If you need retirement funds for living expenses now, paying taxes on a Roth conversion may cost more than it saves. But, if you plan to keep the money for growth or pass it on to heirs, a conversion can help you avoid future required minimum distributions (RMDs) and provide tax-free income for beneficiaries. To show how this could work, let’s consider the example of a 67-year-old with $680,000 in a 401(k) who will begin RMDs at age 73. If you are considering a Roth conversion, a financial advisor can help ...

The main disadvantage to a Roth IRA is its contribution tax status. You pay full income taxes on money you put into this account, whether through contributions or conversions. For example, say that you convert $1.2 million from your traditional IRA to a Roth IRA. You would include that $1.2 million in your taxable income for that year, and would need available cash to pay the resulting taxes. Converting this amount will likely put you into the highest tax bracket of 35%.This tax status makes a Roth IRA good ...

To encourage people to save for retirement, the IRS allows people age 50 and over to put an extra $7,500 into their 401(k) plans before hitting pre-tax limits (and an extra $11,250 for people between 60-63). But upcoming changes to the tax code will make that perk vanish for people who make more than $145,000 per year. Starting next month, high-earners over 50 who are hoping to put more money into their retirement savings will have to do so after paying taxes via a Roth 401(k). That's going to mean they'r ...

You can always get an estimate of your future benefits based on your current credits by asking the SSA directly. However, at age 55 with $80,000 per year in earnings, if you retire at age 67 and maintain that income you are likely to collect about $3,533 per month/$42,406 per year in benefits. This is the basis of your retirement budget. You will receive this amount, adjusted each year for inflation, for the rest of your life. If you delay collecting benefits, you can increase this amount up to a maximum of ...

Legislators in Washington are trying hard to pressure the Securities and Exchange Commission (SEC) to open up the $12.5 trillion 401(k) retirement market to crypto and other alternative assets. In accordance with US President Donald Trump’s recent executive order, House Financial Services Committee Chairman French Hill and Ranking Member Maxine Waters pressed SEC Chair Paul Atkins to expedite the rules revision in line with the directive. In a letter penned to Atkins on 22 September 2025, Hill and Waters ...

Retiring in Hawaii conjures images of golden sunsets, quiet beaches and a life that finally slows down. Tax paperwork is the last thing anyone wants to picture. Still, in one of the country’s most expensive states, ignoring taxes isn’t an option. Trending Now: Here’s Why You Might Want To Invest Your Retirement Savings in a Roth 401(k) Try This: Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why I wanted to know what the real bill might look like for retirees ...

You might be counting down the days until retirement even if it’s years away. Maybe you’ve got your dream travel destinations mapped out, a list of hobbies to explore, and plans to spend more time with family. It all sounds amazing — until you remember that you need to establish a rock-solid retirement plan to make those dreams a reality. Up Next: I Asked ChatGPT Where To Retire on $2,000 a Month: Here’s What It Said For You: 8 Common Mistakes Retirees Make With Their Social Security Checks According to f ...

Core Viewpoint - People often struggle with money due to a negative mindset, which can become a self-fulfilling prophecy, according to financial educator Abi Foster [1][7] Group 1: Changing Mindset - The language used when discussing money significantly impacts spending habits, with young people often adopting negative financial vocabularies from their families, leading to a fear of money [2] - Individuals can start by familiarizing themselves with trading apps to understand how investing works before making any financial commitments [3] Group 2: Savings and Investments - Keeping all savings in a checking account is detrimental, as it effectively transfers money to banks; a savings account should only hold enough to cover three months of living expenses, with a maximum of twelve [4] - Investing in stocks related to personal interests, such as Formula One stocks like Ferrari, is recommended, along with considering long-term investments in index funds like the S&P 500 [5] Group 3: Retirement Planning - It is crucial to actively plan for retirement by increasing contributions to retirement accounts such as 401(k), IRA, or pension plans, as minimal contributions can result in significant losses in compound interest by retirement age [6]

It’s not uncommon for people today to get nostalgic for the past, especially when it comes to comparing it to their current financial situation. For example, back in the day, it was a lot less expensive to buy a home, get a college degree or simply go to the grocery store. Trending Now: I Paid Off $40,000 in 7 Months Doing These 5 Things For You: Warren Buffett: 10 Things Poor People Waste Money On What other financial problems simply didn’t exist in the past that are giant financial burdens in the presen ...

Core Insights - The article highlights the significant retirement savings shortfall faced by many Americans, with 47% of working-age households at risk of not having enough saved for retirement [4][7] - The traditional three-legged stool of retirement funding—Social Security, employer pensions, and personal savings—has shifted, leaving many reliant solely on Social Security and personal savings due to the decline of pensions [2] Group 1: Retirement Savings Shortfall - A substantial portion of the population is aware of the retirement crisis, with 79% of Americans acknowledging the issue in 2024 [4] - The risk of falling short on retirement savings spans all income levels: 56% of lower-income, 45% of middle-income, and 41% of high-income workers are at risk [5] Group 2: Strategies to Avoid Shortfall - Setting a clear retirement savings goal is essential, with a recommendation to save around 10 times the final salary, adjusted for factors like inflation and healthcare costs [6][8] - Choosing the right retirement account is crucial, with suggestions to maximize employer 401(k) matches and consider traditional or Roth IRAs based on current and future tax rates [8] - Automating contributions to retirement accounts can enhance saving consistency and help meet targets [8] - Smart investment choices, such as ETFs and target date funds, are recommended to balance risk and potential returns while being mindful of investment fees [8] - Increasing investment contributions in line with income raises can help individuals stay on track with their retirement savings goals [8]