4 days ago
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Figuring out when you can afford to retire often comes down to determining whether your ***** ets will produce enough annual income to support your lifestyle and spending needs.
With $500,000 in a Roth IRA and $2,000 in combined monthly Social Security and pension payments, you may be able to afford to retire at age 62. However, that will mean living on approximately $44,000 per year. Some retirees may be satisfied with this level of income, but it may not support you adequately if you plan to do a lot of traveling or live in a high-cost area.
Before making the decision to stop working at 62, you'll also need to develop a plan for paying for health insurance since you won't be eligible for Medicare until age 65.
If you need help deciding when to retire, connect with a financial advisor and have them build you an income plan based on your unique financial situation.
#retire #plan #need #smartasset
Figuring out when you can afford to retire often comes down to determining whether your ***** ets will produce enough annual income to support your lifestyle and spending needs.
With $500,000 in a Roth IRA and $2,000 in combined monthly Social Security and pension payments, you may be able to afford to retire at age 62. However, that will mean living on approximately $44,000 per year. Some retirees may be satisfied with this level of income, but it may not support you adequately if you plan to do a lot of traveling or live in a high-cost area.
Before making the decision to stop working at 62, you'll also need to develop a plan for paying for health insurance since you won't be eligible for Medicare until age 65.
If you need help deciding when to retire, connect with a financial advisor and have them build you an income plan based on your unique financial situation.
#retire #plan #need #smartasset
12 days ago
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Transferring some of your retirement savings from a tax-deferred account like a 401(k) to a Roth IRA can help you reduce or possibly avoid required minimum distributions (RMDs) and income taxes later on. It can also be beneficial if you want to leave tax-free savings to your heirs. A Roth conversion can therefore provide you with some flexibility when tax planning your finances in retirement.
However, you can't escape paying income taxes on your tax-deferred savings entirely, and converting 25% of a large 401(k) could lead to a sizable tax bill you'll have to pay right now. You may want to consider a conversion strategy based on keeping you from entering a higher marginal income tax bracket rather than converting a set percentage, although other timing factors may come into play.
Here are some factors to think about. You can also get matched with a financial advisor for free if you need help developing a 401(k) conversion plan that will balance present and future tax consequences.
Because Roth accounts are not subject to the required minimum distribution (RMD) rules that apply to 401(k) accounts, a retirement saver may want to consider converting funds from a 401(k) to a Roth IRA. Under RMD rules, funds left in a 401(k) or similar tax-deferred account have to be withdrawn on a strict schedule starting at age 73 or 75, depending on your birth year.
#conversion
Transferring some of your retirement savings from a tax-deferred account like a 401(k) to a Roth IRA can help you reduce or possibly avoid required minimum distributions (RMDs) and income taxes later on. It can also be beneficial if you want to leave tax-free savings to your heirs. A Roth conversion can therefore provide you with some flexibility when tax planning your finances in retirement.
However, you can't escape paying income taxes on your tax-deferred savings entirely, and converting 25% of a large 401(k) could lead to a sizable tax bill you'll have to pay right now. You may want to consider a conversion strategy based on keeping you from entering a higher marginal income tax bracket rather than converting a set percentage, although other timing factors may come into play.
Here are some factors to think about. You can also get matched with a financial advisor for free if you need help developing a 401(k) conversion plan that will balance present and future tax consequences.
Because Roth accounts are not subject to the required minimum distribution (RMD) rules that apply to 401(k) accounts, a retirement saver may want to consider converting funds from a 401(k) to a Roth IRA. Under RMD rules, funds left in a 401(k) or similar tax-deferred account have to be withdrawn on a strict schedule starting at age 73 or 75, depending on your birth year.
#conversion
12 days ago
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Say that, as a married couple, you have $1.4 million in your IRAs and, at age 66, expect about $4,100 per month in Social Security. Based on some typical rules of thumb, you might be able to plan on about $108,000 per year of retirement income, but how much you actually need and will be able to take will depend on your specific circumstances.
Here's how to think about it, including a breakdown of the numbers. And if you want someone to double check your own retirement calculations, consider matching with a financial advisor for free.
Frequent commenter to this section Kevin Caldwell, Principal with the wealth management firm Golden Road Advisors, refers to retirement planning as an approach in "buckets." As you prepare for retirement, it's good to think about your budget in terms of specific parts of life. One way to organize this is:
Needs
#Social #based
Say that, as a married couple, you have $1.4 million in your IRAs and, at age 66, expect about $4,100 per month in Social Security. Based on some typical rules of thumb, you might be able to plan on about $108,000 per year of retirement income, but how much you actually need and will be able to take will depend on your specific circumstances.
Here's how to think about it, including a breakdown of the numbers. And if you want someone to double check your own retirement calculations, consider matching with a financial advisor for free.
Frequent commenter to this section Kevin Caldwell, Principal with the wealth management firm Golden Road Advisors, refers to retirement planning as an approach in "buckets." As you prepare for retirement, it's good to think about your budget in terms of specific parts of life. One way to organize this is:
Needs
#Social #based
13 days ago
KO and JNJ have raised dividends for decades, but their low yields mean replacing $120K in salary demands $3M or more in capital.
Realty Income and Verizon yield 5% to 6%, cutting required capital to $2M, but dividend growth in this band slows to pennies annually.
A 12% yield that never grows from a fund losing 3% NAV yearly leaves both buying power and principal noticeably smaller after a decade.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Consider a $120,000 salary, which sits near the ceiling of median household income in expensive metros and is roughly what senior engineers, experienced nurse practitioners, and mid-career attorneys pull down before taxes. Replacing that with dividend income instead of a regular paycheck is the goal that quietly drives most late-career portfolio decisions, and the amount of capital required swings by millions depending on the yield you are willing to accept.
