Category: Retirement Planning

A carefully updated will can lay out exactly who should inherit a family’s money, and for a retirement account it may not matter at all. Individual retirement accounts, 401(k) plans, and similar tax-advantaged savings pass to whoever is written on the account’s beneficiary form, not to whoever is named in the will. That form is…

Tapping a 401(k) before retirement age carries a cost that catches many workers off guard, because the bill arrives in two layers rather than one. The withdrawal counts as ordinary income, taxed at the saver’s regular rate like any other paycheck. Layered on top, money taken out before age 59½ generally triggers an extra 10…

Shifting retirement money from one IRA to another sounds like simple housekeeping, yet one misstep can turn a routine transfer into a fully taxable event. The hazard hides in a rule that limits how often a saver may personally take possession of IRA money and put it back: just once in any 12-month period, counted…

A traditional retirement account comes with a deadline its owner never gets to set. Once the account holder reaches a certain age, the government requires money to start leaving the account every year, taxable on the way out, whether or not the retiree actually needs the cash. A Roth IRA carries no such requirement while…

A traditional pension promises a fixed check every month for the rest of a retiree’s life, but that promise is only as sound as the plan standing behind it. When a private-sector pension plan runs out of money and the company that sponsored it cannot make it whole, a federal insurer steps in and keeps…

Early retirement often opens a quiet window when income falls but tax rates have not yet caught up with it. A worker who has stopped drawing a salary, has not yet turned on Social Security, and is still years from mandatory retirement-account withdrawals may briefly sit in one of the lowest tax brackets of their…

Retirement saving is usually tethered to a paycheck. The tax rules that reward setting money aside generally require the saver to have earned income of their own, which leaves a stay-at-home spouse looking locked out. Someone who stepped away from the workforce to raise children or care for an aging parent can spend years without…

For years, retirement savings in a traditional IRA or 401(k) grow without a tax bill. That grace period ends at a specific age, when the government requires account owners to start pulling money out and paying tax on it. The rule is called a required minimum distribution, and the trigger age has moved in recent…

Decades of job changes leave a trail of retirement accounts scattered across former employers. A 401(k) left in place after a departure does not disappear, but it can slip out of sight and out of mind — and money that is forgotten tends to be money that stops growing the way it should. Balances parked…

Changing jobs or retiring usually means deciding what to do with an old 401(k). One choice looks the simplest: have the plan cut a check and sort it out later. That single decision can strip 20% off the balance the moment the check is issued, and it can turn a routine move into a taxable…