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Retirement Planning Archives | Wealthspire

401(k)

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What is a 401(k) Retirement Plan? A 401(k) is an employer-sponsored retirement plan that allows employees to defer a portion of their wages to individual accounts. Generally, contributions to the plan are made on a pre-tax basis. However, some employer-sponsored plans allow for after-tax, or Roth 401(K) deferrals. Employers may also match their employees’ 401(K) deferrals up to a certain amount. Annual contributions are typically limited up to a maximum amount allowed by the IRS. What Should I Do With My Old 401(k)? When deciding what to do with an old 401(k), there are typically four options, each with pros…
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Required Minimum Distribution

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What is RMD Required Minimum Distributions (RMDs) are withdrawals that the IRS requires you to take from tax-deferred accounts (such as IRAs) each year. These withdrawals can be done in a lump sum, or can be taken out gradually over the year, but the RMD must be reached by December 31st of that year. You must begin taking RMDs by April 1st of the year following your 72nd birthday and then annually thereafter. The RMDs are taxed at ordinary income tax rates. See more about RMDs on the IRS website. How Do I Calculate my Required Minimum Distribution? You can calculate your…
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IRA

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What is An IRA? An Individual Retirement Account (IRA) is an account that allows you to save for retirement through tax deferred (traditional) or tax-free (Roth) growth. Traditional IRA vs. Roth IRA A traditional IRA allows you to contribute pre-tax income directly into your retirement account. This is called tax-deferred because instead of paying taxes currently, you’ll pay (income) taxes when you withdraw money out of the account. Roth IRA A Roth IRA allows you to contribute income that has already been taxed. This means that as you grow your money in your Roth IRA, you will not have to…
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retirement calculator

Retirement Calculator Test Drive: Which Will Work Best for You?

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Estimating Your Retirement Needs with an Online Calculator Beginning the process of making retirement contributions is a big step for anyone. Today, proper retirement planning seems more important than ever, but where do you begin to crunch numbers? For many, an online retirement savings calculator offers an anonymous, low-commitment method to obtain the basic estimates you need to get started and know how much money you need to retire comfortably. More than just providing one metric, retirement calculators can provide a lot of useful information about how to achieve that desired nest egg amount. From adjusting your risk profile to…
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