Latest news with #IRAs
Yahoo
30-06-2025
- Business
- Yahoo
Don't Have a Full-Time Job? 4 Ways You Should Adjust Your Retirement Planning
If you're self-employed or working part time, your path to retirement likely looks different than the plan of someone in a traditional 9-to-5. Without built-in benefits or an employer-sponsored retirement plan, it's up to you to create your own safety net. Read Next: Explore More: These four steps can help you build a stronger foundation and plan with more confidence, no matter how unconventional your workweek looks. Also see three essential tips for a winning retirement savings plan. 'With 'traditional' retirement planning, typically there is a built-in retirement savings vehicle and automated savings in the form of a 401(k),' Christine Lam, CFP, ChSNC, investment advisor representative at Financial Investment Team, wrote in an email. Not all employers offer 401(k) options to part-time employees, but Lam pointed out that the rules around this have changed due to the Secure 2.0 Act. 'If an employer does not offer 401(k) benefits to part-time employees, then it is the responsibility of the individual to set aside money for retirement,' Lam explained. That means opening up a retirement savings account and making regular contributions. According to Lam, traditional IRAs or Roth IRAs offer the most flexibility for freelancers and self-employed individuals, as the only requirement is for individuals to have earned income. Other options include a solo 401(k) or SEP IRA. 'It is equally important to set up an automatic savings schedule to max out these plans since deferrals are not being deducted automatically from a paycheck as a traditional 401(k) plan would do,' Lam advised. Check Out: In most cases, full-time employees also have access to insurance benefits, including health insurance, disability and life insurance. 'As a part-time worker, you may need to budget for private health insurance (which can be costly) and secure your own disability and life insurance policies, which are an added expenditure,' Lam explained. Because these costs can add up, she recommended having a detailed budget of monthly expenses. As of May 2025, the average monthly benefit amount for retired workers was $2,002, but working part time can result in lower lifetime earnings, and ultimately, a smaller Social Security check in retirement. 'This is because Social Security looks at your past 35 years of working history and pulls the highest earning years to determine your future benefit,' Lam wrote. 'Working part-time could result in lower earnings, which will in turn lower future Social Security benefits.' That means even if you're consistently working, part-time income may not be enough to build up the earnings history needed to maximize your benefits later on. 'Many Americans rely on Social Security to replace around 40% of their income in retirement years,' Lam continued. 'So having a detailed financial plan that factors in future income and expenses prior to making the retirement decision will be especially important for long-term part-time employees.' For part-time workers, retirement isn't always tied to a specific age or date. Without the structure of a full-time job, you may not feel the same urgency or burnout that often pushes people to retire. 'Thus, they can potentially want to work longer, or incorporate a semi-retired lifestyle or delay retirement plans altogether, which can help phase them into retirement,' Lam wrote. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck 10 Cars That Outlast the Average Vehicle This article originally appeared on Don't Have a Full-Time Job? 4 Ways You Should Adjust Your Retirement Planning Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
25-06-2025
- Business
- Yahoo
How Social Security Privatization Could Change the Role of IRAs in Your Portfolio
If Social Security privatization ever becomes a reality, workers will take on a much larger role in preparing for retirement. IRAs would likely become a staple in more investor portfolios following privatization. The financial know-how required to make the most of investing could become a by-product of privatization. The $23,760 Social Security bonus most retirees completely overlook › Social Security privatization refers to a proposal that shifts the current government-run system to one where a portion of the money you normally pay in Social Security taxes would be diverted to a personal investment account that you would be responsible for managing. The goal is to allow Americans to maximize Social Security dollars. Although the idea has been around for decades, it's taken on new heat as some worry DOGE cuts to the Social Security Administration (SSA) are the first steps in forcing privatization. There's no denying that saving for retirement as we know it would change if Social Security were ever privatized. Also impacted would be the value we put on other methods of savings, like individual retirement accounts (IRAs). Here's how some of those changes might present themselves. There's nothing like the knowledge that your Social Security benefits aren't going to be as much as expected to inspire you to find another way to build retirement savings. Chances are, IRAs will become even more critical as a primary vehicle for saving, helping you bridge the gap between income needs and resources. Some may make IRAs their primary retirement funding source, as IRAs tend to provide more investment options than 401(k)s and other employer-sponsored retirement plans. If lawmakers do ever decide the current Social Security system needs an overhaul, there's a good chance they'll at least discuss increasing IRA contribution limits as a way for individual investors to bolster their retirement funds. While they're at it, Congress could consider enhancing catch-up options for older workers. IRAs offer such a wide range of investment options, you may base your investment decisions on what works best in tandem with other investment types, like a 401(k) and annuities. It's easier to come up with a balanced portfolio when you spread assets across several investment types. For example, if you have an employer-sponsored retirement plan that's heavy on higher-growth assets like stocks or real estate, you may want to balance those with a bond-heavy