can withdraw more than
the minimum required amount.
•Your withdrawals will be included in your
taxable income except for any part that was
taxed before (your basis) or that can be
received tax-free (such as qualified
distributions from designated Roth
accounts).
'' Tax Information for
Retirement Plans''
Required Minimum
Distributions FAQs
Your required minimum distribution is the
minimum amount you must withdraw from
your account each year. You generally have
to start taking withdrawals from your IRA,
SEP IRA,
SIMPLE IRA, or retirement plan account
when you reach age 70½. Roth IRAs do not
require withdrawals until after the death of
the owner.
•You can withdraw more than
the minimum required amount.
•Your withdrawals will be included in your
taxable income except for any part that was
taxed before (your basis) or that can be
received tax-free (such as qualified
distributions from designated Roth
accounts).
'' Tax Information for
Retirement Plans''
''Types of Retirement Plans''
Individual Retirement
Arrangements (IRAs)
Roth IRAs
401(k) Plans
403(b) Plans
SIMPLE IRA Plans (Savings Incentive Match
Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified
Employee Pension)
Payroll Deduction IRAs
Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)
Governmental Plans
457 Plans
409A Nonqualified Deferred Compensation
Plans
''Information for Retirement
Plans''
Individual Retirement
Arrangements (IRAs)
Roth IRAs
401(k) Plans
403(b) Plans
SIMPLE IRA Plans (Savings Incentive Match
Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified
Employee Pension)
Payroll Deduction IRAs
Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)
Governmental Plans
457 Plans
409A Nonqualified Deferred Compensation
Plans
''Information for Retirement
Plans''
RMDs are subject to federal income tax
You don’t have to wait until you’re 70 ½ to withdrawal money from your tax-
deferred retirement accounts. As early as age 59 ½, you’re eligible to take money
from them without suffering an early withdrawal penalty of 10 percent.
RMDs are subject to federal income tax as ordinary income. They may also be
subject to income tax by your state government.
You are responsible each year for taking the correct distribution amount from your
account on time. You may take more than the required amount, but the extra
amount can’t be applied toward your distribution requirement the following year.
If you fail to take the minimum amount, the penalty is an excess accumulation tax
of 50 percent of the required amount. For example, if you are required to take
$2,000 and don’t do so, your federal tax penalty would be $1,000.
You don’t have to wait until you’re 70 ½ to withdrawal money from your tax-
deferred retirement accounts. As early as age 59 ½, you’re eligible to take money
from them without suffering an early withdrawal penalty of 10 percent.
RMDs are subject to federal income tax as ordinary income. They may also be
subject to income tax by your state government.
You are responsible each year for taking the correct distribution amount from your
account on time. You may take more than the required amount, but the extra
amount can’t be applied toward your distribution requirement the following year.
If you fail to take the minimum amount, the penalty is an excess accumulation tax
of 50 percent of the required amount. For example, if you are required to take
$2,000 and don’t do so, your federal tax penalty would be $1,000.
Required Distribution...
Everything You Need To Know About Required
Distributions..
If you own a tax-deferred retirement account and have reached the age of 70 ½,
federal law requires you to take annual distributions. Required minimum
distributions (RMDs) most commonly are taken from traditional Individual
Retirement Accounts (IRA), workplace retirement plan accounts—401(k)/403(b)
/457—or self-employed retirement plan accounts.
An RMD is also required for IRA-based plans (e.g., SEPs and SIMPLE IRAs) and all
employer-sponsored profit-sharing plans.
Distributions must be taken from Roth 401(k) accounts as long as the original
owner is alive, but not Roth IRAs.
RMDs must be taken for the year in which you turn 70 ½. Your first RMD can be
delayed until April 1 of the following year, but all subsequent distributions are
required by Dec. 31.
You may start taking distributions later if you work past the age of 70 ½ as long
as you don’t own at least five percent of the company and it offers a qualified
retirement plan.
Everything You Need To Know About Required
Distributions..
