The Flyer:

Social Security has gotten a lot of attention in the media recently. As a result, I answer questions from clients regularly that primarily ask, “Will Social Security exist when I retire?” The answer is yes, of course, for two main reasons: 1) The federal government owns a printing press for currency as was demonstrated spectacularly during the COVID crisis; and 2) the younger workers (which is a rather large group of people making more money than you did) are paying more into the system. Thus, it is important to be aware of the rules that surround your benefit. Too often, folks file for Social Security without doing any planning whatsoever. We cannot stress enough the importance of understanding how your benefit will impact you.

In 2022, we celebrated the 25th anniversary of the Roth IRA account type. We recommended them to clients for the entirety of their existence because of their potential for excellent tax savings and liquidity. It was an uphill climb for a very long time; but after years of pontificating, we finally see a general recognition of the account type and a new interest in utilizing it among our existing and prospective clients. Unfortunately, for the first time in the history of the Roth IRA, Congress is threatening to create new restrictions. This makes it even more important to include Roths in your retirement planning sooner than later.

Most of our clients who read this blogpost title are thinking, “Where is Danielle, and what have you done with her?” Before I answer that question, let’s go over a few terms you need to keep in mind while reading this blogpost: Pre Tax Savings: Retirement accounts like Traditional 401ks and IRAs where contributions (deposits) were not taxed by the IRS. Instead, taxes are assessed on future withdrawals. SS: Short hand for Social Security Income Roth IRAs: Retirement accounts where the contributions are taxed before they are deposited. Those deposits and their earnings, if all rules are followed, are tax free upon withdrawal. Taxable Brokerage Accounts: Nonretirement accounts like bank checking, savings, and brokerage accounts that allow post-tax deposits and are taxed only on the earnings in the year in which they are received.

In our Ask an Expert Series, the Financial Advisors of Propel address common misconceptions, mistakes, and missing information we see in media stories. As part of our continuing effort to dispel some myths or half-truths you might read on the internet, this blogpost directly responds to an article published by Forbes online titled “Rolling Over a 401(k) to an IRA Can Cost You Thousands of Dollars” by Bob Carlson and published on July 21, 2022.

In our Ask an Expert Series, the Financial Advisors of Propel address common misconceptions, mistakes, and missing information we in media stories. Recently, the New York Times ran an article about the difficult decisions that retirees are struggling with when forced to make a withdrawal from their IRA accounts: “When You’re Forced to Cash Out in a Bearlike Market”.

This year we celebrate the 25th anniversary of the Roth IRA account type. We recommended them to clients for the entirety of their existence because of their potential for excellent tax savings and liquidity. It was an uphill climb for a very long time; but after years of pontificating, we finally see a general recognition of the account type and a new interest in utilizing it among our existing and prospective clients. Unfortunately, for the first time in the history of the Roth IRA, Congress is threatening to create new restrictions. This makes it even more important to include Roths in your retirement planning sooner than later.