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Here is the link to Christine Benz of Morningstar interviewing Ed Slott, who many consider THE expert in the country on the IRS’s interpretation of IRA laws/rules for 2025.
Ed is a gold mine of information as to how to decide on whether to convert traditional IRAs to Roths, and it’s effect on your beneficiaries.
https://app.mscomm.morningstar.com/e/er?utm_source=eloqua&utm_medium=email&utm_campaign=MorningDigest&utm_content=None_62004&utm_id=32087&s=1258972516&lid=91893&elqTrackId=894e84e4e6dd4e4ea71a9bc97420afd2&elq=c1c50cb96d48485491b4d81fbe5a229d&elqaid=62004&elqat=1&elqak=8AF55770D8A5B2AC19A42DE86CB56351215EDD04764F052A1F72EA4FA79B9C459194
If we want to shrink the federal government budget deficit, lower inflation and fix Social Security, there’s a simple solution: We need to nudge folks to stay in the workforce for longer.
The more people who work, the more goods and services the economy will produce. That means demand is less likely to outstrip supply, pushing consumer prices higher. It should also mean more income and payroll taxes, helping to fund government programs.
By contrast, the solutions for inflation and government deficits that are usually discussed—raising income taxes,
Hi Jonathan,
I found you by reading an article you wrote for AARP, which led me to your HumbleDollar site and everyone’s articles. Very informative and useful!
I too got a surprise diagnosis of metasticized cancer a few years ago and fortunately have been successfully treated, so far. It has indeed illuminated my perspective on life. I expect to have more than a few months but am more cognizant of what is truly important in life.
Went out to dinner the other night with another couple. Connie an I ordered and then the others. “We’re going to split a meal,” the wife said.
Okay, won’t be dining with them again. I think that is rude and unfair to the sever and the restaurant. Just about as rude as the people who finish their meal, pay their check and then sit and talk at the table while a score of folks stand about waiting for their turn.
I’VE BEEN THINKING a lot about my mortality. I’m sure it has to do with Jonathan’s battle with cancer, along with losing some close friends over the past few years. Maybe that’s one reason I’ve been thinking about contacting some long-lost friends.
Roger was a college friend who I’ve considered getting in touch with. I believe I’ve found his current address, and I was going to reach out to him by sending him a Neil Young album with my phone number attached.
If I save on an after-tax basis in a 401k, (plan permitting) the earnings, upon distribution, are taxed as ordinary income and subject to RMDs. However, withdrawing my after-tax contributions only count toward the RMD until they are exhausted. If I save after-tax in a Roth account, the earnings are tax-free with no required withdrawals.
There are earnings limits on contributing to a Roth, but no income or account balance limits on Roth conversions.
Roth distributions are excluded from MAGI and thus substantial income may not count toward IRMAA premiums,
TED BENNA IS OFTEN called the “father of the 401(k).” In 1980, he implemented the first 401(k) plan based on his somewhat bold interpretation of the Revenue Act of 1978. He certainly couldn’t have envisioned the $11.4 trillion in “defined contribution” 401(k) and 403(b) accounts that we have today.
Individual retirement accounts also took off in the early 1980s, and traditional IRAs now hold an additional $11.3 trillion. Combined, that’s an impressive $23 trillion in tax-deferred retirement assets.
Hi HumbleDollar Community,
First of thanks to Jonathan and all of you for creating such a fantastic source of wisdom and practical advice. I am 53 and a novice investor (started very late ) with no residential property and semi-stable job. I have 2 young kids (got married late..) and plan to work till 64.
With the crazy housing market and bidding wars, I have been sitting on sidelines and getting priced out every year. I finally have come across a property in my town which I don’t want to leave (great schools) which I can afford.
A recent post by Dan Smith took a crack at evaluating at the often heard statement that we would all be better off if the FICA taxes we paid into the Social Security (SS) trust fund were instead invested in individual accounts. The idea is that by investing our payroll taxes in something like an S&P 500 fund, we would be better off at retirement. This strategy has the benefit of long-term compounding, since many of many us will work upwards of 50 years.
A QUOTE OFTEN attributed to Mark Twain goes as follows: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
This certainly applies to personal finance, and it’s why it can be helpful to take a step back sometimes to revisit widely held notions—including these six.
1. Social Security. You may have heard of Social Security’s “earnings test,” which can reduce the size of monthly checks for those who continue working after claiming benefits.
RETIREES ENDLESSLY debate how best to draw down their retirement savings, and yet it all comes down to two simple rules: Don’t spend too much each year, and don’t sell stocks during down markets.
How do we put these two rules into action? Retirees can pick from a host of withdrawal strategies, including the five popular choices listed below. You’d likely fare just fine with any of the five strategies—but that doesn’t mean you shouldn’t pick carefully.
STOCKS, BONDS, CASH—and a house owned free and clear. For many, that’s the recipe for a financially successful retirement. Our homes represent a central pillar of middle-class status. With a paid-off mortgage, we have an affordable place to spend our old age.
Yet signing up for decades of house payments has become controversial for its high opportunity cost—what you give up to pay the mortgage. Has a home mortgage, with its long, slow road to payoff,
I’VE SPENT MUCH OF MY life trying to better understand the world, especially the financial world. But I wonder whether I should have spent more of that time trying to better understand myself.
Why do some financial situations scare us, while others leave us unperturbed? Why do we spend time and money in ways we later regret? Why do we find our bad habits so difficult to change? Why do we admire some folks,
I’m wondering if there’s data on how much dividends for total market or S&P500 go up or down on average during bull vs bear market. As a retiree, I rely on my dividends and interest for my living expenses. It seems somewhat arbitrary to just hold 5-7 years of total living expenses (minus SS/pension) when in fact, dividends would like still happen even in a market downturn?
EARLY LAST WEEK, The Wall Street Journal ran an article with the headline “Why This Frothy Market Has Me Scared.” The author cited a number of indicators that have him worried, including a survey of investor optimism that’s at a 35-year high. Investors, the Journal said, are feeling “euphoric,” and that’s often a bad sign.
So, as we head into year-end, it’s worth taking stock of where things stand. The stock market has returned nearly 25% so far this year.
