Jump-Start Your Retirement Plan, June 2015
Kiplinger is teaming up with the National Association of Personal Financial Advisors (NAPFA), whose planners will answer questions on retirement planning and other financial challenges. Submit your questions here and get free personalized financial advice on Thursday, June 18, from 9 a.m. to 5 p.m. ET.
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I am 52 and disabled. I am considering cashing out of my IRA as I can avoid the early withdrawal penalties and the market volatility. What would you advise? -
let's assume that I have a traditional IRA of $100,000 and a marginal federal tax rate of 25%. If I convert to a Roth IRA before retiring, I will pay $25,000 in federal income tax (even more if the conversion pushes me into a higher tax bracket). If I keep the traditional IRA however and withdraw from it after retiring, I will pay far less. Even if I withdraw the full amount in one year, I will pay only $11,437.50:
- zero on the first $20,600 (2 personal allowances @ $4,000, plus standard deduction of $12,600)
- 10% on the next $18,450
- 15% on the next $56,450
- 25% on the next $4,500 -
@Tommie Most advisors (including myself) recommend something known as tax diversification. It's basically the idea that you should spread investment assets out over different types of accounts. So you might have some money in tax-deferred accounts (i.e. 401k, IRA, etc.), some money in tax-free accounts (i.e. Roth IRA), and some money in taxable accounts. Since none of us know what tax rates will look like 5 or 10+ years from now (or even 5-10 months from now when Congress doesn't cooperate!), it helps to have these different accounts so you have flexibility when withdrawing money in retirement. -
Hello. I'm 28 years old, and am trying to be really proactive about saving for retirement. I max out a Roth IRA every year, and I have a Roth 401(k) at work, too. I'm wondering how much I should be putting into the 401(k) at a minimum, since I'm trying to build up my savings and pay bills, too. Thanks :)
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Hi, At the end of this year, I will of finished a two year expense tracking program of all of our expenses (including cash). I was trying to extrapolate out what we would spend if we were retired (with no mortgage, etc). Basically what I have found so far is we would spend about $60,000 a year on everyday basic expenses (including property taxes), and ideal want to have $20,000 - $30,000 for traveling (non-discretionary). We still have about a dozen years to go before retirement. How much "total" do you think we would need (not counting Social Security/ that would just be icing on the cake), to pull off basically $90-$95,000 a year without touching the principal savings total, (which would be thru our SEP / 401k / 401k Roth / Mutual funds / Regular Roths).
Thank you. -
My husband is 68 years old, and he still have $30k in Regular IRA, do you recommend him to do the Roth conversion at this time of his age? Say $6K each year for the conversion until all funds convert into Roth IRA. (we do not want to convert it too much each year, due to it may cause us to pay more tax.)
Or, do you recommend not to do the Roth conversion since he is 68 years old. We are at low tax level.
Thank you. -
I would like to put a small portion of my portfolio into Market Linked CDs. Are there any particular Banks that you would suggest, and is there anything that I should pay extra attention to? -
I am planning on retiring within the next 6 years or so. I want to know how I can make the most of this time until I retire. I am single, I have a long term health care policy, about 400k in investments 70% stock, and about 125k in equity in my home. I am a bit concerned about the ups and downs of the stock market these days. Is there some advice you could give me to make the best investment decisions? Also, I plan on waiting to take social security until I am 70 years old when I retire although I do plan on taking 1/2 of my ex-husband's social security when I am 66. Thanks for any advice.
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Here's a great piece to help everyone gauge where they are in terms of retiring:
Are You Saving Enough for Retirement? - Quiz
www.kiplinger.comTake our quiz to see if you are on track for a comfortable retirement and if not, how you can improve your chances. -
My wife and I have $1 million in retirement assets (her 403b and 401a) and $2 million in life insurance. If both of us died tomorrow, would inheritance taxes dig into this? I've heard we are still under the federal cap, but we live in Massachusetts and worry about that. Would the retirement assets go through "designated beneficiary" and be exempt from the inheritance tax?
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You may want to check out:
Tax Planning for After Death
www.kiplinger.comThe IRS demands a final accounting for the deceased and it's up to your executor, or your survivors, to file the paperwork. -
Hello! I'm soon to be 48 and my husband, who is diabetic with some other health problems, is 51. He does not have long-term care insurance or long-term disability insurance (his employer doesn't offer). I worry about the impact that his future medical costs might have on our retirement savings. Do you have any recommendations for insurance products or something else that might apply for a diabetic? Thanks so much. -
What percentage per year can I withdraw from a $2.1mil portfolio to generate income for a 45 year span? I'm assuming portfolio to be 70/30 stock/bonds over the term.
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Thank you so much to all of the financial advisers who were here fielding questions today!
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To find a personal financial adviser in your area, visit
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And, don't forget to visit Kiplinger.com's new Wealth Creation channel -- wealth.kiplinger.com -- for more insights on building and protecting your wealth.The channel offers hand-picked Kiplinger.com articles, along with exclusive insights from trusted financial planners, to guide discussions between advisers and individual investors. It's free. Visit now!
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We look forward to chatting with you in the next Jump-Start Your Financial Plan Q&A on September 17. See you then!
