As we step into 2024, retirees and those nearing retirement must understand the latest changes in retirement account contributions announced by the Internal Revenue Service (IRS). These changes are set to significantly influence retirement savings strategies, particularly for 401(k) plans and Individual Retirement Accounts (IRAs). Increased Contribution Limits for 401(k) Plans One of the most … Read more
Maintaining a consistent savings routine throughout your career will ensure financial stability in your later years. If your employer doesn’t offer a 401(k) plan for retirement savings, you can turn to an Individual Retirement Account (IRA) as an alternative. Chances are, you might already have an IRA, ideally with a substantial balance. Regardless of whether … Read more
The task of saving for retirement can be a daunting one, especially when faced with mounting financial responsibilities. A recent report from Vanguard reveals that the median 401(k) balance among its participants is a mere $27,376, far from the recommended $1.8 million needed to retire comfortably, according to Charles Schwab. However, there is a simple … Read more
Achieving the milestone of maxing out your 401(k) contributions is often seen as a pinnacle of retirement planning. For 2024, this means contributing $22,500 or $30,000 for those over 50. While this can lead to a significant nest egg, it’s crucial to understand that maxing out your 401(k) is only sometimes the optimal strategy for … Read more
Many Americans lack access to employer-sponsored retirement plans, such as 401(k)s. In such cases, individuals can turn to Individual Retirement Accounts (IRAs) as an alternative method to save for retirement. While IRAs have lower contribution limits compared to 401(k) plans, they still serve as valuable tools for building a retirement nest egg. One of the … Read more
As retirees, consider converting your 401(k) into a Roth IRA, especially if you have a substantial amount like $500,000. It’s crucial to understand that while Roth IRA conversions are brilliant for many, they come with tax implications. Unlike a traditional 401(k) or IRA, where taxes are deferred until withdrawal, converting to a Roth IRA requires … Read more
There’s been a significant shift in how retirees envision funding their golden years in recent years. According to a 2024 study by Schwab, many workers rely on their 401(k) workplace savings plans as their primary retirement income source. This trend is noteworthy: in 2024, approximately 37% of workers expected their retirement income to come primarily … Read more
Withdrawing money from your traditional Individual Retirement Account (IRA) before the age of 59½ often comes with a penalty. Taxpayers will be assessed a 10% penalty, along with income tax in most cases, on early withdrawals. However, there are certain exceptions that allow individuals to take money out of their IRA early without paying the … Read more