In 1996, the federal government bestowed one of the biggest gifts to retirement savers. It is called the Roth IRA. Put money in on an after-tax basis, and the reward—when done correctly—not paying taxes on any of the earnings. Since then, we’ve seen the Roth expanded to 401k’s and other employer retirement plans. Today we illustrate the incredible power of Roth Accounts.
Today it is Part 3 of our series taxes in retirement. In this episode we look at the planning opportunity our couple, Bill and Janet have to impact both themselves and their daughter. We dig into the potential impact of Roth IRA conversions.
The taxation of your retirement accounts is always a big concern. In part 2, we look at the tax implications of those 401k and IRA Accounts when you die.
How is your income taxed in retirement? Today we look at a basic case study to show you how their income will be taxed. We look at what they face now, and when they get to the required minimum distribution age.
Investing is a key component of your financial plan. To be successful, one of the most important traits you need is intestinal fortitude. Reaching for return introduces some emotional stress, and sometimes that stress can be Intense. Big decreases in value cause many people to sell investments – and most do it when they shouldn’t. Today, we talk about the difference between investment return and investor return.
Not all of us retire when we plan. Sometimes the decision is made for us. Today we look at the situation of Hank and Becky. Hank was laid off right before his 60th birthday. Can they make it work, or will they be forced to find a job somewhere else?
Planning for the future is something we firmly believe. It not only applies to our clients but also to our firm. Today, there are eight financial advisors at Commonwealth. The experience on our team ranges from 10 months to over 40 years. It is also critical for us to also plan for the future, and that means finding bright young minds. In the last few months, we added two financial planning residents. Today we introduce you to Madison Gontarek and Khoury Kloss.
We spend our working years saving for retirement. There comes a point where we will need to turn those savings into an income stream. How much can you take from your savings and not run out of money? Is the 4% rule still valid? Is there a “magic number” we can all use to figure out if we have saved enough?
You can look at retirement in three phases: the go-go years, the slow-go years, and the no-go years. Nobody knows exactly how long each of those will last, but when we start to think in those terms, it can change how you approach planning for that next chapter of your life.