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67 votes
Accepted

Aging parents with no investments

Do they want your help? Many times parents have difficulty taking advice from those whose nose and butt they wiped. Your accomplishments and investments are independent of the fact. What are their ...
Pete B.'s user avatar
  • 76.7k
58 votes

Have I saved too much for retirement so far?

Nobody ever got to retirement age and said "Wow, I saved too much". Your wealth has a direct effect on your quality-of-life in retirement - how much you travel, whether you go to movies vs. the ...
Harper - Reinstate Monica's user avatar
50 votes

What is the median retirement savings in the United States today?

I find this very hard to believe Believe it. The bottom quarter of American households have negative net worth, and the bottom three quarters have no more than a tiny amount saved up. https://en....
Eric Lippert's user avatar
  • 4,996
49 votes
Accepted

Why is half of your IRA Required Minimum Distribution forfeited if you do not make minumum withdrawals by 70.5 years of age?

According to the link below, it does appear that you must take an RMD, or Required Minimum Distribution, from your IRA at age 70½, or face a 50% penalty of the RMD AMOUNT that has NOT been taken, ...
schizoid04's user avatar
  • 2,735
46 votes

Aging parents with no investments

Probably they shouldn't be investing. It's too late for that. And if they aren't investing it's pretty simple: Sell the big property before they urgently need the money because that takes time, then ...
Nobody's user avatar
  • 822
43 votes
Accepted

Why do baby boomers have to sell 5% of their retirement accounts by the end of the year?

In the US, "Traditional" retirement accounts are generally subjected to something called Required Minimum Distributions (RMDs). For clarity, a "traditional" account is one where there is a tax ...
quid's user avatar
  • 49k
39 votes
Accepted

Is 401k as good as it sounds given the way it is taxed?

Your analysis is not comparing apples to apples which is why it looks like investing money in a non-qualified account is better than a 401k (traditional or Roth). For the non-qual you are using post ...
Eric Johnson's user avatar
  • 2,427
38 votes
Accepted

Is a Roth IRA good for a high schooler?

You are correct that if your income is low enough that you don't have to pay taxes, then a Roth will let you avoid taxation at both ends, because Roth withdrawals are tax-free. You are also correct ...
BrenBarn's user avatar
  • 24k
35 votes

How much should you save for retirement in a country that automatically takes care of retirement savings?

You give hints, but don't quite answer the key question - At the time you retire, what fraction of your income will be replaced by the benefits you list? If that amount is your 'happy' number, you ...
JTP - Apologise to Monica's user avatar
32 votes

How much should you save for retirement in a country that automatically takes care of retirement savings?

Making the assumption that social programs will have the same conditions in 30-40 years (or even 5 years) as they do now is a very dangerous assumption to make. For example, how do you think the ...
Joe's user avatar
  • 35.8k
32 votes

Is this a reasonable financial plan? - Spend all of your money every few years?

I can see several problems with your plan: Retirement exists for a reason. There are various things that may prevent you from working when you are older: You may be less able to work, be it because ...
Weirdo's user avatar
  • 1,211
31 votes
Accepted

Does the “15% into retirement” rule include employer contributions?

It depends on who you ask, and how you look at it. In your linked question, one answer says no (the others don't specify). If you ask Dave Ramsey, whose advice shows up a lot on this site, he'd say no....
D Stanley's user avatar
  • 136k
30 votes

Saving for retirement... starting at 68 years old

You can live comfortably on Social Security alone (my mother does it), but maybe not with a mortgage and a car payment, and maybe not in the area that you currently live. You might need to downsize ...
D Stanley's user avatar
  • 136k
30 votes

My employers "401(k) contribution" is cash, not an actual retirement account. What are my options?

Based solely on the quote you posted, it sounds like they are just giving you a 6% "bonus" at the end of the year instead of a 401(k) match. Maybe they intended to set up a 401(k) plan but ...
D Stanley's user avatar
  • 136k
28 votes
Accepted

How much money do I need to retire?

You can use firecalc (https://www.firecalc.com/) to show the historical probabilities that your stock investments will never run out of money when you take out money each year. For 15.000, a stock ...
R.K.'s user avatar
  • 926
27 votes

Why is half of your IRA Required Minimum Distribution forfeited if you do not make minumum withdrawals by 70.5 years of age?

