The Complete Retirement Planner Blog

The Possible Pitfalls Of A Roth IRA Conversion

The advantages of having a Roth IRA are clear: • Since contributions to a Roth IRA come from after-tax dollars, those savings grow tax free.• Contributions and earnings can be withdrawn tax free after age 59 1/2. • Contributions can be withdrawn tax free at any age.   Earnings withdrawn before age 59 1/2 will incur taxes and a 10% penalty.• A first-time home purchase ($10,000 maximum), college expenses, and birth or adoption expenses qualify as  exceptions to the rule concerning withdrawals before age 59 1/2.• Required Minimum Distributions (RMD's) are not required.With these advantages, however, come some limitations. A...

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Using Monte Carlo Simulations For Retirement Planning - Fool's Gold?

If you’ve ever spoken with a financial adviser about retirement, they probably suggested running a Monte Carlo simulation program to help determine how financially prepared you are. These programs randomly combine historical outcomes (annual market returns for the most part) with personal financial data to arrive at a probability of success (i.e. that you won’t run out of money in retirement). Telling clients that they have run thousands of scenarios to arrive at this information sounds like they have really worked hard to earn their money. But there are a few problems. To begin with, not all of these programs...

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3 Of The Most Common Half-Truths In Retirement Planning

There are countless articles written every day offering insights and advice about financial/retirement planning. With so much information available you would think that anyone interested in reading those articles could easily become an expert (near expert?) on the subject. The problem - and I'm sorry to say this - is that many of the people writing those articles are hardly well informed on the subject. Many have no financial credentials and are just cobbling together random quotes from their sources and presenting generalizations and half-truths as "rules" and best practices to follow. This makes it difficult to distinguish between what...

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The Number One Rule Of Retirement Planning

Retirement planning can certainly be overwhelming. With articles written daily offering suggestions about how much to save, how much to withdraw annually from retirement accounts, how to choose when to claim Social Security, diversifying investments, whether or not to pay off a mortgage before retiring, etc., it can be tough to know where to start. Since you are reading this, you're headed in the right direction. However, while gathering information is important, the real goal is to take concrete steps towards being financially secure. You can delay retirement itself, delay claiming Social Security, and delay re-balancing your portfolio, but don't...

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Will You Be Affected By IRMAA?

If you are unfamiliar with IRMAA, and how it may affect you, it could end up costing you a lot of money. IRMAA is an acronym that stands for Medicare's Income Related Monthly Adjustment Amount. This "adjustment" can cause an increase in your Medicare premiums for Part B and Part D. It is based on your most recent tax return supplied to Medicare by the I.R.S and specifically looks at your Modified Adjusted Gross Income. In most cases this may be a tax return from 2 years ago (or 3 years ago if the return from 2 years ago is...

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