Unlike your commute or those conference calls, income taxes don’t go away once you hit retirement. In fact, income taxes can be your single largest expense in your retirement years, which means it’s important to have a sense of what’s coming, so you can plan for it. However, many retirees don’t have a good grasp on what exactly qualifies as taxable income during retirement and how large a tax bill they can expect. In addition, many find they’re not actually in a lower tax bracket than when they were working. This can feel counterintuitive, but in retirement, you may Read More
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Calculating how much you can safely spend in retirement means knowing your retirement withdrawal rate. Here we address some common questions about how you can avoid running out of money in retirement. What is the withdrawal rate? This is simply the rate you withdraw each year for living or other expenses throughout retirement, and it is typically expressed as a percentage of your initial balance. It’s often called a sustainable withdrawal rate (SWR) or the 4% Rule. This rule of thumb was based on historical stock and bond returns from 1926 to 1976, and is indicative of how long Read More
Married couples have more options than single people do when it comes to Social Security benefits. That’s because each member of a couple can opt to claim at different ages and may also have access to spousal benefits. To maximize Social Security, you and your spouse need to work together to identify the claiming strategy that’s best. Here are a few potential strategies for you to know about and to discuss with your wealth advisor, who can help you understand the complexities of each and how they may apply to your financial plan. Strategy #1: Delay filing for benefits Read More
Investing isn’t just about how much money you have to invest or where to invest it. A good investment strategy takes in another important component: Time. What is the investment time horizon? The time horizon for an investment refers to how long you will have the money held in the investment before you need the funds, whether for retirement or some other purpose, like a child’s college tuition. The length of time you’ll be invested will vary depending on the ultimate financial goal. Where risk tolerance comes into the picture Generally speaking, the longer the time horizon, the more Read More
If you have (or anticipate having) significant family wealth and would like to ensure that you’re able to create a family legacy and ensure family members receive the wealth, you may want to set up a trust. What is a family trust? A family trust is a legal, documented way to ensure that your wealth is managed according to your wishes on behalf of your beneficiaries. You can use a family trust to specify what share of assets your family members can access and when (for example, a child can access their share on their 30th birthday). There are Read More
Have you worked hard and find yourself in a solid financial situation? Feeling pretty good about your net worth? Guess what: Wealthy people need the scoop on secrets to financial success, too. You likely didn’t get to this point of not worrying whether there’s money in your bank account without some smart money management, but that doesn’t mean you can’t benefit from learning a new financial lesson or two. Here are seven financial “secrets” you should know. Invest early and often It can’t be said enough: There’s enormous power in beginning to invest early, thanks to compound interest. There’s Read More
Is the so-called “Great Wealth Transfer” on your radar? You might have heard this term, but what does it mean — and more importantly, what does it mean for you? The baby boomers are retiring, and it’s this generation that holds a substantial majority of wealth in our country. They are said to be the first generation in United States history to do better than their children, the Gen Xers and Millennials. It’s estimated that their assets are valued in the trillions of dollars, anywhere from $15 trillion to $68 trillion, thanks in part to the fact that they came into the Read More
The early years in retirement are among the most important when it comes to how long the money in your retirement accounts will last. Make the most of your hard-earned savings with these top five money moves to make in retirement. Keep the right risk-return balance in your investmentsGoing too conservative with your investments can be as hazardous as being overly aggressive. That’s because an asset allocation strategy that errs too much on the conservative side may expose you to the negative effects of inflation, erode your savings, and limit the potential that diversification can bring. Your retirement may last upwards of Read More
If you are earning in the hundreds of thousands of dollars per year, and you already have a 401(k), IRAs, and other retirement accounts, there’s one more way to boost your retirement coffers: It’s called a deferred compensation plan. Here’s how this works and why you should consider it. What is a deferred compensation plan? These plans are structured to hold a portion of an employee’s pay until later in life, often retirement. There are two types of plans: qualified deferred compensation plans, and non-qualified. Here are the fundamental differences between the two: For a deferred compensation plan to be Read More
Rebalancing your portfolio can help you stay on track to meet your financial goals. But when is the right time to rebalance? Learn more about this key investing tactic. First, what is a balanced portfolio? To understand the how and when of rebalancing, it makes sense to first understand what a balanced portfolio is. In a nutshell, it means a portfolio with an asset allocation that is in line with your financial plan, which includes your financial goals, your individual risk tolerance, your time horizon, and so on. What does it mean to rebalance your portfolio? A portfolio doesn’t Read More