Five ways to improve retirement math when you haven’t saved


A large segment of American workers are approaching retirement with very little or nothing saved: Among workers age 55 or higher and nearing retirement, 48 percent have saved less than $100,000, according to the Employee Benefit Research Institute. A third have less than $25,000. The savings shortfall means many Americans face the prospect of retiring […]

New tools for tax-efficient retirement draw-downs coming into view


Control the things you can control. We’ve all heard the mantra when it comes to personal financial planning, and it usually refers to the accumulation side of a retirement plan—factors such as investment cost, contribution amounts and timing. But a growing body of research points to an under-utilized point of control on the decumulation side […]

How your tax burden lightens when you retire


Tax day is April 18th this year, and it will be an unpleasant day for millions of American working households. But cheer up: your tax situation likely will lighten up a bit when you retire. The Internal Revenue Service takes it easy when it comes to taxation of Social Security, and many retirees drop into […]

The ins and outs of Social Security benefits and taxes


It’s an unpleasant fact of life: The taxman can take a bite out of your Social Security benefits. The federal tax formula was crafted to initially target higher-income households, but the share of benefits taxed has risen over the years, because the income thresholds for taxation aren’t indexed for inflation or real income growth. Meanwhile, […]

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How the little-known Saver’s Credit could work better for low-income workers


It sounds too good to be true: some workers can get a double tax benefit by saving for retirement. But the federal Saver’s Credit does just that by providing a second layer of tax incentives for lower-income households beyond the benefit of tax deferral that everyone receives for contributing to a 401(k) or IRA. The […]

IRA charitable donations are permanent: Here’s what it means for retirement planning


There won’t be any doubt about it this year – charitably-minded retirees will be able to make donations from their Individual Retirement Accounts. Really. For sure. Congress permitted donations direct from IRAs under the Pension Protection Act of 2006, but it’s been a rollercoaster ever since. The Qualified Charitable Distribution (QCD) would sunset every couple […]

A tax day question: Why do states leave billions in retiree income on the table?


Illinois is the national poster child for state budget messes. My home state faces a $7.4 billion general fund deficit and a $12 billion revenue shortfall. One proposed idea for plugging at least part of the horrific shortfall: tax retirement income. But our new governor, Republican Bruce Rauner, has rejected the idea. Illinois exempts all […]

Charitable IRA makes a last-minute comeback for 2014


Gotta love the way we make tax policy these days. Congress finally okayed charitable IRA transfers for 2014 (!) this week. This provision – which bounces in and out of existence like a yo-yo – allows IRA account owners who need to take Required Minimum Distributions (RMDs) to make direct contributions to charitable organizations, and […]

Why the IRS wants you to be careful with those IRA rollovers


Memo from the Internal Revenue Service to retirement investors: Be careful with those individual retirement account rollovers. That’s the gist of a recent IRS ruling that puts new restrictions on the number of “indirect rollovers” from one IRA to another you can do annually. The ruling comes on the heels of a federal court decision […]

Time to raise – or scrap – the Social Security payroll tax cap


It’s Tax Day, and a small number of wealthy Americans will have something to celebrate: They’ll be done paying Social Security taxes for the year. The payroll tax that funds Social Security is levied only on a certain amount of income. This year it’s capped at $117,000. That means most wage earners will pay 6.2 […]