Portfolio rebalancing, how to budget your money, what’s an HSA and who needs one? Preparing for retirement is hard. From personal finance basics to retirement planning and everything in between, we’ve got a few ideas to make life a little simpler. Contact MCF with any questions.
To be eligible for benefits, individuals must have earned 40 calendar quarters of wages that were subject to Social Security tax. The amount of the benefits you would receive at full retirement age (FRA) is based on the average of the 35 highest years of earnings.
1. What it is? Your employer’s retirement plan is a defined contribution plan designed to help you finance your retirement. Federal and sometimes state taxes on your contributions and investment earnings are deferred until you receive a distribution from the plan (typically at retirement).
A Health Savings Account (HSA), is a savings account used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses.
There are all kinds of “rule of thumb” numbers floating around for how much income you’ll need in retirement, but they are just that — guidelines, not hard and fast rules that will necessarily apply to your particular situation. Budgeting for your retirement is a bit of a guessing game however clarifying your goals and expectations will make it easier.
It's important to work with an attorney and possibly a tax advisor / planner on your estate plan. The attorney's role will include guiding you through the creation of fundamental estate planning documents.
1. Don’t Cash Out Retirement Plans When Changing Employment When you leave a job, the vested benefits in your retirement plan are an enticing source of money. It may be difficult to resist the urge to take that money as cash, particularly if retirement is many years away. If you do decide to cash out, understand that you will very likely be required to pay federal income taxes, state income taxes, and a 10 percent penalty if under age 59½. This can cut into your investments significantly and negatively impact your retirement savings goals! When changing jobs, you generally have three options to keep your retirement money invested – you can leave the money in your previous employer’s plan, roll it over into an IRA, or transfer the money to your new employer’s plan.