FINANCIaL
FIELd NOTES
Roth Conversion Ladder Strategy
Roth conversions are the process of transferring money from tax-deferred accounts, such as 401ks or IRAs, to tax-free accounts like Roth 401ks or Roth IRAs.
When you move money from one account to the other, you generally pay taxes on the full amount converted. The money then grows tax-free from there on out.
One strategy to consider is to implement small Roth conversions, a little at a time, over multiple years…
7 Strategies For Lowering Investment Taxes
A friend of mine was recently complaining to me about a tax bill coming their way from the sale of investments. I joked that I would gladly pay his tax bill if he gave me his investment gains…he declined.
Taxes are an inevitable part of investing but generally, it is a good problem to have since it means you made money. However, there are several strategies to consider to make sure you don’t pay more than your fair share to Uncle Sam.
How Flexibility Can Give You $10,000/year In Retirement
The 4% rule by Jonathan Guyton is one of the most widely cited strategies for preserving wealth over a full retirement. It states that historically a balanced portfolio could have kept a 4% withdrawal rate, adjusted for inflation each year, throughout a 65-year-old’s hypothetical 30-year retirement.
However, it fails to account for a retiree’s ability to lower withdrawals during bad market environments…
Roth Conversions When The Market Is Down
When I evaluate Roth conversion plans, I typically wait until the end of the year to complete the conversions so I can ensure that income actually ended up being what was projected.
However, if there is volatility in the stock market, it can be a great benefit to convert while the market is down…
Mixing Investing With Entertainment Is A Bad Idea
I worry that the young adults who are dipping their toes into the investing world for the first time this year will associate investing with a gambling sort of rush.
But I also can understand where they’re coming from. It is exciting to see small investors make out like bandits in companies like GameStop, AMC, and others. But take caution – this has ended badly before…
Why Average Life Expectancy Is Deceptive
When I start working on a financial plan, I sometimes joke “And when would you like to die?” It’s a bad joke that rarely gets a sympathy laugh.
But when we’re planning for a lifetime, we have to make an educated guess on when that life might end. I often get pushback when I suggest as late as age 90 or 95. But average life expectancy can be deceiving…