#income #Dividend #Career
Realty Income and Verizon yield 5% to 6%, cutting required capital to $2M, but dividend growth in this band slows to pennies annually.
A 12% yield that never grows from a fund losing 3% NAV yearly leaves both buying power and principal noticeably smaller after a decade.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Consider a $120,000 salary, which sits near the ceiling of median household income in expensive metros and is roughly what senior engineers, experienced nurse practitioners, and mid-career attorneys pull down before taxes. Replacing that with dividend income instead of a regular paycheck is the goal that quietly drives most late-career portfolio decisions, and the amount of capital required swings by millions depending on the yield you are willing to accept.
#income #Dividend #Career
13 days ago
A 4% yield requires $2.34 million in capital versus $936,000 at 10%, but high yields risk NAV erosion and return-of-capital distributions.
Dividend-growth stocks at 4% compounding 7% annually produce roughly $184,000 in year 10, versus a flat $93,600 from a 10% high-yield portfolio.
Auditing actual after-tax spending may reveal you only need $6,000 monthly instead of $7,800, reducing required portfolio capital by $500,000.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Replacing $7,800 a month, or $93,600 a year, from dividends is a specific number with a specific answer: it depends entirely on the yield you accept. The right yield choice is the difference between a portfolio that grows into an inflation hedge and one that quietly liquidates itself while paying you back with your own principal. This piece lays out the capital math at three yield tiers, using durable dividend payers as anchors, and flags where the yield trap risk actually lives.
#Dividend #advisor
Dividend-growth stocks at 4% compounding 7% annually produce roughly $184,000 in year 10, versus a flat $93,600 from a 10% high-yield portfolio.
Auditing actual after-tax spending may reveal you only need $6,000 monthly instead of $7,800, reducing required portfolio capital by $500,000.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Replacing $7,800 a month, or $93,600 a year, from dividends is a specific number with a specific answer: it depends entirely on the yield you accept. The right yield choice is the difference between a portfolio that grows into an inflation hedge and one that quietly liquidates itself while paying you back with your own principal. This piece lays out the capital math at three yield tiers, using durable dividend payers as anchors, and flags where the yield trap risk actually lives.
#Dividend #advisor
13 days ago
Generating $98,400 annually in dividends requires anywhere from $820K at a 12% yield to $2.81M at a conservative 3.5% yield.
Choosing high-yield REITs and BDCs over qualified dividend stocks can cost a married couple somewhere between $15,000 and $20,000 more in annual taxes at the same income level.
A 3.5% yield growing 8% annually doubles income in roughly 9 years, while high-yield portfolios with eroding NAVs can leave investors poorer in real terms.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Let's run the math on what it actually takes to replace $8,200 a month in dividend income. That works out to $98,400 a year before taxes. To put that in perspective, it is roughly what a mid-career software engineer or a hospital pharmacist takes home, or what a two-earner household clearing six figures actually spends after payroll deductions and savings are taken out. The amount of capital you need to generate that income hinges entirely on the yield you are willing to accept, and what you keep after taxes depends on where those dividends come from and which state you call home.
#income #advisor
Choosing high-yield REITs and BDCs over qualified dividend stocks can cost a married couple somewhere between $15,000 and $20,000 more in annual taxes at the same income level.
A 3.5% yield growing 8% annually doubles income in roughly 9 years, while high-yield portfolios with eroding NAVs can leave investors poorer in real terms.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Let's run the math on what it actually takes to replace $8,200 a month in dividend income. That works out to $98,400 a year before taxes. To put that in perspective, it is roughly what a mid-career software engineer or a hospital pharmacist takes home, or what a two-earner household clearing six figures actually spends after payroll deductions and savings are taken out. The amount of capital you need to generate that income hinges entirely on the yield you are willing to accept, and what you keep after taxes depends on where those dividends come from and which state you call home.
#income #advisor
13 days ago
Generating $3,100 a month in dividends requires $1.06M at a 3.5% yield, but only $372,000 at a 10% yield.
High-yield portfolios often erode principal over time, while a 3.5% dividend growing 8% annually doubles income in just nine years.
Barbelling dividend-growth stocks with a monthly payer like O targets a ~4% blended yield, requiring roughly $930,000 in capital.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Replacing $3,100 a month in dividend income means generating $37,200 a year from a portfolio you build yourself. That number lands between a Social Security supplement and a modest salary replacement, and hitting it is a math problem before it is an investing problem. Divide the income target by the yield your portfolio earns, and you get the capital required. This piece walks through what that capital looks like at three yield tiers, using dividend-payer examples from the current market, and explains why the highest yield rarely produces the best long-term result.
#best
High-yield portfolios often erode principal over time, while a 3.5% dividend growing 8% annually doubles income in just nine years.
Barbelling dividend-growth stocks with a monthly payer like O targets a ~4% blended yield, requiring roughly $930,000 in capital.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Replacing $3,100 a month in dividend income means generating $37,200 a year from a portfolio you build yourself. That number lands between a Social Security supplement and a modest salary replacement, and hitting it is a math problem before it is an investing problem. Divide the income target by the yield your portfolio earns, and you get the capital required. This piece walks through what that capital looks like at three yield tiers, using dividend-payer examples from the current market, and explains why the highest yield rarely produces the best long-term result.
