Filling Tax Brackets May Be the Wrong Roth Conversion Strategy
Paying $0 in federal income tax during retirement might sound like the ultimate tax-planning victory. After decades of paying taxes on your earnings, investments, and retirement savings, reaching a point where you owe nothing can feel like evidence that you planned exceptionally well. But a $0 tax bill can also represent a missed opportunity. Each […]
You May Not Get to Choose When You Retire
You may have spent years planning to retire at a specific age, only to discover that the timing is not entirely yours to control. A company restructuring, a sale, a family member who suddenly needs your support, or a change in your own health can bring your working years to an end sooner than expected. […]
Using Home Equity as a Retirement Buffer Asset
Periods of financial stress can set the stage for difficult decisions for retirees, particularly when markets are down at the same time cash is needed for living expenses or an unexpected cost. Having another source of funds available can help reduce the need to sell investments after a decline and give the portfolio more time […]
Can You Live Off Dividends in Retirement?
Selling an investment in retirement can feel very different from receiving a dividend. One feels like spending down something you worked for years to accumulate. The other feels like skimming income off the top while leaving the underlying investment alone. Retirees who spent decades being told to save, invest, and avoid touching principal can be […]
How to Build a Social Security Bridge to Help Manage Sequence Risk
Social Security is a particularly valuable source of reliable retirement income. It functions much like a lifetime inflation-adjusted annuity backed by the federal government, providing income for as long as you live and adjusting benefits over time through cost-of-living increases. For married couples, the claiming decision can also affect the survivor benefit available after the first spouse dies. Unlike […]
The Wrong Way to Decide Whether an Annuity Is Expensive
One of the hardest problems in retirement is not knowing how long your money needs to last, and that uncertainty shapes almost every decision about how much you can safely spend. If you knew with certainty that retirement would last exactly 20 years, the planning would be considerably easier because you could establish a spending […]
Tontines: An Old Idea Revisited for Modern Retirement Challenges
A tontine is a pooled investment structure where a group of participants contributes money into a common fund. The fund then pays out income to its members, typically for life. As participants pass away, their share is redistributed among the surviving members, so the income for those who remain gradually rises. At its core, a […]
Understanding the Tax Impact of Funding a Fixed Annuity
When it comes to retirement income planning, annuities can serve as a powerful tool to convert savings into a predictable income stream, either for a lifetime or a specific period of time. With that said, the decision about what assets to use when funding an annuity (i.e., in a taxable brokerage account, a traditional pre-tax […]
Three Questions To Evaluate Longevity Risk For Retirees
Longevity risk—the risk of running out of assets before running out of time—is fundamental to retirement. We know about the distribution of longevity for the overall population, but an individual cannot know in advance precisely where he or she will fall in the distribution.
Does Your Mindset Affect How You Make Retirement Income Decisions?
The fields of behavioral finance and behavioral economics have uncovered various biases humans have which are great for day-to-day survival, but somewhat maladaptive for long-term investing.
