Thinking of Tapping Your Retirement Funds Early What You Need to Know

Thinking of Tapping Your Retirement Funds Early? What You Need to Know

If you are suddenly in need of a substantial amount of cash, probably the last thing you should do is tap your retirement funds. They are the key to a financially comfortable retirement. The younger you are, the less likely you are to think about saving for retirement, but you certainly don’t want to end up living off of only Social Security. However, there are times when there might not be any other alternative than dipping into your 401(k), IRA or other retirement plan. In that case, you have to be concerned not only with any tax liability, but also early withdrawal penalties if the funds are withdrawn before reaching age 59½. Plus, some distributions may only be partially taxable and some not taxable at all, while others are fully taxable.

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Is a Roth Conversion Right for You? But Be Careful, They Can No Longer Be Undone!

Article Highlights:

  • Conversion Timing
  • Why Convert?
  • When to Convert?
  • Issues to Consider Before Making the Decision

Roth IRA accounts provide the benefits of tax-free accumulation and, once you reach retirement age, tax-free distributions. This is the reason why so many taxpayers are converting their traditional IRA account to a Roth IRA. However, to do so, you must generally pay tax on the on the converted amount. After making a conversion, your circumstances may change, and you may find yourself wishing you had not made the conversion. In the past, you could change your mind later and undo the conversion. But that option is no longer available under tax reform. So, be careful: once a conversion is made, there is no going back. Read more

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Tax Reform Cracks Down on IRA Recharacterizations

Article Highlights:

  • Tax Trap
  • Traditional IRA
  • Roth IRA
  • Traditional to Roth Conversions
  • Undoing a Conversion

Note: The is one of a series of articles explaining how the various tax changes made by the GOP’s Tax Cuts & Jobs Act (referred to as the “Act” in the article), passed late in December 2017, might affect you and your family in 2018 and future years, and offering strategies you might employ to reduce your tax liability under the new tax laws Read more

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3 Tips to Getting Retirement Right in Your 20s

Article by Walter Updegrave | Found on CNN

I’m in my 20s and would like to start taking steps to ensure a secure retirement and financial future. But like many people in my generation I’m confused about where to start, who to contact and what to do. Can you point me in the right direction? –S.V.

I’m not surprised that you’re confused. Now that your generation has become a prime target audience for the financial industry’s products and services, hardly a day goes by that one study or another doesn’t purport to offer insights into what Millennials are doing, should be doing or shouldn’t be doing about their finances. Read more

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5 Things Millennials Need to Know About Retirement

Article by Wendy Connick | Found on CNN

If you’re a Millennial, you’re in a great position to give yourself a fabulous retirement. You have plenty of time to save, which will means compound interest can be a powerful wealth-building tool for you.

And if you’re like most members of your generation, you’ve already started putting money aside for retirement: The Transamerica Center for Retirement Studies reports that 72% of millennial workers have already begun saving, with a median starting age of 22. Read more

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Here’s How Boomer Women Are Thriving In Retirement

Article by Kerry Hannon | Found on Forbes

Should I stay or should I go? It’s a conundrum for many boomer women. You’ve spent your adult life building a long and fulfilling career, but the time gradually arrives when your friends start retiring and your financial planner begins that probing discussion about how you visualize your lifestyle in your 60s, 70s and beyond.

To plenty of female boomer professionals — who spent their careers breaking through barriers to achieve success and independence — retirement is practically an anathema. Read more

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The Hot New ‘Retirement’ Plan for Baby Boomers: Starting a Business

Article by Leigh Buchanan | Found on INC.COM

Characterizing a Boomer business as a retirement hobby is as misleading as saying all 20-somethings launch app companies. Still, startups by people over age 50 tend to skew small. Gallup reports that 80 percent are lifestyle businesses meant to supplement retirement income and keep the mind engaged. Read more

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5 Steps to Retire Debt-Free

Article by by Maurie Backman | Found on

America is a nation of borrowers, and while racking up debt can be dangerous at any age, it’s especially hazardous for those heading into retirement.

Because most seniors are behind on savings to begin with, carrying debt into retirement will only strain their already limited budget. Yet a growing number of households are kicking off their golden years with piles of debt — in fact, 20% of borrowers actually expect to die in debt. Read more

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Social Security Can’t Finance Your Retirement, Boomers — Take Action Now

Article by John Mauldin | Article Featured on Forbes

By 2035, the number of Americans 65 and older will climb from about 48 million today to over 79 million. That’s the Baby Boomer impact. There are now 2.8 active workers for each Social Security beneficiary. This number will likely drop to fewer than 2 workers per beneficiary by 2035.

Given the data from the Social Security Administration I reviewed earlier, most Baby Boomers will be down to subsistence living by the time they are 80—living on Social Security and other government benefits with help from any capable children. Read more

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What Role Should Your House Have in Retirement Planning?

Article by Ilana Polyak | Featured on Journal of Accountancy

Home is where the heart is. And it can also be where the assets are. As of 2011, home equity made up about three-quarters of the average American’s net worth, according to the U.S. Census Bureau. Despite this high figure, the home doesn’t always factor into retirement planning calculations.

For clients with ample assets, home equity is a less pressing issue. In that case, there’s no reason to “concern yourself with the house,” said David Imhoff, CPA/PFS, owner of Cornerstone Wealth Advisors LLC in Overland Park, Kan., because “we look at the house as the asset of last resort.”

But retirees of more modest means may need every possible option, including home equity. “It’s really surprising that more people don’t pay attention to it,” said Geoff Sanzenbacher, Ph.D., research economist at the Center for Retirement Research at Boston College. “The house can be a potential source of wealth.” Read more