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A 2015 study found that 41% of households headed by someone aged 55 to 64 had no retirement savings, and only about a third of them had a traditional pension. Among households in this age group with savings, the median amount was just $104,000.1 Your own savings may be more substantial, but in general Americans struggle to meet their savings goals. Even a healthy savings account may not provide as much income as you would
Yes, you can name a charity as beneficiary of your IRA, but be sure to understand the advantages and disadvantages. Generally, a spouse, child, or other individual you designate as beneficiary of a traditional IRA must pay federal income tax on any distribution received from the IRA after your death. By contrast, if you name a charity as beneficiary, the charity will not have to pay any income tax on distributions from the IRA after
Yes, if you qualify. The law authorizing qualified charitable distributions, or QCDs, has recently been made permanent by the Protecting Americans from Tax Hikes (PATH) Act of 2015. You simply instruct your IRA trustee to make a distribution directly from your IRA (other than a SEP or SIMPLE) to a qualified charity. You must be 70½ or older, and the distribution must be one that would otherwise be taxable to you. You can exclude up
If you’re within 10 years of retirement, you’ve probably spent some time thinking about this major life change. The transition to retirement can seem a bit daunting, even overwhelming. If you find yourself wondering where to begin, the following points may help you focus. Reassess your living expenses A step you will probably take several times between now and retirement–and maybe several more times thereafter–is thinking about how your living expenses could or should change.
In the financial world, there are a lot of rules about what you should be doing. In theory, they sound reasonable. But in practice, it may not be easy, or even possible, to follow them. Let’s look at some common financial maxims and why it can be hard to implement them. Build an emergency fund worth three to six months of living expenses Wisdom: Set aside at least three to six months worth of living
Surviving the College Application Process There’s no doubt about it–the college application process can be stressful for many high school students and their parents. After all, it’s easy to feel overwhelmed while trying to manage numerous applications, each with varying deadlines and requirements. If your child is applying to college, here are some things to keep in mind before he or she gets started. Application timeline For students applying under the regular decision process, college
here’s a fine line between keeping financial records for a reasonable period of time and becoming a pack rat. A general rule of thumb is to keep financial records only as long as necessary. For example, you may want to keep ATM receipts only temporarily, until you’ve reconciled them with your bank statement. But if a document provides legal support and/or is hard to replace, you’ll want to keep it for a longer period or
Organizing your financial records is a cyclical process rather than a one-time event. You’ll need to set up a system that helps you organize incoming documents and maintain existing files so that you can easily find what you need. Here are a few tips. Create your system: Where you should keep your records and documents depends on how quickly you want to be able to access them, how long you plan to keep them, and
What if you were faced with the heart-wrenching news that you were terminally ill? How would you provide for the continued financial support of your family and loved ones? How would you and your family pay for the expenses related to your medical care and comfort? Your life insurance policy may be a valuable resource for you and your family. Not only can you use life insurance to provide a source of income to your
For a lot of young people today, it’s difficult to purchase a home without at least some financial assistance. As a result, many young adults turn to their parents or other family members for help with a down payment. If you plan on lending your child money for a down payment on a house, you should try to assume the role of a commercial lender. Setting the terms of the loan in writing will demonstrate