After you turn 70½, you must prepare for required minimum distributions from your individual retirement accounts and 401(k) plans. If you don’t take your so-called RMD in time, you’ll face a penalty of 50% of what you were supposed to withdraw. Got an RMD for 2019? You have less than four weeks to get it…
Month: December 2019
Retirement plan limits for 2019-2020
401(k) contributions The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the Thrift Savings Plan used by federal government employees increased in 2019 to $19,000 (and those limits will be going up another $500 in 2020). If you’re 50 or older, you also can take advantage of a catch-up…
Understanding Medicare and Social Security
A great resource for understanding the basics of Social Security and Medicare Writing for USNWR, Rachel Hartman explains: How Social Security and Medicare Work Together “Social Security and Medicare are social safety programs that Americans pay into during their working years through taxes. Both are designed to assist older Americans and distribute benefits to the…
How did you pick the funds in your retirement account? ABC…
A paper published in the Financial Review concluded that when selecting funds within their 401(k) plans, many people choose the options at or near the top of alphabetical lists. “It’s absolutely amazing how powerful this effect is and how much it is really distorting what’s being invested in,” said paper co-author Jesse Itzkowitz. As reported…
Managing Sequence of Returns Risk in Retirement & avoid scams with income annuities
What IS “sequence of returns risk”?Sequence risk, or sequence of returns risk, is the risk that the stock market crashes early in your retirement. Long-term average returns matter less than when those returns occur. If your portfolio drops dramatically in value early in retirement you end up selling low without the ability to gain by…
Social Security changes for 2020
Benefits are increasing 2.8% (but Medicare premiums are going up, too). Maximum monthly benefit at full retirement age will increase by $150 a month to $3,011. The full retirement age will increase by two months to 66 years and eight months for persons born in 1958. Anyone born in 1960 and later has a full…