Retirement Planning

SEP IRA Contribution Limits (2012 & 2013)

October 22, 2009

A few years ago I set up an SEP IRA. A SEP IRA is a retirement account designed for self employed individuals and owners of small businesses. Frankly, it’s one of the best kept secrets for the self-employed. A SEP IRA works similar to a traditional IRA or 401(k). Contributions are generally 100% tax deductible [...]

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401k Layoff Trap

June 29, 2009

I was surpirsed at the “Borrow from your 401k” suggestion. While it’s true that it’s better than cashing out, so many people are being laid off unexpectedly. When this happens, it must all be paid back or considered a cash-out, which comes at a time when people are least able to repay because they just [...]

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Roth 401k — Why these retirement plans may be bad for your wealth

July 3, 2008

Let’s get right to the point. Saving for retirement in a Roth 401k likely will leave you with less money in retirement than if you had invested in a traditional 401k. There are some exceptions to this rule. For example, a Roth 401k may be the right choice if you make more than $1 million [...]

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11 Online Retirement Calculators

April 21, 2008

Online retirement calculators come in all shapes and sizes. Some retirement calculators are extremely simple and provide little in the way of helpful information you can use to plan for retirement. Others are complex affairs that require an advanced degree from MIT to use. What follows are 11 online calculators for retirement that get it [...]

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Dave Ramsey’s Step #4: A Visual Guide to Saving 15% for Retirement in a Roth 401(k)

March 3, 2008

Dave Ramsey’s Step #4 is simply this–save 15% of your gross income for retirement, preferably in Roth 401(k) and Roth IRA retirement accounts. This step raises two important questions: (1) what’s so special about 15% as opposed to 10%, 20% or some other savings rate; and (2) why invest in after-tax Roth retirement accounts rather [...]

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Are you Saving Enough for Retirement? Check Out This Rule of Thumb

February 13, 2008

Are your retirement savings enough to live comfortably during your golden years? The March edition of Money Magazine has some guidelines to help you answer that $64,000 question. Before we get to the guidelines, it is important to understand that they are built on a number of assumptions. First, they assume you will need to [...]

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Slow Motion Retirement–A New Way to Look at the Rest of Your Life

February 11, 2008

Traditional retirement looks like this–work until you’re 65 or so, and then stop working until you die. More recently, views of retirement have begun to change, as more and more “retirees” are forced to work long after 65. There is a major problem with this approach to retirement, which I’ll come to in a moment. [...]

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Social Security is worth $225,000 for a typical retiree

February 1, 2008

According to a report just released by the National Academy of Social Insurance, the average monthly benefit for retirees is $1,045 in 2007. A 65-year old who wanted to buy a guaranteed income of that size — with payments that go up with the cost of living and continue for a widowed spouse — would [...]

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Traditional IRAs and Roth IRAs: Here’s what’s new for 2008

January 17, 2008

The IRS each year issues a very helpful and thorough publication about Individual Retirement Accounts or IRAs. Called Publication 590, the document covers traditional IRAs, Roth IRAs, SIMPLE IRAs and other related issues. The IRS just released its 2007 edition (it comes at the end of the year). It’s available as a pdf, but be [...]

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