If you own a tax-deferred retirement account and have reached the age of 70 ½,
federal law requires you to take annual distributions. Required minimum
distributions (RMDs) most commonly are taken from traditional Individual
Retirement Accounts (IRA), workplace retirement plan accounts—401(k)/403(b)
/457—or self-employed retirement plan accounts.
An RMD is also required for IRA-based plans (e.g., SEPs and SIMPLE IRAs) and all
employer-sponsored profit-sharing plans.
Distributions must be taken from Roth 401(k) accounts as long as the original
owner is alive, but not Roth IRAs.
RMDs must be taken for the year in which you turn 70 ½. Your first RMD can be
delayed until April 1 of the following year, but all subsequent distributions are
required by Dec. 31.
You may start taking distributions later if you work past the age of 70 ½ as long
as you don’t own at least five percent of the company and it offers a qualified
retirement plan.
Take a look at where you are now
When you have a handle on your investments,
obligations, debt, and risk preferences, you
have a starting point for your goals.
Define your goals
Think about what you’d like to accomplish—
short-term and long-term. We can help you plan
for both.
Put your plan into action
Once you have a plan in place, it’s time to make
it happen. Here are few things you can do to get
the ball rolling
When you have a handle on your investments,
obligations, debt, and risk preferences, you
have a starting point for your goals.
Define your goals
Think about what you’d like to accomplish—
short-term and long-term. We can help you plan
for both.
Put your plan into action
Once you have a plan in place, it’s time to make
it happen. Here are few things you can do to get
the ball rolling
Required Minimum Distribution...
You can withdraw the RMD from your traditional
IRA anytime during the year that you turn 70½.
But the rules are different if you're giving your
RMD to charity.
Keep in mind that taking two RMDs in one year will increase your adjusted
gross income and could boost some of your income into a higher tax bracket.
Having the extra income in one year could also affect the portion of your Social
Security benefits that are taxable or trigger the Medicare high-income
surcharge for your Part B and Part D premiums.
One way to avoid boosting your AGI is to give your RMD from your traditional
IRA to charity, but unlike the regular RMD rules, you have to wait until you turn
age 70½ to make a qualified charitable distribution.
You can withdraw the RMD from your traditional
IRA anytime during the year that you turn 70½.
But the rules are different if you're giving your
RMD to charity.
Keep in mind that taking two RMDs in one year will increase your adjusted
gross income and could boost some of your income into a higher tax bracket.
Having the extra income in one year could also affect the portion of your Social
Security benefits that are taxable or trigger the Medicare high-income
surcharge for your Part B and Part D premiums.
One way to avoid boosting your AGI is to give your RMD from your traditional
IRA to charity, but unlike the regular RMD rules, you have to wait until you turn
age 70½ to make a qualified charitable distribution.
When to Take Social Security Sooner Rather
Than Later
The longer you wait to start receiving payments, the bigger your monthly check.
But here are other factors you’ll want to consider...
-----------
When planning for retirement, you must decide when you want to start collecting
Social Security. This decision can have a significant impact on your retirement
income, so it’s important to have a strategy.
-------------
Unfortunately, some financial advisers aren’t terribly knowledgeable about
Social Security because they don’t work exclusively with retirees.
Despite that, there are plenty of people who make it their business to
understand Social Security’s intricacies: eligibility ages, the advantages of
waiting to take benefits, different spousal and survivor options, switching
techniques, taxes and other factors.
The problem is that many of these knowledgeable people may apply their
knowledge like a cookie-cutter, thinking everyone should approach the system
the same way.
They usually aren’t financial planners who know how to take all of those options
and custom-check them for a retiree’s unique situation.
That’s something to keep in mind as you plan for your retirement. Simply put,
there’s no one-size-fits-all model for Social Security.
You need to look at Social Security through the lens of your specific retirement
goals to develop the best strategy for you.
Than Later
The longer you wait to start receiving payments, the bigger your monthly check.
But here are other factors you’ll want to consider...
