Reduced 401(k) Tax Deduction? So What?

Word on the street this week is that deductible 401(k) contributions could be capped at $2,400. President Trump then rescinded that idea. Previously, there were stories that the deduction for 401(k) plans would go away completely. What replaces a deductible 401(k) isn’t clear… there could be Roth accounts or non-deductible accounts. It is well documented . . . 

8 Step Retirement Planning Checklist

Retirement checklist

You are within a year of retiring, congratulations! While it is time to be happy, there are a few items to get out of the way. At this point you have identified you have enough money, you have an idea how you will spend your time, and invested in a way that fits your goals. . . . 

Extend the Life of Your Nest Egg 

After reaching financial independence, you have two options to generate income to cover your expenses:  Continue working  Draw income and principal (eventually) from your investments  Yes, it is possible to live only on the income generated from your investments. Yet, for many people, they will be required to dip into the principal at some point.  At . . . 

401(k) versus Roth 401(k) 

Having a sound tax strategy is critical to long-term wealth building.  Whether you’re an employee, business owner, or invest in real estate there are tax wise decisions you must make every day. After making a smart tax decision your next step is to decide what to do with your winnings.  To understand a tax strategy, I . . . 

Another way to fund a Roth

Mega back-door Roth IRA

Last week we discussed how to complete a back-door Roth IRA contribution. For many, this strategy is a slow and boring way to do it. Fortunately, there is another option, which can lead to larger Roth contributions when you earn too much. The ability to use this strategy is relatively new. In September 2014, the IRS released Notice 2014-54 to grant . . . 

Should you buy that house?

Should I buy a house?

The American ideal. Owning a home, a nice pension, and social security. You were set for life. After the 2008 housing crisis the desirability of home ownership changed. Many people lost everything because they bought too much house. Pensions are going extinct. Social security has changes on the horizon. The American ideal isn’t the same . . . 

Choosing between a Roth IRA or Traditional IRA

Roth IRA or Traditional IRA

The past two weeks we looked at why a Roth Account is the best and why a Tax-Deferred Account is the best. While the last two articles hit on both 401(k) and IRAs, this week we are focusing on choosing between a Roth IRA or a Traditional IRA. The decision matrix behind these two choices . . . 

When to contribute to tax deferred accounts

Traditional IRA

Last week we discussed when to contribute to a Roth account. This week we will look at the counter part… tax deferred accounts. These are known as Traditional IRA, 401(k), 403(b), SIMPLE IRA, and SEP to name a few popular versions. As you can see, there are many more tax-deferred account options than Roth options. . . .