IRA. The point is, no matter how your specific investment strategy works, IRAs give you one more tool to work with. Even if you've been investing for years, don't be surprised if taking greater control of investment decisions leads to a higher level of financial literacy and a deeper knowledge of how to make the most of an IRA. As you take on more responsibility for retirement savings, there's likely to be a heightened focus on financial education, investment options, and how to make the most of strategic withdrawals. In addition, it's possible your employer will get on board by providing you with easier access to financial advisors and resources – a move sure to add to your knowledge base. For the casual investor (particularly a new investor), the focus is often on short-term gains. However, knowing that your Social Security benefits will be less than expected may be enough to turn your focus to long-term growth instead. In turn, depending on your age, you may find that you have a larger appetite for taking risks with IRA investments to make up for any shortfalls in Social Security. As mentioned, it's also possible that an IRA will be your "safe space" -- a place to invest in lower-risk assets. No matter how you use it, it's likely that it will be with an eye on the future. With the knowledge that you're making up for lost Social Security benefits, you could decide to integrate annuities into your IRA. Annuities can be a good way to create steady, predictable income that complements other retirement investments. In short, if Social Security privatization ever comes to pass, it's a good bet that IRAs will become an even more important part of the average investor's portfolio. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. How Social Security Privatization Could Change the Role of IRAs in Your Portfolio was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
25-06-2025
- Business
- Miami Herald
Tony Robbins sounds alarm for Americans on Social Security
An important report reveals that many Americans feel unprepared for retirement - a reality that personal finance author Tony Robbins considers urgent. Robbins believes the path toward catching up on tools such as 401(k) savings and IRAs (Individual Retirement Accounts) begins with an essential but often-overlooked move: taking ownership of one's financial future. Don't miss the move: Subscribe to TheStreet's free daily newsletter While nearly 88% of working Americans foresee Social Security playing at least a partial role in funding their retirement, the typical monthly benefit of around $2,000 is unlikely to support the lifestyle most retirees envision. That gap pushes many to count on alternative streams of retirement income. A significant portion of workers plan to rely on other sources: 84% anticipate using workplace-sponsored retirement plans such as 401(k)s, 77% expect to lean on personal savings and investments, and 68% look to Individual Retirement Accounts (IRAs) as additional lifelines, according to the Employee Benefit Research Institute. This diversified approach is crucial, as depending solely on Social Security will not suffice, Robbins notes. Related: Shark Tank's Kevin O'Leary warns Americans on 401(k)s Robbins emphasizes his view that it's time to stop sidestepping the facts. Many have yet to take that first serious step - building a solid savings and investment strategy. As retirement looms, especially for those still trying to catch up, swift and deliberate planning becomes essential. Getty Robbins is vocal about the risks of depending too heavily on Social Security for retirement. In his view, it's a grave misstep to assume those benefits will be enough to sustain most people in their later years - especially with longer life expectancies stretching the cost of retirement well beyond previous generations' norms. According to Robbins, Social Security was never meant to serve as the sole financial foundation for retirement. He says Americans must confront this reality and shake off any passive approach to retirement planning. For him, the wake-up call begins with facing the numbers - doing some straightforward calculations to understand exactly where one stands financially and how far there is to go. More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Rather than wait for a crisis to force action, Robbins champions a proactive approach. He argues that the ability to plan ahead and anticipate one's financial needs is what separates those who thrive in retirement from those who struggle. "You can ... work toward the ultimate retirement dream: achieving complete financial freedom to do whatever you want with no fear of running out of money," Robbins wrote. In his eyes, financial confidence begins with clarity: Knowing the precise amount needed to retire comfortably is a non-negotiable first step in any serious plan. His core message? Stop avoiding the truth, engage with the math, and take charge before time runs out. Related: Tony Robbins sends strong message to Americans on 401(k)s To reduce reliance on Social Security, Robbins encourages people to approach retirement planning with clear-eyed realism and ambition. He believes that too many individuals make the mistake of planning around their income rather than their actual spending habits. For Robbins, knowing what you spend - especially if it's more than you earn - is the true foundation for estimating how much you'll need once work life ends. He stresses the importance of tracking annual expenses, not just to build awareness but to identify areas where spending can be reined in. Developing this habit now not only sharpens financial discipline but also frees up more resources for long-term savings. Once you've got a solid handle on your typical yearly spending, Robbins recommends multiplying that figure by 20 - a rough estimate for the number of years one might reasonably expect to live in retirement, given increasing life spans. He advises being cautious and realistic with assumptions, preferring conservative projections over overly optimistic ones. While this formula provides a baseline, Robbins knows many retirees dream of more than simply maintaining their current lifestyle. Whether it's globe-trotting, a luxury home upgrade, or new adventures, he urges people to run the numbers on their aspirational retirement too. Use the same framework, then apply it to the lifestyle you actually want - not just the one you have. Ultimately, Robbins challenges people to think beyond survival and aim for fulfillment. He believes retirement planning should inspire you to ask not only what you'll need - but what you truly desire. Related: Dave Ramsey warns Americans on Social Security The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
