SEP IRA Contribution Limits (2014)

Scottrade Banner 3

A few years ago I set up an SEP IRA, 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. An SEP IRA works similar to a traditional IRA or 401(k). Contributions are generally 100% tax deductible, and investments grow tax deferred. Withdrawals […]

Published or Updated: February 3, 2014

401k Layoff Trap

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 […]

Published or Updated: October 28, 2012

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

roth-401k

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 […]

Published or Updated: March 23, 2012

11 Online Retirement Calculators

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 […]

Published or Updated: October 28, 2012

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

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 […]

Published or Updated: August 10, 2013

After-Tax Asset Allocation: Is there a gremlin lurking in your 401(k)?

As Roth IRA and Roth 401(k) retirement plans gain in popularity, unsuspecting investors may fall prey to a potentially expensive mistake. Money in a Roth 401(k) or Roth IRA account can be withdrawn tax free, assuming the withdraw meets IRS requirements. In contrast, withdrawals from traditional 401(k)s and deductible IRAs are taxed as ordinary income […]

Published or Updated: March 19, 2014

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

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 […]

Published or Updated: February 15, 2014

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

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. […]

Published or Updated: February 22, 2014

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

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 […]

Published or Updated: February 22, 2014