#best
13 days ago
Dave Ramsey bluntly told Lucy her 35-year-old husband should have cut his parents' phone plan a full decade ago.
At roughly $50 a month, the husband's parents have paid about $6,000 over 10 years for his single phone line.
Audit 90 days of bank statements, price independent phone plans in the range of $25 to $45 a month, and set a firm date to transfer every account.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Lucy, a 34-year-old caller from Charlotte, phoned into The Ramsey Show to settle a marriage debate. She and her 35-year-old husband got married in January, combined their finances, and opened a joint checking account.
#lucy
At roughly $50 a month, the husband's parents have paid about $6,000 over 10 years for his single phone line.
Audit 90 days of bank statements, price independent phone plans in the range of $25 to $45 a month, and set a firm date to transfer every account.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Lucy, a 34-year-old caller from Charlotte, phoned into The Ramsey Show to settle a marriage debate. She and her 35-year-old husband got married in January, combined their finances, and opened a joint checking account.
#lucy
13 days ago
Caleb put $10,000 down on a lease to reach $240 monthly payments, then drove 4,000 miles over the cap with 13 months left.
Kamel explains leases charge you for a car's steepest depreciation years, leaving a large cash down payment with zero recoverable equity.
Kamel recommends a lease buyout as the best exit if the contract residual falls below market value, letting you sell the car for a profit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A caller named Caleb opened a recent Ramsey Show Highlights segment with a bit of a shocking statement: "I hate myself now after listening to you guys."
#caleb #lease #highlights
Kamel explains leases charge you for a car's steepest depreciation years, leaving a large cash down payment with zero recoverable equity.
Kamel recommends a lease buyout as the best exit if the contract residual falls below market value, letting you sell the car for a profit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A caller named Caleb opened a recent Ramsey Show Highlights segment with a bit of a shocking statement: "I hate myself now after listening to you guys."
#caleb #lease #highlights
14 days ago
RMDs are locked to the prior December 31 balance, so a midyear IRA collapse from $100,000 to $16,000 still requires the full withdrawal.
A $4,065 RMD can trigger a 'tax torpedo,' pushing Social Security into taxable income and adding roughly $6,820 to total gross income.
Retirees 70½ or older can use a Qualified Charitable Distribution to satisfy the RMD without adding to adjusted gross income, reducing the Social Security tax hit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A retired man in his mid-seventies ended December with approximately $100,000 in a traditional IRA. Much of it sat in a private-credit investment he had treated as a conservative source of income. Then the investment collapsed. By summer, his account was worth approximately $16,000. He called the custodian expecting his required minimum distribution (RMD) to fall with it. It did not.
#december #adding #investment
A $4,065 RMD can trigger a 'tax torpedo,' pushing Social Security into taxable income and adding roughly $6,820 to total gross income.
Retirees 70½ or older can use a Qualified Charitable Distribution to satisfy the RMD without adding to adjusted gross income, reducing the Social Security tax hit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A retired man in his mid-seventies ended December with approximately $100,000 in a traditional IRA. Much of it sat in a private-credit investment he had treated as a conservative source of income. Then the investment collapsed. By summer, his account was worth approximately $16,000. He called the custodian expecting his required minimum distribution (RMD) to fall with it. It did not.
#december #adding #investment
14 days ago
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Late-in-life Roth conversions can take some tricky math.
As you approach retirement, one of the most important questions will be how to manage the taxes on your retirement income. For households that rely on pre-tax portfolios, like a 401(k) or a traditional IRA, this means anticipating ordinary income taxes on all of your withdrawals. It also means anticipating the necessary withdrawals **** ociated with the IRS' Required Minimum Distributions (RMD) rule.
As a result, it's common for people in their 60s to at least consider converting their money to a Roth IRA. This can have significant upsides. It will eliminate your taxes in retirement, along with your RMD requirements, and will even improve the after-tax value of your estate.
The problem is that, as you close in on retirement, a Roth conversion can get very expensive. You will pay quite a lot of up-front conversion taxes in exchange for those long-term income tax savings.
#roth #income #means #finance
Late-in-life Roth conversions can take some tricky math.
As you approach retirement, one of the most important questions will be how to manage the taxes on your retirement income. For households that rely on pre-tax portfolios, like a 401(k) or a traditional IRA, this means anticipating ordinary income taxes on all of your withdrawals. It also means anticipating the necessary withdrawals **** ociated with the IRS' Required Minimum Distributions (RMD) rule.
As a result, it's common for people in their 60s to at least consider converting their money to a Roth IRA. This can have significant upsides. It will eliminate your taxes in retirement, along with your RMD requirements, and will even improve the after-tax value of your estate.
The problem is that, as you close in on retirement, a Roth conversion can get very expensive. You will pay quite a lot of up-front conversion taxes in exchange for those long-term income tax savings.
#roth #income #means #finance
14 days ago
The Bipartisan Budget Act of 2015 killed the restricted application strategy for anyone born after January 1, 1954, closing it to all new claimants by 2026.
Deemed filing now forces spouses to claim both spousal and personal retirement benefits simultaneously, eliminating the ability to collect one while the other grows.
Couples can still delay the higher earner's benefit to 70 for roughly 8% annual growth, and sequence survivor benefits separately from retirement benefits.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Picture a couple in their mid-sixties. Linda spent 35 years as a hospital administrator; Mark earned less as a school counselor. As they plan their Social Security claims, Linda remembers the move her older sister used years ago. She collected a spousal check while allowing the benefit on her own work record to grow until 70. Then she then dropped the smaller payment and switched to her larger one.
