If you’re nearing retirement, the decisions you make today could significantly impact how much Social Security income you receive for the rest of your life. With the right strategies, you can boost your benefits and reduce your tax burden. If you want to maximize your Social Security benefits, these are the moves you need to make now. Check Out: How Much the Average Upper-Class Retiree Claims in Social Security Benefits at Age 65 Read Next: 6 Safe Accounts Proven To Grow Your Money Up To 13x Faster Delay ...

The One Big Beautiful Bill Act (OBBBA) created a new tax-deferred account for minors called “Trump Accounts.” According to a report released by the White House’s Council of Economic Advisors, children born between 2025 to 2028 qualify for a free $1,000 seed contribution from the federal government to sweeten the deal. They must be a U.S. citizen or legal resident with a Social Security number (SSN) and have at least one parent with an SSN. Trending Now: 8 Ways Trump’s ‘One Big Beautiful Bill’ Could Offer ...

Morsa Images / Getty Images Key Takeaways Having extra savings in retirement is a good goal to have. Start by saving and investing early, investing aggressively, and maximizing tax-advantaged retirement accounts. Automating your investments is a good strategy to use. If you are uncertain how to invest for your retirement, reach out to a fiduciary financial planner for advice. It’s a good problem to have: having too much money saved for retirement and having additional money to leave to your heirs. ...

If you’re planning on making tax-deferred retirement accounts the last pot of money you tap after retirement, you’ve got a lot of company. And why not? The idea that your 401(k) or traditional IRA can keep growing and churning out more tax-deferred money seems like a sound strategy. But you may want to rethink this conventional wisdom. Instead of focusing on deferring taxes, Morningstar’s Mark Miller suggests looking at how to minimize your overall total taxes during retirement – which can mean tapping ta ...

Core Insights - Roth IRAs provide significant advantages such as tax-free withdrawals and no required minimum distributions (RMDs), allowing for long-term investment growth [2][3][24] - The main disadvantage of Roth IRAs is the upfront tax payment on contributions, which can reduce the capital available for long-term growth [4][5][24] - The decision to switch to Roth contributions depends on individual financial circumstances, particularly tax brackets and retirement expectations [17][21][24] Advantages of Roth IRAs - Roth IRAs allow for tax-free withdrawals in retirement, which can be beneficial for retirees [6][24] - They help maintain lower taxable income, potentially keeping Social Security benefits taxes low [2][24] - Contributions to Roth IRAs can grow tax-free over time, maximizing growth potential [2][24] Disadvantages of Roth IRAs - Upfront taxes on contributions can limit the amount available for investment [4][5] - Households in higher tax brackets may find traditional pre-tax accounts like 401(k)s more beneficial [18][21] Contribution and Conversion Strategies - There are two main ways to fund a Roth IRA: contributions and conversions from pre-tax accounts [8][9] - Contributions are subject to annual limits, while conversions have no limits but can significantly impact taxable income for the year [10][12] - Both contributions and conversions are subject to a five-year rule for tax-free withdrawals [12][13] Financial Planning Considerations - Households should evaluate their current and expected future tax rates when deciding between Roth contributions and traditional accounts [17][21] - Consulting with a financial advisor is recommended to tailor strategies to individual financial situations [14][23]

Group 1 - The article emphasizes the importance of starting investing with limited funds and provides a structured approach to do so using AI tools like Grok [1][2] - Setting clear financial goals and budgets is crucial, with a recommendation to have an emergency fund covering three to six months of living expenses before investing [3][4] - The article suggests focusing on fractional shares through low-cost platforms such as Acorns, Stash, or Robinhood, and highlights the benefits of index funds and ETFs that track the S&P 500 [5] Group 2 - Grok advises on the use of retirement accounts, recommending either a Roth IRA for tax-free growth or a traditional IRA for current tax minimization, and suggests utilizing employer-sponsored plans for matching contributions [6] - The recommendation of dividend reinvestment plans (DRIPs) is made as a safer investment strategy compared to high-risk options, allowing gradual cash flow growth [7] - The article concludes with the importance of continuous education in investing and the establishment of automatic transfers to foster positive investing habits [8]

