Archives for Tax Planning

Personal Finance: The Importance of Starting Early

Personal Finance: The Importance of Starting Early

July 22, 2024

Whether you’re just starting out in your career, you are a Gen-X-er sandwiched between your kids’ college expenses and aging parents’ needs, or you are a Baby Boomer eyeing retirement, starting early can help when it comes to your finances. Here are some reasons why. When You’re Young—In Your 20s We’ve all heard the famous quote by Albert Einstein, the one where he said, “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” And it’s true. In many cases, if you start out early—perhaps in your teens or 20s—saving
Read More

7 Strategies to Reduce Taxes

7 Strategies to Reduce Taxes

April 24, 2023

No matter which phase of life you’re in, you might be looking for ways to trim your tax bill. Here are some strategies to consider! Nothing is certain but death and taxes. Perhaps a phrase most known for being spoken by Benjamin Franklin, the old adage seems to have held up over the course of centuries as a constant, dogmatic idea that sticks with investors and consumers. Nevertheless, each year around tax time, most of us wonder how we can pay less in income taxes, and the answer to that question is always, “It depends.” Each person’s situation is completely
Read More

6 Facts About Taxes

6 Facts About Taxes

March 1, 2022

Individual income tax returns for 2021 will be due April 18th, 2022. In preparation as we head into the tax season, here are some facts to consider.   Where your tax dollars go. In 2021, the federal government spent $6.82 trillion, which equals 30% of the nation’s gross domestic product. Three significant areas of spending make up the majority of the budget. Medicare accounted for $696.5 billion, or 10%. Defense spending made up $754.8 billion, or 11% of the budget, was paid for defense and security-related international activities. Seventeen percent of the budget, or $1.1 trillion, was paid for Social
Read More

Your 2022 Financial To-Do List

Your 2022 Financial To-Do List

January 25, 2022

Things you can do for your financial future as the year unfolds. What financial, business, or life priorities do you need to address for the coming year? Now is an excellent time to think about the investing, saving, or budgeting methods you could employ toward specific objectives, from building your retirement fund to managing your taxes. You have plenty of choices. Here are a few ideas to consider:    Can you contribute more to your retirement plans this year? In 2022, the contribution limit for your own Roth or traditional individual retirement account (IRA) is $6,000 ($7,000 for those age
Read More

Your Year-End Financial Checklist

Your Year-End Financial Checklist

December 28, 2021

  The end of the year can help remind us of last-minute things we need to address as well as the goals we want to pursue and get serious about. To that end, here are some aspects of your financial life to contemplate as this year leads into 2022.  Your investments. Set up a meeting to review your investments with your financial professional. You’ll want to come away from the meeting with an understanding of your portfolio positions and a revisit of your asset allocation based on your age, desires and personal circumstances. Remember, asset allocation and diversification are approaches
Read More

RMDs Are Back for 2021

RMDs Are Back for 2021

April 27, 2021

  RMDs, or Required Minimum Distributions, are withdrawals that are required by the IRS each year out of your traditional retirement accounts like 401(k)s and IRAs starting at age 72. The money that you have to take out annually by December 31st at midnight is taxed based on your income tax rate for that tax year.   Some retirees forget about RMDs when planning for retirement, and don’t realize how big the tax bite may be for them. This year, because of the pandemic, the CARES Act suspended the RMD for the 2020 tax year in an effort to help
Read More

What is a Roth Conversion?

What is a Roth Conversion?

September 25, 2020

To understand what a Roth conversion is, you must first understand some of the basics about the different types of retirement accounts, called “qualified accounts.” Pensions Also called defined-benefit plans, pensions are paid for by employers. They have largely gone away for Americans in the private sector starting with the passage of three laws during the Reagan administration, the Tax Equity and Fiscal Responsibility Act passed in 1982, The Retirement Equity Act of 1984, and The Tax Reform Act and Single Employer Pension Plan enacted in 1986. The lack of pensions is one reason why it’s important for people to
Read More

How Rich Do You Have to Be in Order to Retire?

How Rich Do You Have to Be in Order to Retire?

August 18, 2020

Even though perceptions have changed during the pandemic with more Americans now saying they need less money to feel rich1, when it comes to retirement, most people are still unclear about how much they will need to have saved before they can quit their jobs. The answer to that question is different for every person. Here are some of the things you need to think about in order to get a realistic retirement number in mind.   What do you want to do during retirement? Where will you live? Different people have different retirement goals and visions. You may not
Read More

5 Things You Need to Know About the SECURE Act

5 Things You Need to Know About the SECURE Act

January 22, 2020

  The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE) became effective Jan. 1, 2020, and many people have questions about it. Here are the top five things consumers should know.   72 is the new 70½ The SECURE Act raises the age at which retirees must begin taking Required Minimum Distributions from the awkward age of 70-1/2 to an even age 72, allowing for a couple more years of growth before RMDs kick in. NOTE: Anyone who reached age 70-1/2 in 2019 or before is subject to the old rules.   You can keep making contributions to
Read More

Congress Looks to Provide More Options for Retirement Savers

Congress Looks to Provide More Options for Retirement Savers

July 22, 2019

While changes to traditional IRAs, RMDs offer some benefits, there are tradeoffs.   Broad proposals are in the works in the retirement savings arena to ease rules on tax-deferred savings vehicles, make it easier for employers to offer 401(k)-type savings plans and also convert balances into annuities for lifetime income. In late May, the House of Representatives overwhelmingly passed the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE). Key provisions within the SECURE Act offer more flexibility for when distributions would have to be taken out of tax-deferred accounts. On the flip side, the Act takes direct
Read More