#benefits #benefit #years #january
Deemed filing now forces spouses to claim both spousal and personal retirement benefits simultaneously, eliminating the ability to collect one while the other grows.
Couples can still delay the higher earner's benefit to 70 for roughly 8% annual growth, and sequence survivor benefits separately from retirement benefits.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Picture a couple in their mid-sixties. Linda spent 35 years as a hospital administrator; Mark earned less as a school counselor. As they plan their Social Security claims, Linda remembers the move her older sister used years ago. She collected a spousal check while allowing the benefit on her own work record to grow until 70. Then she then dropped the smaller payment and switched to her larger one.
#benefits #benefit #years #january
14 days ago
UTMA custodial accounts irrevocably transfer to the grandchild at age 21, giving them full legal control to spend the money however they choose.
A 529 keeps the owner in control indefinitely and allows penalty-free beneficiary reassignments or a $35,000 Roth IRA rollover under SECURE 2.0.
California and a few states let donors extend UTMA control to age 25, but once the account opens, the termination age in the paperwork is locked.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A custodial account opened for a grandchild under the Uniform Transfers to Minors Act transfers to the beneficiary at the state's age of termination, typically 21. At that point, the new adult owner controls how the funds are spent, and the former custodian has no legal authority over the account. A 529 college savings plan operates differently, with the account owner retaining control indefinitely. The distinction between a UTMA custodial account and a 529 plan matters for grandparents evaluating how to structure gifts to minors.
#Legal #indefinitely
A 529 keeps the owner in control indefinitely and allows penalty-free beneficiary reassignments or a $35,000 Roth IRA rollover under SECURE 2.0.
California and a few states let donors extend UTMA control to age 25, but once the account opens, the termination age in the paperwork is locked.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A custodial account opened for a grandchild under the Uniform Transfers to Minors Act transfers to the beneficiary at the state's age of termination, typically 21. At that point, the new adult owner controls how the funds are spent, and the former custodian has no legal authority over the account. A 529 college savings plan operates differently, with the account owner retaining control indefinitely. The distinction between a UTMA custodial account and a 529 plan matters for grandparents evaluating how to structure gifts to minors.
#Legal #indefinitely
14 days ago
Solo retirement in The Villages runs roughly $60,000 a year, and with Social Security covering about $24,000 annually, the required portfolio falls somewhere between $900,000 and $1.03 million.
Survivor rules pay only the higher Social Security benefit, cutting roughly $19,000 in annual income while The Villages' fixed costs stay nearly unchanged.
Delaying Social Security to age 70 adds between $700 and $900 monthly and trims the required portfolio by roughly $200,000, hardening the plan against bad market years.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
The pitch for The Villages is almost always drawn as a couple. Two people in a golf cart, matching polos, a shared front porch. Financial planning tends to follow the same picture: joint Social Security, one homeowner's insurance policy, food and utilities split between two. Then life edits the plan. A spouse dies, a marriage ends, or the move happens years after being widowed, and the same house, the same amenity fee, the same square footage now has one person paying for it. The question is what that actually costs and what portfolio makes it work.
#financial #required
Survivor rules pay only the higher Social Security benefit, cutting roughly $19,000 in annual income while The Villages' fixed costs stay nearly unchanged.
Delaying Social Security to age 70 adds between $700 and $900 monthly and trims the required portfolio by roughly $200,000, hardening the plan against bad market years.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
The pitch for The Villages is almost always drawn as a couple. Two people in a golf cart, matching polos, a shared front porch. Financial planning tends to follow the same picture: joint Social Security, one homeowner's insurance policy, food and utilities split between two. Then life edits the plan. A spouse dies, a marriage ends, or the move happens years after being widowed, and the same house, the same amenity fee, the same square footage now has one person paying for it. The question is what that actually costs and what portfolio makes it work.
#financial #required
14 days ago
A 65-year-old on average Social Security needs just $125,000 invested to bridge the gap to $2,500 a month in Myrtle Beach.
Coastal wind, flood, and hazard insurance stacks to between $6,000 and $9,000 annually, consuming up to 30% of a $30,000 retirement budget.
Early retirees between ages 55 and 60 who lack Social Security income need between $800,000 and $900,000 and must engineer an ACA healthcare bridge before relocating.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A common question is whether you can retire near the ocean on modest money. South Carolina taxes lightly, the Grand Strand stays warm, and $2,500 a month, which is roughly the average Social Security check plus a small supplement, feels like it ought to stretch pretty far. The real question is whether the math actually holds once you price in coastal reality. It can, but only under specific choices, and the trap most planners overlook involves coastal insurance costs rather than everyday expenses.
#month
Coastal wind, flood, and hazard insurance stacks to between $6,000 and $9,000 annually, consuming up to 30% of a $30,000 retirement budget.
Early retirees between ages 55 and 60 who lack Social Security income need between $800,000 and $900,000 and must engineer an ACA healthcare bridge before relocating.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A common question is whether you can retire near the ocean on modest money. South Carolina taxes lightly, the Grand Strand stays warm, and $2,500 a month, which is roughly the average Social Security check plus a small supplement, feels like it ought to stretch pretty far. The real question is whether the math actually holds once you price in coastal reality. It can, but only under specific choices, and the trap most planners overlook involves coastal insurance costs rather than everyday expenses.
#month
14 days ago
St. George retirement at 65 demands a $525,000 paid-off home plus $450,000 in invested ******* ets, ******* uming a 4% withdrawal rate and full Social Security.
Retiring at 62 instead of 67 shrinks Social Security by 30% and tightens the safe withdrawal rate, pushing the required liquid portfolio to $1.1 million.
