As the COVID-19 pandemic continues, the IRS has developed procedures for individuals to take early distributions from their retirement plans under Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The rules to qualify for these disbursements are fairly generous. For more details and to see if you qualify, read this article from The Tax Adviser. Early distributions from retirement plans related to COVID-19
Category: Retirement
Living Off Your 401K?
Recently unemployed? Considering dipping into your 401K to stay afloat? Here are some options to consider. Fees are waived for withdrawals made from 401K accounts. Taxes must be paid but can be spread over three years. These are some of the most lenient restrictions ever imposed. Even if you decide not take money out of your account, you may want to consider moving your 401K into an IRA. Mark Miller for the New York Times in his article, Lost Your Job but Still Have a 401(k)? Here’s What to Do With It, offers advice and tips on best managing your retirement funds and money for daily living during this turbulent time.
Retirement?
As clients approach the presumed age of retirement, some are beginning to question this expectation. In her article, Why retire? 10 reasons clients should keep working, Ann Marsh for financialplanning.com offers ten valid reasons why you might want to continue working, drawn from money management professionals. One sites this article as well, Voices The worst retirement advice I ever gave. What will you do when the time comes?
Retirement Ready?
Does the thought of retirement make you nervous or are you still in the stage where you’re throwing out all the mail you get from AARP? Peter Finch for the New York Times offers a detailed, five-year plan to help you prepare. Finch explores the process by breaking each year down into easy steps, ranging from calculating self-worth/future needs, to recognizing health insurance options, investigating reverse mortgages, and considering long term care.
Countdown to Retirement: A Five-Year Plan
Grandparent’s Gift
Are you interested in saving money for your grandchildren? David LaMartina for ThinkAdvisor examines this subject in his article, Investing for Grandchildren (There are a few well-established ways advisors can help clients invest in their grandkids futures without putting client’s own retirements at risk.) In this article, he examines best practices for maintaining your own retirement and savings while setting aside specific funds for grandchildren in a variety of ways. Everything from 529 plans to inventive uses of life insurance polices.
The New Pension Plan
With such a variety of retirement plans, many current workers will not have an actual pension. Ann Carrns, for the New York Times suggests a variety of ways to make your savings work for you in her article, No Pension? You Can ‘Pensionize’ Your Savings.
Her top recommendations include working longer, delaying Social Security payments, and, creating a budget for the amounts that you are required to withdraw from your retirement accounts.
Married or Single?
The statistics show that many more older men are married than older women. Although there is the fact of womens vs. mens longevity, but Paula Span for the New York Times felt this could not be the only reason. What she found was that women, both widowed and divorced were better able to navigate the single life. With already supportive groups of friends, events, book clubs and volunteer jobs, women’s networks helped them blossom. Read more about her fascinating and somewhat familiar findings here, The Gray Gender Gap: Older Women Are Likelier to Go It Alone.
Long Term Care, Worth It Or Not?
Long term care insurance is quickly losing its shine. In the 1990s these policies were sold in large numbers and seen as the best way to preserve your style of living as you aged. Since that time, premium rate increases due to high claim volumes and low lapse rates have made the plans much less affordable. Darla Mercado for CNBC examines when these policies may be right for you and what other ways you can plan for unexpected care needs in Less is more: The dilemma over long term care insurance.
Grandparents Help With College
As college expenses continue to increase, grandparents are beginning to step-in and offer assistance to their grandchildren. John F. Wasik, for the New York Times offers sound advice for those wishing to help with their grandchildren’s college expenses. The Best Way to Help a Grandchild With College. There are many aspects to be considered in order to maximize your monetary support of a student, such as when the money is applied or whose name appears on the account. Read the full article to learn more about the amazing gift of higher-education that you can share with your grandchildren.
Are You Paying Your Broker’s Retirement?
No one appreciates a hidden fee, but do you know exactly where your invested money is going and the amount of fees you are paying your broker? President Obama is currently pushing for new rules in the finance industry that would help put investors interests first. Of course, even the financiers need to make a living and have money for retirement, but just how skewed is their take versus your returns? Might be a good question to ask next time you’re in their office.