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A New Year's Checkup for Financial Success in 2020 and Beyond

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As 2020 kicks off, it’s a great time to make sure your savings and investments are aligned with your goals and not creating unnecessary taxes. Here are some key steps.

You can do it at any age, but it’s especially important in your 50s and 60s. Many people can calculate it themselves using a retirement calculator on the web. Searching for “retirement income calculator” will give you a number of choices.

If you don’t feel comfortable doing this, consider hiring a well-qualified financial planner who can give you an unbiased figure.

Once you’ve got an estimate, you can start structuring your savings to produce the necessary income. While savings accounts and stocks can produce income, the income stream they produce varies.

Only three things offer a guaranteed lifetime income: a traditional employer-provided pension (which is rare now), Social Security and a lifetime income annuity. The latter allows you to create your own pension by converting a portion of your savings to a stream of income. It serves as longevity insurance.

If you’re holding all your savings in taxable accounts, you probably have an opportunity to reduce your taxable income by moving some money to tax-free and/or tax-deferred accounts.

Contributing to tax-deferred retirement accounts, such as a 401(k) or a standard IRA, or to a tax-free Roth IRA is the first line of defense. If you can afford to set aside additional money for the........

© Kiplinger