Utah's flat tax on all retirement income can combine with Medicare IRMAA surcharges to push large Roth conversions toward a 40% effective marginal rate.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
St. George, Utah, keeps surfacing whenever readers who are planning to retire in five or ten years ask about fast-growing retirement destinations outside Florida and Arizona. Tucked into the red rock country of the state's southwest corner, it has mild winters, nearby national parks, and has climbed the fastest-growing metro rankings for years while drawing a large share of retirees. What follows walks through the actual cost picture in current dollars, the portfolio target that budget implies, and the tax mechanic most buyers overlook until they file that first return.
#rate #Portfolio
Retiring at 62 instead of 67 shrinks Social Security by 30% and tightens the safe withdrawal rate, pushing the required liquid portfolio to $1.1 million.
Utah's flat tax on all retirement income can combine with Medicare IRMAA surcharges to push large Roth conversions toward a 40% effective marginal rate.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
St. George, Utah, keeps surfacing whenever readers who are planning to retire in five or ten years ask about fast-growing retirement destinations outside Florida and Arizona. Tucked into the red rock country of the state's southwest corner, it has mild winters, nearby national parks, and has climbed the fastest-growing metro rankings for years while drawing a large share of retirees. What follows walks through the actual cost picture in current dollars, the portfolio target that budget implies, and the tax mechanic most buyers overlook until they file that first return.
#rate #Portfolio
14 days ago
Retired married couples can withdraw ~$46,700 from a traditional IRA tax-free by stacking three 2026 deductions, including $32,200 standard and $12,000 in new senior deductions.
Most retirees skip this window by ****** uming all IRA withdrawals trigger taxes, waiting for forced RMDs at 73 when rates can reach 22% or higher.
Couples can use the window to reinvest IRA funds in a brokerage account or convert to Roth, both strategies carrying zero federal tax owed.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Every January, a specific window opens for retired married couples: they can pull roughly $46,700 out of a traditional IRA, count it as ordinary income, and owe nothing in federal tax. The window closes on December 31. Most couples do not use it, and the mechanics of why they leave it unused, and what it costs them later, are the actual story.
#advisor
Most retirees skip this window by ****** uming all IRA withdrawals trigger taxes, waiting for forced RMDs at 73 when rates can reach 22% or higher.
Couples can use the window to reinvest IRA funds in a brokerage account or convert to Roth, both strategies carrying zero federal tax owed.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Every January, a specific window opens for retired married couples: they can pull roughly $46,700 out of a traditional IRA, count it as ordinary income, and owe nothing in federal tax. The window closes on December 31. Most couples do not use it, and the mechanics of why they leave it unused, and what it costs them later, are the actual story.
#advisor
14 days ago
Three income buckets slash the capital required to hit $79,200 annually, ranging from $2.26M for conservative dividend growers down to $660K for high-yield BDCs.
A dividend stream growing at 8% annually doubles in nine years, while a flat high-yield payout stagnates and can shrink if underlying principal erodes.
REIT and BDC distributions are taxed up to 37% as ordinary income versus 20% for qualified dividends, potentially erasing the high-yield tier's income advantage.
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Replacing $6,600 a month in dividend income means engineering a portfolio that throws off $79,200 a year in cash. That is roughly what a comfortable retirement runs in most of the country, and it is the number a lot of pre-retirees quietly benchmark against. The capital you need depends almost entirely on one variable, which is the yield you are willing to reach for.
#advisor #bdcs
A dividend stream growing at 8% annually doubles in nine years, while a flat high-yield payout stagnates and can shrink if underlying principal erodes.
REIT and BDC distributions are taxed up to 37% as ordinary income versus 20% for qualified dividends, potentially erasing the high-yield tier's income advantage.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Replacing $6,600 a month in dividend income means engineering a portfolio that throws off $79,200 a year in cash. That is roughly what a comfortable retirement runs in most of the country, and it is the number a lot of pre-retirees quietly benchmark against. The capital you need depends almost entirely on one variable, which is the yield you are willing to reach for.
#advisor #bdcs
14 days ago
Camping one weekend on riverfront land held inside a self-directed IRA can trigger a prohibited transaction, deeming the entire account's value as taxable income, even if that value reaches $900,000.
That $900,000 income spike pushes the owner into Medicare's highest IRMAA bracket two years later, raising premiums by $578 a month or $6,936 a year.
IRA owners can avoid disqualification by never personally using or improving the property, and consulting a tax professional before setting foot on it.
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A 63-year-old spots riverfront land in a federal auction and buys it through a self-directed individual retirement account (IRA). The parcel joins several other investments inside the account and sits untouched for a year. Then he spends one summer weekend there. He pitches a tent, cooks over a fire, and drives home Sunday night. No rent changes hands. He makes no improvements. It feels less like using a retirement ****** et than visiting land he already considers his.
#year #weekend #value #income
That $900,000 income spike pushes the owner into Medicare's highest IRMAA bracket two years later, raising premiums by $578 a month or $6,936 a year.
IRA owners can avoid disqualification by never personally using or improving the property, and consulting a tax professional before setting foot on it.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A 63-year-old spots riverfront land in a federal auction and buys it through a self-directed individual retirement account (IRA). The parcel joins several other investments inside the account and sits untouched for a year. Then he spends one summer weekend there. He pitches a tent, cooks over a fire, and drives home Sunday night. No rent changes hands. He makes no improvements. It feels less like using a retirement ****** et than visiting land he already considers his.
