What Do Bond Ratings Mean?
Bond ratings gauge a bond issuer’s financial ability to repay its promised principal and interest payments. Ratings are based on an analysis of the issuer’s financial condition and creditworthiness. In essence, the higher the rating, the more likely it is that a bondholder will receive his or her principal again when the bond matures. Credit […]
What Is a Roth IRA?
Roth IRAs are tax-favored financial vehicles that enable investors to save money for retirement. They differ from traditional IRAs in that taxpayers cannot deduct contributions made to a Roth. However, qualified Roth IRA distributions in retirement are free of federal income tax and aren’t included in a taxpayer’s gross income. That can be advantageous, especially […]
Save Now or Save Later?
Most people have good intentions about saving for retirement. But few know when they should start and how much they should save. Sometimes it might seem that the expenses of today make it too difficult to start saving for tomorrow. It’s easy to think that you will begin to save for retirement when you reach […]
How Should I Manage My Retirement Plan?
Employer-sponsored retirement plans are more valuable than ever. The money in them accumulates tax deferred until it is withdrawn, typically in retirement. Distributions from a tax-deferred retirement plan such as a 401(k) are taxed as ordinary income and may be subject to a 10% federal tax penalty if withdrawn prior to age 59½. And contributions to […]
What Is a 401(k) Plan?
A 401(k) plan is a self-directed, qualified retirement plan established by an employer to provide future retirement benefits for employees. Employee contributions are made on a pre-tax basis, and employer contributions are often tax deductible. If you have a Roth 401(k) option, contributions are made with after-tax dollars, but qualified distributions after age 59½ are free of […]
What Is a Traditional IRA?
Traditional individual retirement accounts (IRAs) can be a good way to save for retirement. If you do not participate in an employer-sponsored retirement plan or would like to supplement that plan, a traditional IRA could work for you. A traditional IRA is simply a tax-deferred savings account that has several investing options and is set up […]
What Are My Retirement Plan Distribution Options?
When it comes to receiving the fruits of your labor — the money accumulated in your employer-sponsored retirement plan — you are faced with a few broad options. Should you take the payout as systematic payments, a lifetime annuity, or a lump sum? Systematic withdrawals Some retirement plans may allow you to take systematic withdrawals: […]
What Is an Indexed Annuity?
If you want to limit potential losses while participating in the potentially attractive returns of a market-driven investment but would also like a guaranteed return, an indexed annuity might be worth checking out. The performance of indexed annuities, also referred to as equity-indexed or fixed-indexed annuities, is tied to an index (for example, the Standard […]
What Is a Self-Employed Retirement Plan?
A self-employed retirement plan is a tax-deferred retirement savings program for self-employed individuals. In the past, the term “Keogh plan” or “H.R. 10 plan” was used to distinguish a retirement plan established by a self-employed individual from a plan established by a corporation or other entity. However, self-employed retirement plans are now generally referred to […]
How Can I Estimate My Future Social Security Benefits?
Estimating your future Social Security benefits used to be a difficult task, but not any longer. For an estimate of your projected benefits, go to www.ssa.gov/estimator. The retirement estimator gives estimates based on your actual Social Security earnings record. The website form will ask you for a number of facts, including your name, Social Security number, […]