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 to
Read More

If you’re still working and contributing to a 401(k) or similar workplace retirement plan, there is some good news for the upcoming year. If you’re under age 50, the amount you can contribute to your 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is now $19,500 for 2020—a $500 increase over 2019. Additionally, for those who are age 50 or over by December 31, 2020, the catch-up amount is now $6,500, up by $500 (and the first increase since 2015). Keep in mind that you can still put away an additional $6,000 in an IRA—$7,000 for
Read More

Inflation may not always be top of mind when you think about planning for retirement. Of course, you will likely consider your current expenses, but you need to account for what the costs of those expenses could be over time. None of us can predict the future, but we can plan. Inflation diminishes purchasing power over the years and increases the costs of services that retirees and pre-retirees need. Given that more Americans are living longer, it can pay dividends to include inflation risk in your overall planning. The other issue we have to contend with when it comes to
Read More

It can provide many gifts as part of a comprehensive retirement plan. The Individual Retirement Account (IRA) turned 45 on Labor Day. On September 2, 1974, the Employee Retirement Income Security Act, or ERISA, was enacted into law, introducing broad safeguards to protect employee savings in both defined benefit plans like pensions and defined contribution plans. The intent of Congress in initially establishing IRAs was to provide a tax-advantaged retirement savings plan for those workers at businesses that weren’t able to offer pensions. The IRA also made it possible to preserve the tax-deferred status of qualified plan assets when an
Read More

Cuts in pensions, death of spouse could lead to a wobbly three-legged income stool. Imagine receiving a letter in the mail informing you that your monthly pension benefits were at risk of being cut by 40%. Would you have enough income to keep up with your expenses? What about maintaining the quality of your lifestyle? Questions like these place the importance of retirement income analysis at the front and center of being prepared for the unexpected. The three-legged stool metaphor of retirement planning, in which Social Security, employer pension and savings work together to provide secure income has evolved over
Read More

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 aim
Read More

Traditional thinking tends to suggest that those planning for retirement will have to replace less of their current income. Working Americans say they need to replace 67% of their current income for retirement, but only 32% say they’re on course to achieve this goal, according to a study by Transamerica Center for Retirement Studies and Aegon Center for Longevity and Retirement released May 20. In addition, only 21% responded that they are “very confident” they will be able to retire with a lifestyle they consider to be comfortable, while 35% expressed that they were “somewhat confident.” Some retirement specialists disagree
Read More

Are you taking advantage of lower fees? Investors paid less in 2018 to own open-ended mutual funds and exchange-traded funds (ETFs) than ever before, according to recently released research from Morningstar. The Chicago-based provider of independent investment research’s annual fee study found that the asset-weighted average expense ratio was 0.48% in 2018, a 6% decline from the previous year. “This is the second-largest year-over-year percentage decline we have recorded since we began tracking the trend in asset-weighted average fees in 2000,” Morningstar’s Adam McCullough said. The bottom line is that investors saved an estimated $5.5 billion in fund expenses compared
Read More

If you invested in domestic stock funds during the first quarter tied to one of the main U.S. indexes, well done. With price gains of 13.07%, the Standard & Poor’s 500 index had its best first quarter performance since the first quarter of 1998. Other key indexes like the Dow Jones Industrial Average and the Nasdaq climbed 11.15% and 16.49%, respectively. U.S. government notes and bonds also performed relatively well, bucking the trend of when stocks do well, bonds generally don’t follow, and vice versa. The DFA Global Allocation 60/40 Portfolio, a mutual fund which attempts to closely replicate a
Read More

And while time is running out, you can still contribute to an IRA for 2018. Recent data from the Internal Revenue Service (IRS) indicates that the average refund this year is trending downward by as much as 17.0%. Trends, like just about everything, can always change, and it’s still early days for the IRS’ return data since the figure here was last updated before the final week of February. But with March already well underway, time is running out for the April 15 deadline to file your federal returns. One of the deductions you can still take advantage of is
Read More