We make gift lists for friends and loved ones, so why not a list of gifts for our future selves? At its heart, financial planning is a list of things you can do today to improve your future.
Continue readingA Holiday Gift List for Your Future Self
Break Down Your Pay Stub and Learn the Importance of Pre-Tax Savings
Understanding the breakdown of your pay stub will help you better understand your tax withholding and optimize your savings. So here is a breakdown of the major items in your paystub, from your gross pay to your take home income. Everyone is different, so little differences may apply to you.
Continue reading2021 Year-End Tax Planning Tips For Business Owners
As we approach the year-end and get ready for the holidays, let’s consider doing some tax planning for 2020 and beyond. This year, we break our discussion of year-end tax planning into two parts. We cover some business tax planning tools in this post, and continue with individual tax planning in the next post.
Continue readingHow to save for retirement without a company sponsored plan
A common piece of advice is to start saving for retirement early and do it through your employer plan, like a 401(k) plan or similar. Employer-sponsored plans are tax-advantaged and the employer typically matches at least a portion of your contribution. The common advice is great advice if you work for a company that offers such a plan. But what if you are self-employed or work for a company that does not offer a retirement plan? What can you do then?
Continue readingCreate a tax-Efficient Investment Plan With These Tips
High investment costs are the most reliable predictor of poor investment performance, and investment taxes are often the largest component of such costs. Left unchecked, the performance drag due to taxes can compound to substantial amounts.
While you can’t eliminate taxes, there is some good news for investors: the effect of taxes on performance is largely under your control.
A few principles when selecting your investments can go a long way in reducing the tax drag and increase the efficiency of your savings over time.
Continue readingNow Is A Great Time to Get a Paycheck Check-Up
End of summer is a great time to review your paycheck against the taxes you may owe the IRS for the year. One very useful tool on the IRS site is their Withholding Estimator. If you are a W-2 employee, I suggest you use it now to estimate your tax liability and see if you are with your taxes for the year. Don’t wait.
Continue readingLearn the Basics of Investment Taxation from a Wealth Advisor Near Me, and Start Investing More Efficiently
As you probably know, virtually any monetary earnings or gains in your life are taxable, and investment earnings are no exception. First, if you are getting taxed on your investments, it generally means you have made gains. And, while not as good as gains, investment losses can be used to offset other gains or income, therefore reducing your taxes.
Continue readingUnderstand The Social Security Tax Torpedo And What You Can Do About It
The interaction between the taxation of Social Security and other sources of retirement income can make your marginal tax rate jump in unexpected ways, even above the 37% rate, and at relatively low-income levels, an effect called the Social Security “Torpedo.” Avoiding the torpedo should be part of an efficient retirement withdrawal strategy. To do that, let’s review some basics of Social Security taxation.
Continue readingTake Advantage of These Features of Your Employer Retirement Plan to Maximize Your Savings
More and more plans offer the ability to make Roth and after-tax contributions. But what are these options and when does it make sense to use them?
Continue readingThe Economics of Tax-Efficient Spending In Retirement and How to Apply it to Your Plan
A key goal when you retire is to generate a steady level of spending and not run out of money too soon. For many, the retirement spending strategy involves a combination of social security, taxable accounts (T), tax-deferred accounts (TD) like 401(k)s or IRAs, and tax-exempt accounts (TE) like Roth accounts. Because of the different taxability across accounts, how you withdraw from them can make an important difference to the level and longevity of your retirement spending. Research shows large differences in ending account balances or expected number of sustainable years across different strategies.
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