General information about the type of retirement accounts whether it is employer-sponsored or not. Catch up with the contributions limits to see how much you’re able to save for your future.
If you’re facing a hefty federal income tax bill, you might be wondering: Can I use my 401(k) to pay my taxes? The short answer is yes, but it’s complicated. While you can withdraw funds from your 401(k) retirement account to cover your tax obligation, you need to be aware of the tax penalties, potential … Read more
A Safe Harbor 401(k) is a type of retirement savings plan designed to simplify compliance with IRS nondiscrimination rules while offering significant benefits to both employers and employees. Unlike traditional 401(k) plans, a Safe Harbor plan requires employers to make mandatory contributions to employees’ accounts, which are immediately vested. This eliminates the need for time-consuming … Read more
Changing the code on an IRA distribution is a crucial process that can significantly impact your tax obligations and reporting requirements. The IRS uses specific distribution codes on Form 1099-R to indicate the type of distribution made from an Individual Retirement Account (IRA), which helps determine whether the distribution is taxable and if any penalties … Read more
The Backdoor Roth IRA Pro Rata Rule is a critical concept for high-income earners who use the backdoor Roth IRA strategy to bypass income limits on Roth IRA contributions. While the backdoor Roth IRA offers a legal and effective way to enjoy tax-free growth and withdrawals in retirement, the Pro Rata Rule ensures that individuals … Read more
The state of Tennessee has a very favorable tax climate for retirees. Unlike most other states, it does not have an individual state income tax, and all forms of retirement income are untaxed at the state level (including Social Security benefits). Additionally, property taxes in the Volunteer State are relatively low. The only catch is … Read more
Roth IRA Contribution Limits are determined by your earned income. The contribution limit is lower for individuals with higher incomes. To qualify for a Roth IRA, your modified adjusted gross income must be less than or equal to $133,000 for single filers or $73,000 for married couples filing jointly. If your MAGI is above this … Read more
Annuities offer tax-deferred growth and guaranteed retirement income. However, they are not for everyone. They are long-term products and should be considered only after investors have maxed out their 401(k) and IRA contributions. The best income annuities provide a steady stream of income for life and can be tailored to suit your specific needs. Unlike … Read more
While age may be just a number, it plays an important role in Social Security benefits. Social Security’s full retirement age (FRA)—the age at which a retiree is guaranteed to receive their full primary insurance amount (PIA) for life—varies by year of birth and is currently 66 years and two months for people born in … Read more
The Pension Benefit Guaranty Corporation (PBGC) is a federal agency established by the Employee Retirement Income Security Act (ERISA) of 1974. The primary purpose of the PBGC is to safeguard the retirement incomes of participants in defined-benefit pension plans. A defined benefit plan is a type of pension plan in which an employer promises to … Read more
A life expectancy calculator is a tool that helps you estimate your expected lifespan. It uses complex algorithms to make predictions based on scientific data and research. However, it’s not a crystal ball and should only be used as a guideline. The basic idea behind a life expectancy calculation is to predict the probability of … Read more