#year #weekend #value #income
14 days ago
A 3.5% dividend-growth portfolio anchored by JNJ or KO can double annual income every nine years without adding a single dollar of capital.
PEP and KMB pay qualified dividends taxed at preferential rates, unlike BDC or mortgage REIT distributions, a difference that can shift required capital by six figures.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Think about what it takes to collect $11,800 every month purely from dividends, never selling a single share. That works out to $141,600 over the course of a year, roughly what a physician ***** istant earns, or about what a comfortable retirement costs in an expensive coastal city. The amount of capital you need to make that happen swings wildly based on the yield you target, and the compromises you make at each yield level are really what this whole exercise is about.
At a blended 3.5% portfolio yield, $141,600 divided by 0.035 requires roughly $4 million in capital. At 4%, the number drops to about $3.5 million. This is the dividend-growth lane, populated by companies that raise their payout every year and let the income stream outrun inflation.
#capital #every #Growth
PEP and KMB pay qualified dividends taxed at preferential rates, unlike BDC or mortgage REIT distributions, a difference that can shift required capital by six figures.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Think about what it takes to collect $11,800 every month purely from dividends, never selling a single share. That works out to $141,600 over the course of a year, roughly what a physician ***** istant earns, or about what a comfortable retirement costs in an expensive coastal city. The amount of capital you need to make that happen swings wildly based on the yield you target, and the compromises you make at each yield level are really what this whole exercise is about.
At a blended 3.5% portfolio yield, $141,600 divided by 0.035 requires roughly $4 million in capital. At 4%, the number drops to about $3.5 million. This is the dividend-growth lane, populated by companies that raise their payout every year and let the income stream outrun inflation.
#capital #every #Growth
15 days ago
Dividend aristocrats like JNJ and PEP require up to $6.5 million at yields between 3% and 4%, but they consistently grow income faster than inflation.
Realty Income (O) pays a monthly 5.1% yield with 115 consecutive quarterly increases, while Altria (MO) yields 6.3% but carries negative shareholders' equity.
A low-yield dividend portfolio growing 8% annually doubles income in nine years, likely outpacing a 12% static yield that risks steady principal erosion.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Imagine needing $19,000 to land in your checking account every single month, not from a paycheck but from dividends alone. That adds up to $228,000 over the course of a year, roughly what a dual‑income professional family spends in a pricey coastal city, or what a seasoned physician clears after taxes. The size of the nest egg required to generate that kind of cash flow varies by millions depending on the yield you target, and each possible yield brings a completely different set of compromises.
#yields #don 't
Realty Income (O) pays a monthly 5.1% yield with 115 consecutive quarterly increases, while Altria (MO) yields 6.3% but carries negative shareholders' equity.
A low-yield dividend portfolio growing 8% annually doubles income in nine years, likely outpacing a 12% static yield that risks steady principal erosion.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Imagine needing $19,000 to land in your checking account every single month, not from a paycheck but from dividends alone. That adds up to $228,000 over the course of a year, roughly what a dual‑income professional family spends in a pricey coastal city, or what a seasoned physician clears after taxes. The size of the nest egg required to generate that kind of cash flow varies by millions depending on the yield you target, and each possible yield brings a completely different set of compromises.
#yields #don 't
15 days ago
Qualifying for Social Security retirement requires 40 work credits earned over your career, with a maximum of 4 credits per year.
In 2026, workers earn one credit per $1,890 in wages or self-employment income, reaching the annual max at $7,560.
Workers who lack 40 credits may still collect spousal benefits worth up to 50% of a spouse's full retirement benefit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Many Americans ****** ume that reaching a certain age automatically means they'll qualify for Social Security retirement benefits. But age is only part of the equation.
#Retirement #reaching
In 2026, workers earn one credit per $1,890 in wages or self-employment income, reaching the annual max at $7,560.
Workers who lack 40 credits may still collect spousal benefits worth up to 50% of a spouse's full retirement benefit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Many Americans ****** ume that reaching a certain age automatically means they'll qualify for Social Security retirement benefits. But age is only part of the equation.
#Retirement #reaching
15 days ago
The $24,500 employee contribution limit for 401(k) and 403(b) plans is an individual ceiling shared across all plans, regardless of how many employers issue paychecks.
Workers who over-contribute must request a corrective distribution by April 15 of the following year or face being taxed twice on the excess amount.
A governmental 457(b) plan carries its own separate $24,500 limit, letting eligible workers contribute up to $49,000 total when combined with a 401(k) or 403(b).
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A research scientist splits her week between two labs working on a joint supercomputing project. Each employer issues a separate paycheck and provides its own retirement portal. The university offers a 403(b). The federal contractor offers a 401(k). She contributes $24,500 to each, and both dashboards congratulate her for reaching 100% of the annual limit. One employer sees $24,500. The other sees $24,500. The IRS sees one worker who deferred $49,000.
#limit #workers #plans
Workers who over-contribute must request a corrective distribution by April 15 of the following year or face being taxed twice on the excess amount.
A governmental 457(b) plan carries its own separate $24,500 limit, letting eligible workers contribute up to $49,000 total when combined with a 401(k) or 403(b).
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A research scientist splits her week between two labs working on a joint supercomputing project. Each employer issues a separate paycheck and provides its own retirement portal. The university offers a 403(b). The federal contractor offers a 401(k). She contributes $24,500 to each, and both dashboards congratulate her for reaching 100% of the annual limit. One employer sees $24,500. The other sees $24,500. The IRS sees one worker who deferred $49,000.
