Transferring IRA money to a health savings account
Clients are allowed to make a one-time rollover from their IRA to a health savings account as long as they still qualify to make contributions to the account, according to this article from Kiplinger. The amount they can transfer is equivalent to the HSA's annual contribution limit, which is $3,400 for singles and $6,750 for couples. Seniors who have signed up for Medicare can no longer contribute to an HSA, but can make tax-free withdrawals from the account to pay for qualified medical bills.
'Granny pods' become a solution for retirees with limited budgets
Many cash-strapped retirees may opt for a "granny pod," a tiny house that can be built within a backyard, to remain independent while living close to their loved ones without moving to a house with hefty housing costs, according to this article on CNBC. Experts see these "granny pods" as a solution to address long-term care of baby boomers as they head into retirement. "If people can age in place and age at home it's much healthier, and the family is happier, but it can be very expensive. Granny pods can cost anywhere from $100,000 to $250,000. So you got to weigh longevity as part of the solution, says a financial planner.
Simple portfolios to get you to your retirement goals
Investors don't need to own too many mutual funds to build their retirement portfolio and make it diversified, according to this article from USA Today. Just a few mutual funds could be enough. “If you have a total U.S. stock market fund and you have a total international stock market fund and you have a total bond market fund, you are as diversified as you can get," says a money manager.
What are the required minimum distribution percentages
Making pretax contributions to retirement accounts means deferring the income tax bill on the money, as distributions are treated as taxable income, according to this article on personal finance website Motley Fool. Tax-deferred retirement accounts, such a traditional IRA and a 401(k) plan, are subject to required minimum distributions, which investors have to start taking when they reach the age of 70 1/2. The RMD amount will be based on their age, the life expectancy tables provided by the IRS, the value of the accounts that will be subject to RMDs, and their spouse's age.
Millennials: This is how to fix your money to get the retirement you want
Millennials should include retirement in their financial planning, but the concept should no longer be the same as how the generations before them conceived it, according to this article on MarketWatch. "It won’t be our grandparents’ experience of not working all of the time and playing golf…ours might involve continuing to work in some capacity,” says a financial planner in the article. “It may mean less entitlement programs and pensions. There is less certainty. We have to come to terms with the fact it will not look like it did in generations’ past."
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