Follow 5 new rules instead Many retirees rely on a common rule of thumb for retirement withdrawals known as the 4% rule. According to this rule, if you withdraw 4% of your portfolio each year and increase your withdrawals with the rate of inflation, you should have enough income to last your lifetime. So what’s the problem? While the rule... View Article
When working and saving, typically you invest your retirement portfolio in a way that gives it the potential to earn the highest returns possible while planning to ride out any big market downturns. Once retired, the goal changes. A different goal means a different portfolio. A retirement portfolio needs to produce reliable cash flows that last the rest of your life... View Article
An Individual Retirement Account, most often called an IRA, is a type of retirement savings account that offers special tax treatment when you contribute funds to save for your retirement. Can anyone contribute to an IRA? Not exactly. A set of IRS rules determine if you can make an IRA contribution, the type of IRA you can contribute to, and... View Article
Smart investors follow a plan, specifically an asset allocation plan. An asset allocation plan tells you how much of your total investments should be in stocks versus bonds. From there, you drill down into additional details such as how much should be in large-company U.S. stocks (or index funds) vs. international vs. small cap. You maintain investment ratios by rebalancing... View Article
I recently spoke with a good friend from college who had the misfortune to lose his job. Did you have a 401(k)?” I asked him. “I think so,” he responded. “I see money coming out of my check going somewhere.” I continued to inquire. “Do you know how it’s invested? What about a company matching contribution?” My friend paused a... View Article
Many upcoming retirees aren’t quite sure how to estimate taxes in retirement. It’s similar to the way you calculate taxes while working. What is different is the way you withhold and pay those taxes. You need to have an estimate of the amount of taxes you are required to pay so you know what amount to have withheld from pensions,... View Article
What would you guess your Social Security benefits are worth; a few hundred thousand dollars, maybe? Would it surprise you to know that over 25 years the average single person could receive $500,000 or more in total Social Security benefits? Many married couples will get over a million dollars. According to the Social Security office, in 2020, the average monthly... View Article
Inheritance taxes are complicated. Many people don’t realize that inherited assets—property, stocks, investment accounts, etc.—may be subject to taxes and that there are specific tax rules for each type of asset or account. So before you start selling off assets, make sure you know the rules. We are not talking here about estate taxes. Estate taxes apply to the total value of... View Article
Imagine your spouse is ill, and you meet with an estate planning attorney to get your family affairs in order. Your attorney drafts a trust document and a will. You and your spouse sign it. You think everything is fine. Your spouse passes, and shortly after that, you find that the accounts are not set up to transfer the way... View Article
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