#limit #workers #plans
15 days ago
Caleb put $10,000 down on a lease to reach $240 monthly payments, then drove 4,000 miles over the cap with 13 months left.
Kamel explains leases charge you for a car's steepest depreciation years, leaving a large cash down payment with zero recoverable equity.
Kamel recommends a lease buyout as the best exit if the contract residual falls below market value, letting you sell the car for a profit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A caller named Caleb opened a recent Ramsey Show Highlights segment with a bit of a shocking statement: "I hate myself now after listening to you guys."
#down #best #ramsey
Kamel explains leases charge you for a car's steepest depreciation years, leaving a large cash down payment with zero recoverable equity.
Kamel recommends a lease buyout as the best exit if the contract residual falls below market value, letting you sell the car for a profit.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
A caller named Caleb opened a recent Ramsey Show Highlights segment with a bit of a shocking statement: "I hate myself now after listening to you guys."
#down #best #ramsey
15 days ago
Dynasty trusts remove ****** ets from a taxable estate permanently, letting wealth compound across generations without triggering a 40% estate tax at each death.
The $15 million federal exemption, made permanent in 2026, defines who benefits. Estates comfortably below that threshold gain nothing from this structure.
Forgetting to allocate GST exemption on IRS Form 709 in the gift year exposes every future generational transfer to a flat 40% tax.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
If you have real wealth and a taxable estate on the horizon, the Rockefeller family structure offers a template. In 1934, John D. Rockefeller Jr. locked most of the family fortune into a set of irrevocable trusts that have since carried ****** ets through six generations without a single federal estate tax bill. The structure has a name: Dynasty Trust, and it is still legal in 2026.
#dynasty #taxable
The $15 million federal exemption, made permanent in 2026, defines who benefits. Estates comfortably below that threshold gain nothing from this structure.
Forgetting to allocate GST exemption on IRS Form 709 in the gift year exposes every future generational transfer to a flat 40% tax.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
If you have real wealth and a taxable estate on the horizon, the Rockefeller family structure offers a template. In 1934, John D. Rockefeller Jr. locked most of the family fortune into a set of irrevocable trusts that have since carried ****** ets through six generations without a single federal estate tax bill. The structure has a name: Dynasty Trust, and it is still legal in 2026.
#dynasty #taxable
15 days ago
In 1983, Social Security was weeks from insolvency; Congress raised the retirement age to 67, taxed benefits, and not one check bounced.
A rumored 23% benefit cut requires no vote because Social Security legally cannot borrow, meaning checks automatically shrink if Congress misses the deadline.
Orman urges listeners to downsize, extend car life, and save aggressively now, treating any future Social Security check as a bonus, not a foundation.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Suze Orman opened a recent segment of her Women & Money podcast by reaching back to the last time Social Security stared down insolvency. Her words on that 1983 crisis: "Social Security was weeks, not 6 years away from not being able to pay full benefits. Congress fixed it. They raised the retirement age. That's when it went from 65 to 67, everybody. They taxed some benefits. They moved money around. And it was ugly. It was late, but they did it and not one check bounced."
#security
A rumored 23% benefit cut requires no vote because Social Security legally cannot borrow, meaning checks automatically shrink if Congress misses the deadline.
Orman urges listeners to downsize, extend car life, and save aggressively now, treating any future Social Security check as a bonus, not a foundation.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Suze Orman opened a recent segment of her Women & Money podcast by reaching back to the last time Social Security stared down insolvency. Her words on that 1983 crisis: "Social Security was weeks, not 6 years away from not being able to pay full benefits. Congress fixed it. They raised the retirement age. That's when it went from 65 to 67, everybody. They taxed some benefits. They moved money around. And it was ugly. It was late, but they did it and not one check bounced."
#security
15 days ago
PepsiCo (PEP) and Johnson & Johnson (JNJ) anchor the conservative tier, with 54 and 64 consecutive dividend raises and a combined yield near 3.5%.
Dividend-growth compounding turns $465,000 into roughly $1 million in a decade, unlocking $3,350 monthly without the principal erosion of high-yield alternatives.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
At age 53, with $465,000 tucked away, the goal is to build a portfolio that can start cutting monthly checks a decade from now. The math is unforgiving, but that 10‑year runway to age 63 changes which levers actually move the needle. Starting yield is one piece of the equation. Dividend growth is the other, and over a full decade, growth tends to win out.
This piece walks through what $465,000 produces today at three different yield levels, then shows why a lower-yield, faster-growing portfolio can out-earn a higher static payout by age 63. All three names in the framing, PepsiCo (NASDAQ:PEP), Johnson & Johnson (NYSE:JNJ), and Exxon Mobil (NYSE:XOM), sit inside the conservative tier for a reason.
#yield #Dividend
Dividend-growth compounding turns $465,000 into roughly $1 million in a decade, unlocking $3,350 monthly without the principal erosion of high-yield alternatives.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
At age 53, with $465,000 tucked away, the goal is to build a portfolio that can start cutting monthly checks a decade from now. The math is unforgiving, but that 10‑year runway to age 63 changes which levers actually move the needle. Starting yield is one piece of the equation. Dividend growth is the other, and over a full decade, growth tends to win out.
This piece walks through what $465,000 produces today at three different yield levels, then shows why a lower-yield, faster-growing portfolio can out-earn a higher static payout by age 63. All three names in the framing, PepsiCo (NASDAQ:PEP), Johnson & Johnson (NYSE:JNJ), and Exxon Mobil (NYSE:XOM), sit inside the conservative tier for a reason.
