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Tax-Efficient Retirement Withdrawal Strategy

Tax-Efficient Retirement Withdrawal Strategy 1

When you stop working and have to start withdrawing money from your retirement accounts, you have to decide the best way to withdraw money from different accounts. Do you take money out of your tax-free accounts like Roth IRA and Roth 401(k) first? Or do you withdraw from your tax-deferred accounts like Traditional IRA and … Read more Tax-Efficient Retirement Withdrawal Strategy

The 80 Percent Rule for Retirement Explained and Improved

The 80 Percent Rule for Retirement Explained and Improved 7

In How Much Money Do You Need to Retire, I mentioned using the 80% rule to calculate retirement needs. You may have heard this rule before; here is a variation of it: You need 80% of your pre-retirement income during your retirement. Where Did the 80% Number Come From? The theory behind the 80% number is that … Read more The 80 Percent Rule for Retirement Explained and Improved

The Average Retirement Savings by Age

The Average Retirement Savings by Age 25

Are you saving enough for your retirement? How are you comparing to other Americans? In this article, we will be looking at average retirement savings by age group in the United States. This article is using the information found in the Economic Policy Institute’s The State of American Retirement article, which based their information on … Read more The Average Retirement Savings by Age

Emergency Fund: Your Safety Net Against Financial Emergencies

Emergency Fund: Your Safety Net Against Financial Emergencies 29

You know you need to have some money set aside for life’s emergencies, but how much is the right amount? Should you have a separate fund for your car, for unemployment, and for medical problems? At the end of the day having some sort of emergency fund, specific or not, is better than having none at … Read more Emergency Fund: Your Safety Net Against Financial Emergencies

Using Multiply-By-25 Rule to Retire One Expense at a Time

Using Multiply-By-25 Rule to Retire One Expense at a Time 34

Most people think about financial freedom as a point in time when you can fully cover your living expenses with non-job income. This usually involves saving and investing a significant amount of money so that a small percentage could be safely withdrawn to cover living expenses each year. To many people, this is just hard … Read more Using Multiply-By-25 Rule to Retire One Expense at a Time

Using 401(k) and IRA for Down Payment for Home Purchase

Calculate home value

Homeownership is the ultimate American Dream. If you’re going to buy a home, though, you will likely need a down payment — especially if you want the best mortgage rate. For those trying to make a 10% or 20% down payment on a home, coming up with tens of thousands of dollars can be a … Read more Using 401(k) and IRA for Down Payment for Home Purchase

What is a 401(k) Plan and How Does It Work

What is a 401(k) Plan and How Does It Work 42

The easiest way to get started saving for retirement is to use your employer’s 401(k) plan. A 401(k) is a retirement savings plan sponsored by your employer. It lets you save and invest a portion of your paycheck before income taxes are taken out. The specific rules and investment options vary from plan to plan, … Read more What is a 401(k) Plan and How Does It Work