-----------
When planning for retirement, you must decide when you want to start collecting
Social Security. This decision can have a significant impact on your retirement
income, so it’s important to have a strategy.
-------------
Unfortunately, some financial advisers aren’t terribly knowledgeable about
Social Security because they don’t work exclusively with retirees.
Despite that, there are plenty of people who make it their business to
understand Social Security’s intricacies: eligibility ages, the advantages of
waiting to take benefits, different spousal and survivor options, switching
techniques, taxes and other factors.
The problem is that many of these knowledgeable people may apply their
knowledge like a cookie-cutter, thinking everyone should approach the system
the same way.
They usually aren’t financial planners who know how to take all of those options
and custom-check them for a retiree’s unique situation.
That’s something to keep in mind as you plan for your retirement. Simply put,
there’s no one-size-fits-all model for Social Security.
You need to look at Social Security through the lens of your specific retirement
goals to develop the best strategy for you.
When to Take Social Security Sooner Rather
Than Later
The longer you wait to start receiving payments,
the bigger your monthly check. But here are
other factors you’ll want to consider.
You are eligible to receive Social Security as early as 62, but you can also wait as
late as age 70. Everyone also has a “full retirement age” (FRA), which you reach
at 66 or 67, depending on when you were born.
From 62 to your FRA, Social Security grows by 6.67% for each year you refrain from
collecting. From FRA to 70, Social Security grows by 8% per year. So, you get a
much larger paycheck if you wait until you’re 70 to start collecting than you would
if you started collecting early at age 62.
However, that’s also eight years of missing out on a paycheck, compared with an
extra eight years of collecting Social Security.
Many investors want to know — if they decide to wait to collect Social Security
until they’re 70 — how long it will take to break even. The formula’s complex, but
what it boils down to is that almost everyone breaks even at or near the age of 80.
This means if you wait until you’re 70 to start collecting Social Security, every year
you live past 80 will get you a higher total Social Security payout over your
lifetime.
Often, people only look at benefit amounts and life expectancy when they are
checking into Social Security. But there are other factors to consider. Let’s say
you want to retire at 62 and you want about $5,000 a month of total retirement
income.
If you don’t have pensions or rental incomes, you only have Social Security and
your investments to come up with that income. If you don’t take Social Security,
you will spend down your investments sooner than if you did take Social Security.
This means you will have less money to invest, and the investments will earn less
money over time.
Than Later
The longer you wait to start receiving payments,
the bigger your monthly check. But here are
other factors you’ll want to consider.
You are eligible to receive Social Security as early as 62, but you can also wait as
late as age 70. Everyone also has a “full retirement age” (FRA), which you reach
at 66 or 67, depending on when you were born.
From 62 to your FRA, Social Security grows by 6.67% for each year you refrain from
collecting. From FRA to 70, Social Security grows by 8% per year. So, you get a
much larger paycheck if you wait until you’re 70 to start collecting than you would
if you started collecting early at age 62.
However, that’s also eight years of missing out on a paycheck, compared with an
extra eight years of collecting Social Security.
Many investors want to know — if they decide to wait to collect Social Security
until they’re 70 — how long it will take to break even. The formula’s complex, but
what it boils down to is that almost everyone breaks even at or near the age of 80.
This means if you wait until you’re 70 to start collecting Social Security, every year
you live past 80 will get you a higher total Social Security payout over your
lifetime.
Often, people only look at benefit amounts and life expectancy when they are
checking into Social Security. But there are other factors to consider. Let’s say
you want to retire at 62 and you want about $5,000 a month of total retirement
income.
If you don’t have pensions or rental incomes, you only have Social Security and
your investments to come up with that income. If you don’t take Social Security,
you will spend down your investments sooner than if you did take Social Security.
This means you will have less money to invest, and the investments will earn less
money over time.
Roth IRA withdrawal without
penalty
Unless an exception applies, most distributions
from a Roth IRA before the owner reaches age 59
1/2 will be subject to an "early withdrawal penalty"
of 10% on the amount of the distribution.
