Retirement
Federal employees with traditional Thrift Savings Plans can now convert money to a Roth TSP. This moves their future qualified growth and withdrawals into tax-free territory, but creates a substantial current-year tax bill. However, Roth TSP balances are not subject to lifetime required minimum distributions (RMDs). Here’s how the tax…
The average 401(k) balance is about $351,242, but taxes can reduce how much of that money is available to spend.1 Required minimum distributions (RMDs) can create taxable income once they begin, potentially increasing your tax bill. Planning when and how you take money from your 401(k) could help limit the…
With only 10 years left until retirement, missing your employer’s 401(k) match can leave a sizable hole in your savings. If your employer offers a 4% match and you fail to claim it, you could give up almost $45,000 by retirement. That amount includes both missed contributions and investment growth…
At 59, $1.6 million may be enough to retire, but leaving work also means giving up health insurance coverage from your employer. Medicare generally doesn’t become available until age 65. Paying marketplace premiums during that six-year gap could increase your withdrawal rate, and that may undercut the longevity of your…
A lower withdrawal rate can help your retirement savings last longer, but it may also limit how much you spend. Moving from 4% to 5% gives you more income upfront while leaving less room for your portfolio to absorb market losses. Your decision will depend on the answer to this…
Doubling your salary can increase your lifetime earnings, but your Social Security benefit will not increase at the same rate. As your career earnings rise, each additional dollar has a smaller effect on your monthly benefit. Comparing salaries of $75,000 and $150,000 can show how that difference could affect your…
A $2.5 million portfolio could support $100,000 in annual retirement spending, but taxes might require you to withdraw more than that amount. Account type determines the portion of each distribution you keep. Knowing that amount can help you estimate whether your spending goal is sustainable and what adjustments you may…
Retiring at 52 could lock up a big part of your nest egg until age 59 ½. If most of your money sits in a 401(k) or traditional IRA, early withdrawals might trigger a 10% penalty. A Roth conversion ladder, however, may provide access sooner without that charge, but you…
You took a $100,000 distribution by check from your 401(k) and are now wondering if the IRS will penalize you. The answer depends on whether you completed the rollover correctly. A check isn’t necessarily problematic, but missing this deadline could cost you roughly $34,000 in taxes and a penalty.The 60-Day…
If you need to withdraw $10,000 each month from a $1 million portfolio, that’s a 12% annual withdrawal rate. Sustaining this rate over a long retirement could increase the risk of depleting your savings. However, the gap between your spending goal and what your portfolio can support isn’t necessarily a…
