Dear Trust Officer: Which is better, the traditional IRA or the Roth IRA? — Generous, but Prudent DEAR FUTURE RETIREE: There is no simple answer to your question, unfortunately. The traditional IRA offers an immediate income adjustment and savings in federal and state income taxes. If you are short on cash, you may need the […]
Read MoreCategory: Retirement Planning
Choice of Retirement Start Date
Timing is more important than many realize. Investor rule of thumb: Time in the market is more important than timing the market. Here’s evidence for that statement. Start with the following set of hypothetical returns: Hypothetical returns Year Return 1 -28% 2 -4% 3 -2% 4 8% 5 3% 6 10% 7 12% 8 8% […]
Read MoreAsk a Trust Officer: Charitable IRA Giving
Dear Trust Officer: I’ve heard of something called a “charitable IRA rollover.” What is that? — Generous, but Prudent DEAR GENEROUS, BUT PRUDENT: If you are older than 70½, you are permitted to arrange for a tax-free transfer of up to $100,000 per year from your IRA to the charity of your choice. This is […]
Read MoreRetirement Plan Limits Bumped Up for 2019
To make it possible for voluntary retirement savings to keep up with inflation, the various numerical limits embedded within qualified retirement plans are indexed for inflation. The big news today is that the IRA contribution limit goes from $5,500 to $6,000, if the individual is younger than age 50 in 2019, and $7,000 if he […]
Read MoreAvoid Retirement Surprises
The latest news on retirement preparedness is not encouraging. An estimated 40% of households headed by people aged 55 through 70 are unlikely to have sufficient resources to maintain their standard of living, according to a Wall Street Journal analysis. The median 401(k) account balance for this group is just $135,000, which might be enough […]
Read MoreMoney and Satisfaction
Lotteries have become enormously popular in the United States. There is a widespread perception that many lottery winners burn through their newfound wealth rather quickly, and don’t end up better off in the long run. Swedish researchers have examined this perception more rigorously, in a manner akin to a randomized test of a drug’s efficacy. […]
Read MoreAsk a Trust Officer: Longevity
DEAR TRUST OFFICER: I’m turning 65 this year and thinking about retirement. How long should I plan for? — ANXIOUS PRE-RETIREE DEAR ANXIOUS PRE-RETIREE: According to the latest data from the National Vital Statistics Reports (August 2017, reporting on 2014 experience), a male age 65 should expect to live 18 more years (to age 83) […]
Read MoreRequired Minimum Distributions
The best way to prepare for retirement is to save, early and often. Generally, one should set aside 10% to 15% of one’s income each year. If the habit takes hold early in one’s career, a very meaningful nest egg should be the result. Saving is easier when there is a tax deduction for it, […]
Read MorePlanning for a Long Life
Not many years ago, the typical retirement age, 65, was viewed as the onset of old age. Today, gerontologists define matters differently: If you’re between the ages of 65 and 74, you are one of the “young-old.” To be considered “old”, you need to be in the 75-to-84 age bracket. After that, you’re known, demographically, […]
Read MoreWealth and Longevity
You don’t have to be rich to live a long life, but it helps. Crain’s Wealth recently summarized several surveys on the subject. Some of the takeaways: According to an AMA study, the richest 1% of women live more than 10 years longer than the poorest 1% of women. For the men, the difference is […]
Read More