Viewing posts categorised under: Retirement Planning
30May
A “back door” Roth IRA can benefit higher-income taxpayers
Retirement Planning

 

A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income.

Unfortunately, your employer might not offer a Roth 401(k) or another Roth option, and modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your ability to contribute to a Roth IRA. Fortunately, there is a solution: the “back door” Roth IRA.

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23Feb
SEPs: A powerful retroactive tax planning tool
Business Ownership

 

Simplified Employee Pensions (SEPs) are sometimes regarded as the “no-brainer” first choice for high-income small-business owners who don’t currently have tax-advantaged retirement plans set up for themselves. Why? Unlike other types of retirement plans, a SEP is easy to establish and a powerful retroactive tax planning tool: The deadline for setting up a SEP is favorable and contribution limits are generous.

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29Dec
Workers age 50 and up: Boost retirement savings before year end with catch-up contributions
Retirement Planning

Whether you didn’t save as much for retirement as you would have wished earlier in your career or you’d simply like to make the most of tax-advantaged savings opportunities, if you’ll be age 50 or older on December 31, consider making “catch-up” contributions to your employer-sponsored retirement plan by that date. These are additional contributions beyond the regular annual limits that can be made to certain retirement accounts.

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09Nov
Using Roth IRAs to Help Your Kids Save
Personal Finance

Franklin eyes and coin ridgesRoth IRAs (Individual Retirement Accounts) turned eighteen years old this year. Established in 1998 by Public Law 105-34, the Roth IRA differs from a traditional individual retirement account in two crucial ways. First, funds invested in a Roth IRA are not tax deductible from current income; any money invested comes in the form of after-tax dollars. However, these investments will grow tax free once in the Roth IRA, and can be withdrawn tax-free after age 59 ½ (if the Roth IRA has been owned for more than five years).

While many taxpayers think of Roth IRAs (and IRAs in general) as accounts for adults, Roth IRAs for minors can be startlingly lucrative, and are generally underutilized. Not only does saving in an IRA help to teach kids valuable saving habits, but decades of compounded returns may be one of the best gifts parents can ever give their children.

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12Oct
3 mutual fund tax hazards to watch out for
Personal Finance

 

Investing in mutual funds is an easy way to diversify a portfolio, which is one reason why they’re commonly found in retirement plans such as IRAs and 401(k)s. But if you hold such funds in taxable accounts, or are considering such investments, beware of these three tax hazards:

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28Jul
Business owners: Put your successor to work before you set sail
Business Ownership

 

A hastily chosen or ill-prepared successor can lead a company astray or, in worst cases, mismanage it into bankruptcy. Before you set sail into retirement or perhaps on to your next great professional adventure, make absolutely sure that your chosen replacement is ready to, well, succeed.

Build stakeholder confidence

Perhaps the simplest, most important thing you can do is to put your successor to work. Co-owners, board members and employees are more apt to follow a replacement’s lead if they feel confident in his or her knowledge and skills. And the only way to truly build that confidence is to allow these stakeholders to experience your successor’s leadership style and capabilities first-hand.

For instance, let your successor gain experience examining and discussing financial information for tax and financial reporting compliance and profitability analysis. In addition, allow him or her to spend time among your HR staff to learn about your hiring methods and benefits issues.

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11Jul
There Are No Scholarships for Retirement: Saving for Retirement vs. Saving for College
Retirement Planning

college graduation usfThere’s the proverbial question: Which came first, the chicken or the egg? Here’s another one for you: Which comes first in your saving priorities, saving for retirement or saving for your child’s college education?

In an ideal world, you could save healthy amounts for both. Helping your child achieve higher education is a savings priority for many parents, and college almost always comes sooner in life than retirement. However, the world is rarely perfect, and thus many parents must choose between whether or not they plan to squirrel away their hard-earned salaries for their golden years, or prepare to give their children the gift of education.

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02Mar
Planning for Long-Term Care with the Nebraska LTC Savings Plan
Retirement Planning

walking on a beach in the sunsetAccording to the Nebraska Department of Health & Human Services, 60 percent of Nebraskans aged 65 and older will eventually have long-term care needs, and may require assistance. There are certainly factors that affect who will need this long-term care.

For example, between the ages of 40 and 50, eight percent of people have disabilities that require long-term care services, and 69 percent of people aged 90 or more have a disability. If you have a chronic condition such as diabetes or high blood pressure, a family history of chronic conditions, or poor diet and exercise habits, it is important to plan for the range of services you may require to meet your personal care needs in the future. From bathing to dressing to using the toilet and even eating, long-term care is any support that helps you meet the needs of everyday life.

In an article about long-term care savings plans Shane Osborn, former Nebraska State Treasurer, shares several facts that are cause for thought about why long-term care should be top-of-mind, no matter your age:

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