SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. I’m 77 years old and I requested my 401(k) fund administrator to prepare my RMD. I was told I do not have to withdraw my money if I am still employed. Please confirm if this in fact an IRS rule or that of the fund management company? -Bea That is correct, Bea. If you are still employed, you do not have to take a required minimum distribution (RMD) from your current 401(k) regardless of your age, as long ...

Core Points - An Individual Retirement Account (IRA) is a tax-advantaged investment account for retirement savings, independent of employer ties, making it suitable for self-employed individuals and those looking to supplement workplace retirement accounts [1][2] Types of IRAs - The main types of IRAs are traditional IRAs and Roth IRAs, each with distinct tax implications and contribution rules [3][4][5] - Other types include Rollover IRAs, SEP IRAs, SIMPLE IRAs, Custodial IRAs, Spousal IRAs, and Inherited IRAs, each serving specific needs and circumstances [6][7] IRA Rules - Contributions to IRAs require taxable compensation, defined as income from work, and eligibility varies based on income levels and participation in workplace retirement plans [9][10] - Roth IRAs have specific income limits for contributions, with thresholds set for 2025 and 2026, affecting eligibility based on modified adjusted gross income (MAGI) [11][12] - Annual contribution limits are set by the IRS, with amounts adjusted for inflation; for 2025, the limit is $7,000, increasing to $7,500 in 2026 [13][14] Withdrawal Rules - Traditional IRAs incur taxes on withdrawals, with a 10% penalty for early distributions before age 59 ½, though exceptions exist [15][16] - Roth IRAs allow tax-free withdrawals of contributions at any time, with earnings accessible tax-free after age 59 ½ and a five-year holding period [16][17] - Required Minimum Distributions (RMDs) for traditional IRAs begin at age 73, increasing to 75 in 2033, while Roth IRAs do not require RMDs during the account holder's lifetime [17] IRA vs 401(k) - IRAs and 401(k)s are both tax-advantaged retirement accounts, but IRAs are opened independently, while 401(k)s are employer-sponsored; individuals can contribute to both [18] Choosing an IRA - Factors to consider when choosing an IRA provider include fees, investment options, advisor access, and user experience [24][25] - Steps to open an IRA include deciding on the type, selecting a provider, opening the account, funding it, and choosing investments [26] Rollover IRAs - Rolling over a 401(k) or 403(b) into an IRA can provide lower fees and more investment options, simplifying account management [27] - Specific rules must be followed to avoid penalties during rollovers, including matching the tax structure of the original account and completing the rollover within 60 days [28][29]

Core Insights - A study by PensionBee and The Open University reveals a 'legacy gap' in retirement saving motivations between gay and straight men, despite similar savings amounts [1][2] - The research indicates that sexual orientation influences the reasons for saving, particularly among straight men who are more likely to save for future dependents [3][4] Summary by Sections Research Findings - The study analyzed data from over 28,000 UK retirement accounts and surveys of more than 1,300 PensionBee savers, concluding that sexual orientation does not affect total retirement savings but does influence saving motivations [2] - Straight men without children are more inclined to save for future dependents compared to gay men, although this gap narrows once men become parents or caregivers [3] Behavioral Insights - Social expectations regarding family formation impact men's financial planning and motivations, suggesting that future family considerations shape present saving behaviors [4] - The research adds a behavioral perspective to existing studies on wealth and sexuality, emphasizing the importance of understanding how personal relationships influence financial well-being [4] Financial Inclusion - The findings suggest that financial systems may unintentionally rely on heteronormative assumptions, potentially alienating non-traditional family structures [5] - Financial messaging that focuses on intergenerational wealth transfer may resonate more with straight savers, indicating a need for more inclusive communication strategies [6] Recommendations for Financial Services - The study calls for the financial services industry to modernize retirement education by recognizing diverse family structures and life goals, training professionals to understand varying savings motivations, and ensuring retirement communications engage all savers equally [9] - The research highlights the necessity of inclusive financial education and communication to better serve a diverse clientele [6][9] Company Overview - PensionBee is a leading retirement savings provider managing over $9 billion in assets and serving approximately 300,000 customers globally, focusing on simplicity, transparency, and accessibility [8]

