On a Break Until the 4th Quarter
Powering Your Retirement Radio
Exciting things are coming in the 4th Quarter of 2023. Until then, the show will be in hiatus as I build new tools to help you - my listener. Got questions or want to take one of my Summer webinars? Email
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How long should I keep my documents?
Powering Your Retirement Radio
Welcome to "Powering Your Retirement Radio"! Today, I want to address one of the most frequently asked questions about the documents you should keep hard copies of and for how long. It doesn't matter if it's your tax return or investment statements; fortunately, digital copies are acceptable for many of these documents now. But you may have a concern about what happens if the drive fails. Many people still have banker's boxes or a filing cabinet hiding somewhere. And if you are like many people, it is overdue to be cleaned out. I will go over Tax, Healthcare, Legal, Asset and Debt, and Other...
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Edward F. Sanders - Financial Strategist
Powering Your Retirement Radio
Welcome back to Powering Your Retirement Radio. I am Dan Leonard, your host. Today I am joined by Ed Sanders. Ed Sanders is a financial strategist with over 19 years of experience in the finance industry. Originally from Akron, Ohio, Ed attended the University of Arizona before moving to the Bay Area to work for Wells Fargo after graduation. In 2004, Ed made the decision to leave the corporate world behind and pursue his passion for helping people achieve financial freedom. As a financial strategist, Ed specializes in college planning, risk reduction, creating tax-free income sources, and...
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What to do on your worst day
Powering Your Retirement Radio
Hello, and welcome back to Powering Your Retirement Radio. Today's episode is not uplifting, but still worth a listen. We will all likely face this event once or twice in our lifetimes. Unfortunately, like most emotional and personal things, you learn by doing it and never really share it with anyone. So, here is an outline of things to consider when your spouse or a loved one passes away. 1 Notify Friends and Family, designate the family members who can help with some of the necessary tasks 2 Contact a funeral home, medical school crematorium according to the deceased wishes ...
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Treasury Bills and SVB
Powering Your Retirement Radio
Hello, and welcome back to Powering Your Retirement Radio. In today’s episode, I want to discuss the most often question I get these days: "Should I buy Treasury Bills?” I also want to discuss what happened with Silicon Valley Bank (SVB). It seems like several times each week. Someone calls to ask what I think about buying Treasury Bills. I first want to know why they want to buy them. Is it because they have extra money languishing in the bank, or do they want to move money from their current investments to something guaranteed? Either way, you can make a case for it, but you need to...
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Long Term Care Basics
Powering Your Retirement Radio
Welcome back to Powering Your Retirement Radio. I want to discuss Long Term Care or Extended Care. This is insurance and not an investment. Insurance, in the long run, is better to have and not need, than to need and not have. It is also better to buy it before there is a need because, at that point, it is either very expensive or not available. So why do you need Extended Care Insurance? You need it because of the unknowable circumstances around your future health, not just yours but, if you are married, your spouse as well. As counterintuitive as this sounds, Extended Care Insurance is...
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How to Save $1,000,000 in your 401K
Powering Your Retirement Radio
How can you save $1,000,000 in your 401k between the ages of 30 and 60? We'll cover strategies for maximizing your contributions, making smart investment decisions, and taking advantage of employer matching programs in this episode. Maximizing Contributions The first step in saving $1,000,000 in your 401k is to maximize your contributions. If you're 30 years old, you have 30 years to save, so the earlier you start, the more you can save. The contribution limit for a 401k is $19,000 in 2022, with an additional $6,500 catch-up contribution for those over 50. Consider increasing your contribution...
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Saving for Retirement
Powering Your Retirement Radio
How much should I save for Retirement Annually? The amount you should save for retirement annually depends on several factors, including your age, income, current savings, and retirement goals. Generally speaking, financial experts recommend saving 10-15% of your income each year for retirement. However, it's important to remember that this is just a guideline, and you should adjust your savings rate based on your own individual needs. How much do I need to save to be able to retire? The amount you need to save to be able to retire comfortably depends on several factors, including your...
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Long Term Perspective
Powering Your Retirement Radio
Welcome to Powering Your Retirement Radio. Having a long-term perspective when investing is important because it allows you to ride out short-term market fluctuations and focus on the underlying fundamentals of your chosen investments. It also gives your investments time to compound and grow, which can lead to greater returns over the long run. Additionally, it can help you avoid making impulsive and emotional decisions based on short-term market movements, which can be detrimental to your investment portfolio. For more information, visit the podcast website:
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2023 Tax Numbers to Know
Powering Your Retirement Radio
Welcome back to Powering Your Retirement Radio. Here are some key tax numbers for 2023 to keep in mind: The standard deduction for individuals is $12,550 and $25,100 for married couples filing jointly. The personal exemption has been suspended. The top marginal tax rate for individuals is 37%. The income threshold for the 37% tax bracket is $518,400 for single filers and $622,050 for married couples filing jointly. The long-term capital gains tax rate for individuals in the top bracket is 20%. The annual contribution limit for 401(k) plans is $19,000 for those under 50 and $25,000 for those...
info_outlineWelcome back to Powering Your Retirement Radio. I will revisit my Roth Conversions on Sale (Episode 33). I have received several calls on the episode, and in some cases, the idea of doing a conversion did not make sense.
There are a few reasons why. First, you have to have an idea of what your retirement income is going to be. If you are currently in the 24% Federal tax bracket, you want to ensure the conversion won't push you into the 32% bracket. You also have to have a feel for your retirement income. Many people see a dip in their income when they retire. If you end up in a lower tax bracket in retirement and you pay taxes at a higher tax rate now, you could be overpaying your taxes. You may avoid a giant Required Minimum Distribution later or higher tax rates, but those numbers are variables you can only guess at.
Second, Medicare assesses Income Related Monthly Adjustment Amounts (IRMAA). IRMAA charges are something that surprises many people. Because Medicare starts tracking your taxable income at age 63. Medicare sets IRMAA charges based on a 2-year look back, so when you turn 65, Medicare looks at your age 63 income. Currently, in 2022 your Part B Premium is $170.10 a person. If in 2020 you made$175,000 your Part B cost would be $544.30 a person. That is almost $375 a month or $4,490 a year more. So large Roth Conversion can have unintended consequences down the road you aren't even aware of.
Third, when you pull money from a Roth IRA, the Roth Distribution Ordering Rules come into play. The good news is contributions to a Roth are never subject to taxes or penalties. However, conversions are a different story. The converted amounts must stay in the Roth IRA for five years or until you turn 59 1/2. Finally, earnings on the money have a higher bar. If there are earnings, you have to be over 59 1/2, and the account has to be open for five years, or your earnings are subject to tax and penalties.
These 3 points are a good reminder of why even the most confident do-it-yourself investor should check with a professional to ensure they don't miss something. Imagine finding out two years from now the Roth conversion you made will cost you an additional $4,490 in Medicare premiums. Not a great feeling.
Thank you for tuning in this week. I will be back in two weeks with another episode. Until then, stay safe.
Visit the Podcast website: https://poweringyourretirement.com/2022/07/28/roth-conversion-gotchas/