08-06-2025
- Business
- Yahoo
Suze Orman: 2 Ways for Retirees To Manage Multiple IRAs
Juggling multiple individual retirement accounts (IRAs) can get complicated. 'If you have multiple traditional IRAs, you are setting yourself up for some potential headaches once you reach the age where you must begin to take required minimum distributions (RMDs),' financial expert Suze Orman wrote in a recent blog post. Depending on the year you were born, this age is either 73 or 75. If you're currently retired, but haven't reached the age when you are required to take distributions, take note of these strategies now to make managing your multiple IRAs simpler. Check Out: Read Next: If you have multiple traditional IRAs, the best way to make managing them easier is to roll all of your accounts into one. 'You can move money from one traditional IRA into another traditional IRA without any tax bill,' Orman wrote. 'It's just a rollover. If you have multiple traditional IRAs at the same brokerage, call them and you might be able to consolidate all of them with just a phone call. 'If you have traditional IRAs at different brokerages, decide which one you want to keep, and then ask for rollover instructions from the brokerage you will move your money out of.' The money should be transferred directly from one account to the other — otherwise, there may be tax implications. Consolidating your accounts is the strategy Orman recommends if you currently have multiple IRAs. 'The less you have to keep track of as you age, the easier you are making it for an older you, and anyone who might eventually step in and help manage your finances,' she wrote. 'One big traditional IRA account that simplifies your life to one RMD is a wise retirement move.' See More: If you don't want to consolidate your accounts, your other option to make things simpler is to take your total RMD amount from one account instead of having to take distributions from each. 'For instance, if you have four IRAs, calculate the RMD for all four. (Your brokerage will have a free online tool to help with this. It's an easy calculation.),' Orman wrote. 'Then, add up all four.' The example Orman gives is that you have an IRA with an RMD of $2,000, an IRA with an RMD of $4,000, an IRA with an RMD of $2,500 and an IRA with an RMD of $3,500. That means in total, you must withdraw $12,000. 'If you want, you can take a $12,000 RMD from one of the IRAs,' Orman wrote. 'All the IRS cares about is that you satisfy your total RMD obligation.' This move allows you to be more strategic. 'This strategy can be helpful if you invest your IRAs a bit differently,' Orman wrote. 'In years when stocks are down, you might want to avoid taking the RMD directly from an IRA heavily invested in stocks, and instead take it from an IRA with cash or bonds.' More From GOBankingRates Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on Suze Orman: 2 Ways for Retirees To Manage Multiple IRAs
Yahoo
08-06-2025
- Business
- Yahoo
Suze Orman: 2 Ways for Retirees To Manage Multiple IRAs
Juggling multiple individual retirement accounts (IRAs) can get complicated. 'If you have multiple traditional IRAs, you are setting yourself up for some potential headaches once you reach the age where you must begin to take required minimum distributions (RMDs),' financial expert Suze Orman wrote in a recent blog post. Depending on the year you were born, this age is either 73 or 75. If you're currently retired, but haven't reached the age when you are required to take distributions, take note of these strategies now to make managing your multiple IRAs simpler. Check Out: Read Next: If you have multiple traditional IRAs, the best way to make managing them easier is to roll all of your accounts into one. 'You can move money from one traditional IRA into another traditional IRA without any tax bill,' Orman wrote. 'It's just a rollover. If you have multiple traditional IRAs at the same brokerage, call them and you might be able to consolidate all of them with just a phone call. 'If you have traditional IRAs at different brokerages, decide which one you want to keep, and then ask for rollover instructions from the brokerage you will move your money out of.' The money should be transferred directly from one account to the other — otherwise, there may be tax implications. Consolidating your accounts is the strategy Orman recommends if you currently have multiple IRAs. 'The less you have to keep track of as you age, the easier you are making it for an older you, and anyone who might eventually step in and help manage your finances,' she wrote. 'One big traditional IRA account that simplifies your life to one RMD is a wise retirement move.' See More: If you don't want to consolidate your accounts, your other option to make things simpler is to take your total RMD amount from one account instead of having to take distributions from each. 'For instance, if you have four IRAs, calculate the RMD for all four. (Your brokerage will have a free online tool to help with this. It's an easy calculation.),' Orman wrote. 'Then, add up all four.' The example Orman gives is that you have an IRA with an RMD of $2,000, an IRA with an RMD of $4,000, an IRA with an RMD of $2,500 and an IRA with an RMD of $3,500. That means in total, you must withdraw $12,000. 'If you want, you can take a $12,000 RMD from one of the IRAs,' Orman wrote. 'All the IRS cares about is that you satisfy your total RMD obligation.' This move allows you to be more strategic. 'This strategy can be helpful if you invest your IRAs a bit differently,' Orman wrote. 'In years when stocks are down, you might want to avoid taking the RMD directly from an IRA heavily invested in stocks, and instead take it from an IRA with cash or bonds.' More From GOBankingRates 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on Suze Orman: 2 Ways for Retirees To Manage Multiple IRAs
