Core Insights - Building a solid nest egg is crucial for financial stability in retirement, as Social Security provides an average of $2,000 per month, which may not be sufficient for many retirees [1] Retirement Account Options - Roth IRAs are popular due to tax-free investment gains and withdrawals, and they do not require minimum distributions, unlike traditional IRAs and 401(k)s [2] - However, a Roth IRA may not be suitable for everyone, particularly in certain financial situations [2] Scenarios to Consider Skipping Roth IRA - If income is rising in 2026, individuals may enter a higher tax bracket, making traditional retirement accounts more beneficial due to the tax break on contributions [3] - Those expecting significant gains in a taxable brokerage account may also benefit from the tax break on contributions offered by traditional accounts [4] - Nearing retirement age with most savings in a Roth account may necessitate contributions to a traditional IRA or 401(k) to ensure some taxable income in retirement [5] - Having taxable income can provide opportunities to claim tax credits and deductions, which may be lost without it [6] - Concerns about premature withdrawals from a Roth IRA may lead individuals to consider traditional accounts instead [7] - Charitable donations may also be impacted by the lack of taxable income, limiting potential deductions [8]

In case of an audit, Rothstein suggests opening a separate bank account to receive transfers from the IRA and then using it to pay the premiums only. “Or, the best way is to have the money sent to the insurance carrier directly,” he says.Penalty-free withdrawals can be taken from an IRA if you’re unemployed and the money is used to pay health insurance premiums. The caveat is that you must be unemployed for 12 weeks.The easiest way to prove disability to the IRS is by collecting disability payments from an ...

Key Points You may be hesitant to spend the savings you've worked hard to build. Having a strong budget and withdrawal strategy could help alleviate your worries. Also remind yourself why you saved that money in the first place. The $23,760 Social Security bonus most retirees completely overlook › There are many people who struggle to build up a decent amount of retirement savings. And people in that boat often have to live more frugally in retirement than they want to. But sometimes, an interes ...

Key Takeaways The end of the year is near and you might be busy stocking up on gifts and planning visits to family and friends. But retirees should keep another year-end deadline in mind: taking required minimum distributions, or RMDs. New research from Vanguard estimates that missed RMDs could cost retirees up to $1.7 billion annually. Starting at age 73, investors must take RMDs, which are required annual withdrawals from accounts like 401(k)s and traditional IRAs. (Though if you're still working and have ...

Delmaine Donson/ Getty Images Key Takeaways Most Americans retire earlier than expected, with health issues and job loss being the main drivers of unplanned early exits. Experts recommend that people in their 40s and 50s plan by looking at best and worst case retirement scenarios and consider whether they can continue to work in their current jobs. Catch-up contributions to 401(k)s and IRAs can help boost savings, but planning on working longer is a risky retirement strategy given that many people re ...

Like many people, one of your top priorities in the new year is growing your wealth. You’re going to read all the money management books and listen to the podcasts. You’ll download apps to help you get smarter about saving money. And this is the year you’re finally going to get more serious about investing. Whether your only experience as an investor begins and ends with your workplace 401(k) or you already keep a close eye on your portfolio, there are smart investing moves you can make now to position y ...

Core Viewpoint - The discussion centers around the risks and consequences of cashing out a 401(k) to invest in real estate, emphasizing that this strategy is generally poor financial planning due to penalties, taxes, and loss of compound growth potential [2][5][6]. Group 1: Financial Risks - Cashing out a 401(k) incurs heavy penalties, including a 10% penalty and a tax rate of approximately 25%, which significantly reduces any potential profit from real estate investments [5][6]. - The example of Ryan's ex-wife illustrates that despite making a profit from a property sale, the costs associated with withdrawing from her 401(k) negated any financial gain [5][6]. Group 2: Retirement Savings Context - Ryan's retirement savings are notably low, with only $85,000 in his 401(k) despite an annual income of $130,000, which is significantly below the average savings target for his age group [4]. - The average 401(k) balance for individuals aged 50 is reported to be $313,220, indicating that Ryan is well behind this benchmark [4].

MoMo Productions / Getty Images Recent research shows that many people in their 30s are saving what they can, even amid economic ups and downs. Key Takeaways The average 30-something contributes about 11% to 13% of their income to retirement accounts in 2025, compared with the financial experts' suggested target of 15%. Median 401(k) balances for people in their 30s are about $25,000–$40,000, while the average, which skews higher, is over $100,000. If you’re in your 30s, chances are you’ve asked you ...

分组1 - The article emphasizes the importance of careful financial management for retirees, particularly in maximizing income from savings before the end of 2025 [1] - Retirees with traditional retirement plans must adhere to Required Minimum Distributions (RMD) rules, starting at age 73 for those born before 1960, with penalties for non-compliance [2][3] - Strategies such as making qualified charitable distributions can help minimize tax liabilities associated with RMDs, highlighting the need for timely implementation of such strategies [4] 分组2 - It is crucial for retirees to review and rebalance their investment portfolios to ensure they generate sufficient income while managing risk exposure [4] - Retirees should assess their portfolio for overexposure to individual stocks, as significant gains may lead to concentrated risk, suggesting a need to sell shares to maintain a balanced asset allocation [5][7] - Understanding costs and income projections for the upcoming year is essential for effective financial planning in retirement [6]

Retirement Account Contribution Limits - The contribution limit for individual retirement accounts (IRAs) will increase to $7,500 in 2026, with a catch-up contribution limit of $1,100 for individuals aged 50 and older [2] - For Roth IRAs, the income limit for contributions will rise to between $153,000 and $168,000 for singles and heads of household, and between $242,000 and $252,000 for married couples filing jointly [3] - The contribution limit for 401(k), 403(b), 457 plans, and the federal Thrift Savings Plan will increase to $24,500, with an $8,000 catch-up for those aged 50 and older [4] Health Savings Accounts (HSAs) - The annual contribution limit for HSAs will increase to $4,400 for individuals and $8,750 for family coverage in 2026, with an additional $1,000 catch-up contribution for those aged 55 or older [6] Social Security Benefits - The Social Security Administration will implement a 2.8% cost-of-living adjustment (COLA) for 2026, resulting in an average increase of $56 per month for approximately 75 million retired seniors and disabled workers [8]