FINANCIaL
FIELd NOTES
Making Sense of Medicare, Part 1 – The 5 Pieces
Medicare is a confusing topic to navigate, in part because there are so many choices. In the first part of this series, I will discuss the various parts of Medicare. Next week I will discuss the cost of putting these pieces together.
There are 5 pieces to Medicare…
Being Greedy When Others Are Fearful Is Hard
You have likely heard the saying “Be greedy when others are fearful, and fearful when others are greedy.” It sounds simple in theory – be a buyer when stocks are cheap and a seller when they are expensive.
But why is that so hard?
How to Pay 0% Capital Gains Tax
When you sell an investment for a gain outside of a retirement account, you typically pay “capital gains tax.” For example, if you bought an index fund for $10,000 and sold it for $15,000, you would have to report the $5,000 gain as income on your tax return.
There are only 3 main federal tax brackets for capital gains. You are either taxed at 20%, 15%, or even 0%…
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…