Retirement

In our last piece, we covered the recent uptick in inflation, and what to make of it in a historical context. For investors, it’s important to take a step back and look at the big picture before acting on breaking news, but what if inflation does get out of hand, and stays that way for a while? 

When employees think about what it means to have enough money to retire, more than likely they are unsure how to translate their lifetime savings into income. For their entire working life, these employees receive regular paychecks; from this income, they generally construct a budget to cover their basic expenses.

Whether your Social Security benefits are taxable (and, if so, the amount that is taxed) depends on a number of issues. The following facts will help you understand the taxability of your Social Security benefits. 

What job does your 401(k) perform? Why do workers "hire" your 401(k)? Why does the "customer" sign up for your 401(k)? Remember, 70% of workers live paycheck to paycheck,¹ so why would they allocate precious take-home pay to your plan? 

Roth IRAs tend to get a lot of hype and for good reason. Because you pay the taxes up front, your eventual withdrawals (assuming you meet the age and holding-period requirements — more on these below) are completely tax-free.

Myth #1: Social Security will provide most of the income you need in retirement.

Fact: It's likely that Social Security will provide a smaller portion of retirement income than you expect.

By Jenny Anderson - March 12, 2019

On a blustery March day five years ago, I locked arms with my mother and walked into a church in Maplewood, New Jersey to bury my brother. Bagpipes played “Amazing Grace.” I remember shivering and worrying: that my dad would slip, my mom would collapse, and that I would botch the eulogy.

“Our new Constitution is now established, and has an appearance that promises permanency; but in this world, nothing can be said to be certain, except death and taxes.”

It’s a quote that comes to us from Benjamin Franklin, who uttered the phrase in 1789.

Health care costs will be the biggest expense for most retirees. It’s not a pleasant prospect, but it is a reality.

There are many different ways you can shelter your savings from taxes. It is a powerful incentive for us to save for retirement.

Options give us choices, but choices can confuse as options proliferate.