You elected to defer paying taxes by contributing to an IRA. Lawmakers simply want to make sure that they collect those taxes by requiring you to either withdraw the money (incurring a tax liability) ...
NL - Apologize to Monica's user avatar
27 votes
Accepted

Continue to save?

The key question in personal finance is what your personal goals are. We can't tell you what those will be. 'How much' you should save is a question about payoff now vs in the future. Why eat only ...
Grade 'Eh' Bacon's user avatar
26 votes

cashing 401(k) including company match

If you are vested, then the money is all yours. Tax withheld will be 20%, which is standard, but at tax time you'll owe the difference, the 10% penalty plus your marginal rate, 25% most likely. More ...
JTP - Apologise to Monica's user avatar
26 votes

Aging parents with no investments

Explain to your parents what a fiduciary1 is. Tell them that no matter how much they like this guy (gal?) they should only invest with someone that they have a fiduciary relationship with - because ...
J. Chris Compton's user avatar
26 votes
Accepted

How can I offset the risk of a market crash when making a retirement plan?

Investment is inherently risky. Other investment options compared to stocks would be: Cash, which is likely to be eaten by inflation over time (100.000 at 2% yearly inflation will be worth ~55.000 in ...
R.K.'s user avatar
  • 926
24 votes
Accepted

What is the median retirement savings in the United States today?

Social security and pensions make up a big part of it. You may want to look at the source of the data. If a person, has 5K at Vanguard, 5K at Fidelity and 100K at the bank; Fidelity will report on ...
Pete B.'s user avatar
  • 76.7k
24 votes
Accepted

Should I begin investing in a 403(b)

Would it be wise to begin investing into this plan? Provided you have no other consumer/educational debt to take care of first, yes. How does it work when I leave my current place of employment? ...
D Stanley's user avatar
  • 136k
23 votes
Accepted

Have I saved too much for retirement so far?

Let me focus on the retirement number. I wrote a blog post on just that, The Number. In which I offer an easily editable spreadsheet to help users see if they are on track. With a goal of having 20X ...
JTP - Apologise to Monica's user avatar
22 votes
Accepted

New company doesn't allow 401k deposits for 6 months, what to do with money I used to deposit?

$9000 over 6 months is great, I'd use it for long term savings regardless of the 401(k) situation. There's nothing wrong with a mix of pre and post tax money for retirement. In fact, it's a great way ...
JTP - Apologise to Monica's user avatar
21 votes

I am failing to see the purpose of a Traditional IRA for someone who already has access to a 401(k)

Your assumptions are flawed or miss crucial details. An employer sponsored 401k typically limits the choices of investments, whereas an IRA typically gives you self directed investment choices at a ...
CQM's user avatar
  • 20.2k
21 votes
Accepted

Should I get out of debt fast using Dave Ramsey's Tactics?

Understand that the rationale for pausing retirement is not financial, it is behavioral. His tactics are geared toward intense focus on a single goal. Yes you give up a match, and yes you might be ...
D Stanley's user avatar
  • 136k
20 votes

How much money do I need to retire?

Generally, it is recommended to use 4% initial withdrawal. That gives you a 99% chance to make it through 30 years, using up the capital in the process. So unless you plan to die in 30 years, that's ...
Aganju's user avatar
  • 37.7k
20 votes
Accepted

What professional should I seek out to get financial advice on how to make ends meet with my current budget, expenses, and retirement accounts?

Most of the people that describe themselves as financial advisors are investment advisors; they can help you invest your money for retirement, but are generally not prepared to help you with budgeting ...
Ben Miller's user avatar
  • 116k
17 votes
Accepted

Conservative ways to save for retirement?

A 401(k) is just a container. Like real-world containers (those that are usually made out of metal), you can put (almost) anything you want in it. Signing up for your employer's match is a great ...
user's user avatar
  • 4,609
17 votes
Accepted

Is this a reasonable financial plan? - Spend all of your money every few years?

Some employers actually support a lifestyle similar to this in form of allowing "sabbaticals". It usually works like this: Over a course of a few years, you either work extra hours or take a paycut. ...
Philipp's user avatar
  • 23.9k

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