Core Insights - Retirement planning without a 401(k) is feasible, but strategies may differ from those who have access to such plans [1] Group 1: Alternative Retirement Accounts - Individuals without a 401(k) can still invest in retirement accounts like traditional or Roth IRAs, with annual contributions up to $7,000 ($8,000 for those over 50) [3] - Freelancers or small business owners can utilize SEP IRAs or Solo 401(k) plans for higher contribution limits compared to standard IRAs [3][4] Group 2: Income-Generating Assets - Building income-producing assets is recommended for those not relying on retirement accounts, including real estate, dividend-paying stocks, index funds, and online businesses [4][5] - Real estate is highlighted as a particularly lucrative option for generating cash flow and capital gains, providing control and liquidity [5] Group 3: Healthcare Planning - Planning for healthcare is essential as retirement typically lacks employer-provided health benefits; options include ACA health plans and Health Savings Accounts (HSAs) [6] - HSAs offer tax advantages, allowing pre-tax contributions to grow tax-free and enabling tax-free withdrawals for medical expenses [7] Group 4: Financial Independence Approach - The FIRE (Financial Independence, Retire Early) movement is suggested, advocating for saving 50% to 70% of income and investing in low-cost index funds [7]

Core Insights - Many Americans are not fully utilizing the tax advantages and flexibility offered by IRAs, which can significantly impact their retirement savings [1][2] Group 1: IRA Contribution Strategies - Individuals can make tax-deductible contributions up to $7,000 for 2025 ($7,500 in 2026) for those under age 50, and up to $8,000 ($8,600 in 2026) for those aged 50 and above, emphasizing the importance of early and consistent contributions [3] - Roth IRAs allow young adults, often in lower tax brackets, to build tax-free wealth, with contributions possible from parents or grandparents up to 100% of earned income or $7,000 for 2025 ($7,500 in 2026) [4][5] Group 2: Portfolio Management - A globally diversified IRA portfolio can help mitigate market volatility and achieve steady returns, allowing for tax-free reallocation of investments to maintain balance and align with financial goals [6] Group 3: Specialized IRA Options for Business Owners - Business owners can benefit from SEP and SIMPLE IRAs, which offer additional savings opportunities, and should consult financial professionals to understand the specific rules and advantages of these accounts [7]

Core Insights - The article emphasizes that achieving early retirement requires a disciplined approach to spending and investing, rather than chasing trends or relying on luck [2][17]. Spending and Lifestyle - Early retirement is directly linked to annual spending; for example, a lifestyle costing $80,000 annually requires a FIRE number of $2 million, compared to $1.25 million for a $50,000 lifestyle [2][15]. - Lifestyle inflation, or "keeping up with the Joneses," can significantly delay retirement plans [2][17]. Investment Strategies - Building wealth involves adopting good financial habits and avoiding unnecessary expenditures, which Russell identifies as the primary obstacle to early retirement [3][5]. - A balanced investment strategy is recommended, focusing on consistent contributions rather than seeking high-risk, high-reward opportunities [6][9]. Planning and Proactivity - Proactive planning is essential; individuals should not leave their retirement to chance but should actively monitor their savings and investment strategies [7][8]. - Understanding key financial metrics, such as the FIRE number and savings rate, is crucial for effective retirement planning [8][14]. Practical Steps for Retirement - Russell advises capturing employer matches in retirement accounts, automating contribution increases, and maximizing tax-advantaged accounts to enhance retirement savings [10][11][12]. - For those planning to retire early, having a taxable brokerage account is important for accessing funds before the age of 59½ [13]. Compounding and Financial Independence - Compounding is highlighted as a vital component of wealth building; for instance, investing $1,500 monthly at an 8% return could yield approximately $825,000 by age 45 [16]. - The FIRE number is calculated by multiplying annual expenses by 25, making budgeting and understanding spending critical for retirement planning [15][14].

Core Insights - The article discusses the importance of understanding Required Minimum Distributions (RMDs) for retirees, particularly those with pre-tax retirement accounts [3][4]. Group 1: RMD Overview - RMDs are mandatory withdrawals from pre-tax retirement accounts that must begin at age 73, ensuring that taxes are eventually paid on these funds [3][4]. - The IRS imposes strict rules regarding the timing and amount of RMDs, with significant penalties for non-compliance, including a 25% penalty on amounts not withdrawn in time [4]. Group 2: RMD Calculation - RMD calculations are based on the year-end balance of retirement accounts and the retiree's life expectancy, using the IRS Life Expectancy Table to determine the RMD factor [7]. - An example illustrates the calculation: a retiree with a $150,000 IRA balance at year-end would have an RMD of $5,882.35 for the following year, based on a factor of 25.5 [8]. Group 3: Withdrawal Flexibility - Retirees are not required to take their RMD in a single payment; they can opt for multiple withdrawals throughout the year and can withdraw more than the minimum if needed [9].

Retirement Planning - DAiM io 提供针对自雇人士和小企业主的 SEP IRA（Simplified Employee Pension Individual Retirement Account，简易员工退休金计划个人退休账户）投资账户[1] - SEP IRA 允许比传统 IRA 储蓄更多[1] - 个人可以贡献高达薪酬的 25%，最高可达 69,000 美元（2025 年）[1] - DAiM io 在 SEP IRA 中提供加密货币投资[1]