retirement: Thinking of Pulling Money Out of a Retirement Account?
- 08/12/19 10:15 AM
Clients often ask about whether it makes sense to pull money out of a retirement account to purchase a home or pay for large expenses. Here’s the inside scoop: Note: visit the IRS web site for info on any of these items and check with a CPA for details about how these general rules apply in your specific situation. Conventional IRA When you take money out of a conventional IRA, you’ll generally need to pay income taxes on the funds. For example, assume you want to withdraw $50,000 out of your conventional IRA and your income tax bracket is 22%. You would be … (1 comments)
retirement: The Rules of 25 and 72
- 01/28/19 08:31 AM
Here are two easy-to-remember formulas that can be very useful as you budget for retirement:
The Rule of 25 – How much “critical capital” do I need? According to this formula, if you multiply the annual income you need by 25, that’s approx. how much money you need to save in order to retire. This would allow you to live off your retirement assets without dipping into principal. This assumes your after-tax rate of return during retirement is 4%. For example, if I want to generate $60,000 per year in after-tax retirement income, I would need to save a … (3 comments)
retirement: 3 Questions to Ask Yourself for a Happier Retirement
- 09/17/18 09:11 AM
#1: What does retirement mean to me? Many people think of retirement as a time in your life where you can work if you want to, but not because you have to. In other words, how would you feel if you could work for fun and/or pursue your passions without worrying about money? This requires financial independence, or having enough money to: Cover your needs and basic wants After taxes After inflation For some period of time (usually you and your beloved's lifetime) The amount of money necessary for financial independence is called "Critical Capital". This is a pile of … (2 comments)
retirement: Timing is Everything… Especially During Retirement
- 04/16/18 06:17 AM
A lot of discussion about “sequencing of distributions” has been taking place recently in financial planning circles. “Sequencing of Distributions” looks at the order in which you take distributions from your retirement account. This matters because the order in which you take distributions has a very significant impact on how long your retirement assets will last. Consider the two examples illustrated in the chart. Column 1 has the same amount of distributions scheduled for the next five years, regardless of how the market performs. Column 2 changes the distributions in years 2, 3 and 4, based on the performance of the market.
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