What role can life insurance play in your retirement plan? Most of us think of life insurance as protection against financial loss should we die prematurely. But when we reach retirement and the kids are all self-sufficient, do we still need life insurance? The answer is maybe. Here are some situations where life insurance may make sense for retirees or those close to retirement. Provide a source of retirement income While life insurance is designed to protect against unexpected … [Read more...]
Have You Checked Your Social Security Statement Lately?
The Social Security Administration (SSA) provides personalized Social Security Statements to help Americans age 18 and older better understand the benefits that Social Security offers. Your Statement contains a detailed record of your earnings and estimates of retirement, disability, and survivor benefits — information that can help you plan for your financial future. You can view your Social Security Statement online at any time by creating a my Social Security account at the SSA's … [Read more...]
The Versatile Roth IRA
Used with care, the Roth IRA may help serve several objectives at once — like a multipurpose tool in your financial-planning toolbox. Retirement First and foremost, a Roth IRA is designed to provide tax-free income in retirement. If your modified adjusted gross income (MAGI) falls within certain limits, you can contribute up to $7,000 ($8,000 for those age 50 or older) in earned income to a Roth IRA in 2024 and 2025. Although Roth IRA contributions are not tax-deductible, … [Read more...]
Key Retirement and Tax Numbers for 2025
Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2025. Estate, gift, and generation-skipping transfer tax The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2025 is $19,000, up from $18,000 in 2024. The gift and estate tax basic exclusion amount … [Read more...]
Accounts for Two: A Team Approach to Retirement Savings
Almost half of U.S. families headed by a married couple include two working spouses.1 With dual careers, many spouses accumulate assets in separate retirement accounts. Each might have funds in an employer-sponsored plan and an IRA. Even if most of a married couple's retirement assets reside in different accounts, open communication and teamwork can help them craft a unified retirement strategy. Working together Tax-deferred retirement accounts such as 401(k)s, 403(b)s, and IRAs … [Read more...]
What’s New for 2025?
To help you stay informed, here are five changes you can look forward to in the new year. Higher catch-up contributions for some. As of January 1, individuals ages 60 through 63 may be able to make increased catch-up contributions (if offered) to their workplace plan. The catch-up amount for people age 50 and older is $7,500 for 2025, but for people ages 60 through 63, the limit will be $11,250.1 Cap on out-of-pocket Medicare drug costs. A bit of welcome news for people with Medicare Part … [Read more...]
Would You Be Prepared for an Unplanned Early Retirement?
Most of us would prefer not to think about an unexpected (and unwelcome) early retirement, but it does happen frequently. In fact, nearly half of current retirees retired earlier than planned, and of that group, more than 60% did so due to changes at their company or a hardship, such as disability.1 For that reason, it's a good idea to take certain steps now to help prepare for the unexpected. What you can do now Save as much as possible in tax-advantaged accounts. If you're forced … [Read more...]
What is a SIMPLE?
There are many types of employer-sponsored retirement plans. One that may appeal to small businesses and to self-employed individuals is the savings incentive match plan for employees (SIMPLE) because, as the name implies, it is easy to set up and administer, and employers are allowed to take a tax deduction for the contributions that are made. SIMPLEs can be established by small businesses that have 100 or fewer employees (who were paid at least $5,000 or more in compensation during the … [Read more...]
Sources of Retirement Income: Worker Expectations vs. Retiree Realities
About 90% of retirees say they rely on Social Security, approximately the same as the percentage of workers who expect Social Security to help them meet their retirement income needs. Similarly, about 60% of workers expect a traditional pension plan to provide income, which is only slightly higher than the percentage of retirees who say a pension helps pay their bills. In other cases, worker expectations differ dramatically from retiree realities. Source: Employee Benefit Research Institute, … [Read more...]
It’s Complicated: Inheriting IRAs and Retirement Plans
The SECURE Act of 2019 dramatically changed the rules governing how IRA and retirement plan assets are distributed to beneficiaries. The new rules, which took effect for account owner deaths occurring in 2020 or later, are an alphabet soup of complicated requirements that could result in big tax bills for many beneficiaries. RMDs and RBDs IRA owners and, in most cases, retirement plan participants must start taking annual required minimum distributions (RMDs) from their non-Roth … [Read more...]
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