Core Insights - The article discusses the importance of long-term care insurance for retirees, highlighting the potential high costs of long-term care without coverage [2][4] - It emphasizes the need for retirees to consider financial planning strategies, including Required Minimum Distributions (RMDs) from retirement accounts [7][10] Long-Term Care Insurance - Long-term care insurance can mitigate the costs associated with aging, with an average annual premium of $1,900 for single females [1][2] - The monthly costs for long-term care can range from $4,000 to $15,000 or more, making insurance a critical consideration for financial security [2][4] - Various options for long-term care insurance are available, including hybrid life or annuity insurance with long-term care benefits [6] Financial Planning and RMDs - Retirees like Alice should be aware of RMDs, which require withdrawals from traditional IRAs starting at age 73 [8][10] - A financial advisor can help create a strategy to minimize RMDs, potentially through converting traditional IRA funds to a Roth IRA [10][11] - Understanding the tax implications of RMDs is crucial, as skipping them can result in a 25% tax penalty [8][9] Retirement Income - Alice has a monthly pension of $5,000 and Social Security payments of $2,000, totaling approximately $6,000 per month, which covers her living expenses [4][5] - The article suggests that retirees should consider their overall financial situation, including potential long-term care needs and RMD strategies, to ensure financial stability [3][7]

Core Insights - There is no age limit or income/asset level for executing a Roth conversion, allowing individuals to convert funds from a traditional IRA to a Roth IRA at any time [4][5] - The only age-related restriction pertains to required minimum distributions (RMDs), which apply to individuals aged 73 and older [5] - A Roth conversion can provide tax planning flexibility by potentially reducing or avoiding RMDs in the future [8] Financial Implications - Converting a traditional IRA to a Roth IRA incurs income taxes on the converted amount, which can significantly impact the tax bracket of the individual [8] - For example, converting $950,000 from an IRA to a Roth IRA would result in approximately $267,000 in income taxes, leaving around $683,000 in the Roth IRA after taxes [9] Retirement Planning Considerations - Individuals aged 62 can begin taking Social Security benefits, which do not affect eligibility for a Roth conversion [6] - A financial advisor can assist in evaluating the benefits and implications of a Roth conversion, particularly in the context of retirement savings and income planning [4][6]

Core Insights - Converting a 401(k) to a Roth IRA can be a beneficial strategy for tax-free growth and avoiding required minimum distributions (RMDs) [3][4] - It is advised to avoid converting the entire balance at once to prevent entering a higher tax bracket and increasing Medicare premiums [5][6] - Gradual conversions over several years can optimize tax liabilities and maintain lower tax brackets [6][7] Group 1 - Converting to a Roth IRA allows for tax-free growth and avoids RMDs, which can help reduce taxable income in retirement [3][4] - A full conversion of $1.6 million in one year could push an individual into the top tax bracket, leading to a tax rate as high as 37% [5][6] - Dividing the conversion into smaller amounts over several years can keep the individual in a lower tax bracket, potentially as low as 12% [6]

Group 1 - The optimal timing for Roth IRA conversions is not fixed and can vary based on individual circumstances [2] - Market declines can present opportunities for conversions, as recovering investments can lead to greater tax-free growth in the Roth IRA [2][3] - The primary factor influencing the decision to convert is the difference in tax rates between the current rate during conversion and the anticipated rate during future withdrawals [3][4] Group 2 - Converting when in a higher tax bracket (e.g., 35%) compared to a lower anticipated bracket (e.g., 22%) in retirement is generally not advisable [4] - Early-year conversions allow for potential growth throughout the year, but they also carry risks if income unexpectedly increases, leading to a higher tax bracket [5]