What a year it has been! As we say goodbye to 2019, here’s a look back at the Top 10 personal finance posts on The Astute Advisor blog. Hopefully you find some of these articles helpful. I love reading your comments and feedback. Please don’t hesitate to reach out. You can reach me via email through this site or look for me on Facebook, LinkedIn, and Twitter.
Top 10 Personal Finance Posts From 2019
The SECURE Act (Setting Every Community Up for Retirement Enhancement) is now the law of the land. If there's any constant in retirement planning, it's change. As soon as you make financial plans based on current laws, they change. This legislation, signed into law with only days left in 2019, will have significant changes in 2020. Retirement savers should take note.
IRA beneficiary designations specify who should receive your retirement account funds if you are to pass away. But there's much more to it than that. Despite the importance of naming beneficiaries, it is often at the bottom of the to-do list.
The IRS loves it when you turn 72, but you won't get a gift or even a card. The Internal Revenue Service can't wait to get their hands on your hard earned dollars. This might be why the IRS is sometimes referred to as the Infernal Revenue Service. Happy birthday and get ready to pay more taxes thanks to three little letters, RMD.
UTMA accounts provide a way to gift money to minor children. Contributing funds to UTMA accounts constitutes an irrevocable gift. Once you gift the funds, they must be managed for the benefit of the minor and you cannot change the beneficiary. However, there is a lot of flexibility with this type of account.
Tax-deferred vs Tax-free is a concept that is key to making good financial planning decisions. Most retirement accounts fall into these two categories. It's critical to know which ones are which. It is also worth noting, this concept applies to more than just retirement accounts. Choosing which investment account to use for health and education planning requires a solid understanding of tax-deferred vs tax-free as well.
Canceling PMI can save you thousands. If you own a home and you put less than 20% down, it's likely you have Private Mortgage Insurance, or PMI. This is insurance that you, the borrower, pays to protect your lender if you default on your mortgage. Stated another way, the loan-to-value ratio (LTV) is too high and there isn't enough home equity.
A Roth IRA conversion and Roth IRAs in general can be powerful tools in a retirement saver's toolkit. The potential to accumulate a bucket of funds to be used tax free in retirement is very attractive. This is especially true when you realize how much of your 401(k) or Traditional IRAs will be taxed in the future.
If you're a public school teacher in California, there's a lot to consider when saving for retirement. Teachers have more choices than employees in the private sector and the options can be confusing. In addition to some of the nuances involved with CalSTRS and Social Security, many teachers are eligible for 403(b) and 457 plans.
CalSTRS won't be enough for your retirement and I know that sounds harsh. While having a pension can bring a sense of comfort, teachers must resist this false sense of security. Relying on your teacher's retirement pension alone might be harmful to your financial health.
The ability to save in a Roth 401k has been around since the Pension Protection Act of 2006. This act allowed businesses (plan sponsors) to offer employees the option to defer their after tax salary into an account that will allow for tax free withdrawals in retirement.