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tax strategy

Spousal & Non-Spousal IRA Rules

Spousal IRA Rules When a spouse inherits an IRA, he or she has all of the same options as a non-spouse beneficiary, along with some other choices. For example, if a wife is the sole beneficiary, she also has the option to “treat it as her own.” The surviving spouse will need to either transfer…

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What is a “safe” retirement withdrawal rate?

In an investment portfolio, the withdrawal rate is the monetary percentage from which a retiree draws from his account each year.  A “safe” withdrawal rate is a fixed percentage distributed as a systematic withdrawal that reasonably expects portfolio funds to last throughout the retiree’s lifetime. When determining your personal retirement withdrawal rate, it’s important to…

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Earned Income Tax Credit for Working Grandparents

The Earned Income Tax Credit, or EITC, is a federal income tax credit for workers whose annual income is $53,505 or less (2016), depending on marital status and number of eligible dependents. There are other eligibility limits, such as the requirement that investment income be $3,400 or less for the year. This refundable credit can…

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How to Manage Taxes in Retirement

Here are some tips on how to manage taxes in retirement; To stay within the 15% income tax bracket: maximum annual income = single, $37,950; married filing jointly, $75,900. Investors can harvest capital gains with a zero tax rate as long as their income stays in or below the 15% tax bracket. To help reduce…

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How Millennials can Still Build Equity Through Home Ownership

Financial experts have long touted that buying a home is a foundation for building long-term wealth. In fact, the younger a homeowner enters the housing market, the more potential he has for greater wealth over his lifetime. However, fewer young adults today are buying houses than in the past. This puts a damper on the…

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Facts About IRAs

While an IRA may have a lower annual contribution limit (2017: $5,500; $6,500 age 50 or older) than a workplace-sponsored retirement plan, opening an IRA can provide an opportunity to help diversify your retirement assets. An IRA offers certain benefits that are generally not available in a 401(k), such as: Lower cost Larger spectrum of…

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Strategies for Paying for College

Even as college tuition continues to rise, more and more American families are paying less out of pocket than in previous years. During the 2015-16 academic year, grants and scholarships paid the largest portion of college expenses — 34 percent, compared to 30 percent the year before. In addition to grants and scholarships, parent income…

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Health Savings Account Update

Introduced in 2003, a Health Savings Account (HSA) used in combination with a high deductible health care plan provides three tax advantages: Income tax deduction for annual contributions Tax-deferred growth Tax-free withdrawals for qualified health care expenses Depending on the fate of the current health care law, the HSA could become even more useful. Both…

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