----------------
Can I Really Withdraw My Roth
IRA Contributions At Any Time
Without Tax Or Penalty?
Besides emergencies, this information may also be
useful for early retirees under age 59.5 that wish to
access some of their tax-deferred funds without
incurring taxes or penalties.
----------
How Do I Make A Withdrawal?
If you are under 59½, you usually need to make a
specific request to your broker. Here is the info
from my Vanguard account:
You can request a withdrawal from your IRA online,
over the phone, or by mail. You can have a check
sent to you, have the proceeds deposited directly
to your bank account, or transferred to a
nonretirement Vanguard account.
penalty
Unless an exception applies, most distributions
from a Roth IRA before the owner reaches age 59
1/2 will be subject to an "early withdrawal penalty"
of 10% on the amount of the distribution.
----------------
Can I Really Withdraw My Roth
IRA Contributions At Any Time
Without Tax Or Penalty?
Besides emergencies, this information may also be
useful for early retirees under age 59.5 that wish to
access some of their tax-deferred funds without
incurring taxes or penalties.
----------
How Do I Make A Withdrawal?
If you are under 59½, you usually need to make a
specific request to your broker. Here is the info
from my Vanguard account:
You can request a withdrawal from your IRA online,
over the phone, or by mail. You can have a check
sent to you, have the proceeds deposited directly
to your bank account, or transferred to a
nonretirement Vanguard account.
Roth IRA Withdrawal Rules
In 95% of the cases, all you need
to know about Roth IRA
withdrawals is covered by the
following points:
•Principal contributions can be withdrawn anytime
penalty-free
•Earnings generally can NOT be withdrawn before age
59 ½ penalty-free
•Earnings generally can be withdrawn after age 59 ½
penalty-free
•Earnings on your contributions must be invested for
at least 5 years
•There are special exceptions to the rules
Commit these Roth IRA rules for withdrawal to
memory, and you'll know just about everything you
ever need to know about withdrawing funds from
your Roth IRA.
Withdrawals from your Roth IRA
must follow certain rules established
by the IRS.
When withdrawing Roth IRA
contributions, you must always obey the ordering
rules. According to the ordering rules, withdrawals
must occur in the following order (in order of first
funds out):
Principal contributions are never subject to income
taxes or early withdrawal penalties, because you
made those contributions with after-tax dollars.
However, if you're under age 59 ½ or
haven't met the requirements of the 5
year rule yet, then your other Roth IRA
withdrawals may be subject to income taxes and/or a
10% early withdrawal penalty
In 95% of the cases, all you need
to know about Roth IRA
withdrawals is covered by the
following points:
•Principal contributions can be withdrawn anytime
penalty-free
•Earnings generally can NOT be withdrawn before age
59 ½ penalty-free
•Earnings generally can be withdrawn after age 59 ½
penalty-free
•Earnings on your contributions must be invested for
at least 5 years
•There are special exceptions to the rules
Commit these Roth IRA rules for withdrawal to
memory, and you'll know just about everything you
ever need to know about withdrawing funds from
your Roth IRA.
Withdrawals from your Roth IRA
must follow certain rules established
by the IRS.
When withdrawing Roth IRA
contributions, you must always obey the ordering
rules. According to the ordering rules, withdrawals
must occur in the following order (in order of first
funds out):
Principal contributions are never subject to income
taxes or early withdrawal penalties, because you
made those contributions with after-tax dollars.
However, if you're under age 59 ½ or
haven't met the requirements of the 5
year rule yet, then your other Roth IRA
withdrawals may be subject to income taxes and/or a
10% early withdrawal penalty
''IRA Individual Retirement
Account Roth Is The Best.
Why?'' Anthony Jeanty!
Account Roth Is The Best.
Why?'' Anthony Jeanty!
Retirement Planning Guide -
Financial Knowledge
Financial Knowledge
Retirement Planning Guide = Retirement can be a time to explore new possibilities or to slow down and fully enjoy the life
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