#yield #Dividend
17 days ago
PepsiCo (PEP) and Johnson & Johnson (JNJ) anchor the conservative tier, with 54 and 64 consecutive dividend raises and a combined yield near 3.5%.
Dividend-growth compounding turns $465,000 into roughly $1 million in a decade, unlocking $3,350 monthly without the principal erosion of high-yield alternatives.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
At age 53, with $465,000 tucked away, the goal is to build a portfolio that can start cutting monthly checks a decade from now. The math is unforgiving, but that 10‑year runway to age 63 changes which levers actually move the needle. Starting yield is one piece of the equation. Dividend growth is the other, and over a full decade, growth tends to win out.
This piece walks through what $465,000 produces today at three different yield levels, then shows why a lower-yield, faster-growing portfolio can out-earn a higher static payout by age 63. All three names in the framing, PepsiCo (NASDAQ:PEP), Johnson & Johnson (NYSE:JNJ), and Exxon Mobil (NYSE:XOM), sit inside the conservative tier for a reason.
#Growth #pepsico
Dividend-growth compounding turns $465,000 into roughly $1 million in a decade, unlocking $3,350 monthly without the principal erosion of high-yield alternatives.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
At age 53, with $465,000 tucked away, the goal is to build a portfolio that can start cutting monthly checks a decade from now. The math is unforgiving, but that 10‑year runway to age 63 changes which levers actually move the needle. Starting yield is one piece of the equation. Dividend growth is the other, and over a full decade, growth tends to win out.
This piece walks through what $465,000 produces today at three different yield levels, then shows why a lower-yield, faster-growing portfolio can out-earn a higher static payout by age 63. All three names in the framing, PepsiCo (NASDAQ:PEP), Johnson & Johnson (NYSE:JNJ), and Exxon Mobil (NYSE:XOM), sit inside the conservative tier for a reason.
#Growth #pepsico
24 days ago
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We have a combined pension and Social Security income of $8,400 per month that will only drop to $6,730 if one of us passes away. Our RMDs will start soon and we have $1.6 million in a 401(k) which we feel we can use a low-cost (expense ratio 0.12%) total return target fund to avoid the use of a robo-advisor that charges 0.3 – 0.8%. Plus, we have another $350,000 in Roths and a taxable brokerage account of $300,000 which RMDs would flow into. We own our home outright. In place of an annuity purchase can I simply use a target date fund in my IRA from which RMDs would be drawn automatically?
-JR
I hear a few different questions here, JR. First, should you purchase an annuity or rely on your investment portfolio? Next, is the cost of a robo-advisor worth it compared to a target date fund? And lastly, is a target date fund or robo-advisor sufficient for managing a portfolio like yours? Let's dig into each of them to help you get some answers. (And if you need more help answering questions like these, consider speaking with a financial advisor.)
An annuity is a form of insurance. You purchase it with the expectation that over the long term, the cost will be greater than the benefit. But, as with other types of insurance, it protects against a key risk. In this case, that risk is the possibility of running out of money, especially if you live longer than expected.
#cost #questions
We have a combined pension and Social Security income of $8,400 per month that will only drop to $6,730 if one of us passes away. Our RMDs will start soon and we have $1.6 million in a 401(k) which we feel we can use a low-cost (expense ratio 0.12%) total return target fund to avoid the use of a robo-advisor that charges 0.3 – 0.8%. Plus, we have another $350,000 in Roths and a taxable brokerage account of $300,000 which RMDs would flow into. We own our home outright. In place of an annuity purchase can I simply use a target date fund in my IRA from which RMDs would be drawn automatically?
-JR
I hear a few different questions here, JR. First, should you purchase an annuity or rely on your investment portfolio? Next, is the cost of a robo-advisor worth it compared to a target date fund? And lastly, is a target date fund or robo-advisor sufficient for managing a portfolio like yours? Let's dig into each of them to help you get some answers. (And if you need more help answering questions like these, consider speaking with a financial advisor.)
An annuity is a form of insurance. You purchase it with the expectation that over the long term, the cost will be greater than the benefit. But, as with other types of insurance, it protects against a key risk. In this case, that risk is the possibility of running out of money, especially if you live longer than expected.
#cost #questions
25 days ago
The HSA is the only account delivering all three tax advantages: deductible contributions (including FICA savings), tax-free growth, and tax-free qualified withdrawals.
Invest HSA funds in equity index funds, pay current medical bills from cash, and save receipts to reimburse yourself tax-free decades later.
After 65, HSA medical withdrawals don't count toward MAGI, helping retirees dodge IRMAA surcharges that add hundreds per month to Medicare premiums.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Walk into any physician lounge and you'll hear the same advice from the partners closing in on 60: fund the match in your 401(k), then send the next dollar to your Health Savings Account before you finish the deferral. The HSA is the only account in the federal code that escapes tax three separate times, and the people who do tax math for a living treat it accordingly.
#free #don 't #only #three
Invest HSA funds in equity index funds, pay current medical bills from cash, and save receipts to reimburse yourself tax-free decades later.
After 65, HSA medical withdrawals don't count toward MAGI, helping retirees dodge IRMAA surcharges that add hundreds per month to Medicare premiums.
Are you ahead, or behind on retirement? SmartAsset's free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don't waste another minute; learn more here.
Walk into any physician lounge and you'll hear the same advice from the partners closing in on 60: fund the match in your 401(k), then send the next dollar to your Health Savings Account before you finish the deferral. The HSA is the only account in the federal code that escapes tax three separate times, and the people who do tax math for a living treat it accordingly.
#free #don 't #only #three
