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☆ State-run 'auto-IRA' programs aim to close retirement savings gap
▼ + stars: | 2024-01-04 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

They save about $165 a month, on average, said John Scott, director of Pew's retirement savings project. It's unclear how many other companies instead opted to sponsor their own 401(k) plan or other workplace plan. Why states are stepping inThere's a common thread here: A realization that people aren't saving enough for retirement, Scott said. The typical saver age 55 to 64 has just $71,000 of 401(k) savings, according to Vanguard data. Pew estimates that state spending will rise by $334 billion from 2021 to 2040 due to insufficient retirement savings.

Persons: John Scott, Scott, Pew, Washington —, Roth, they've Organizations: Auto, Workers, Trusts, Center for Retirement, Companies, Vanguard, Social Security Locations: Delaware, Hawaii , Maine, Minnesota , Nevada , New Jersey , New York, Vermont, Massachusetts , Missouri, New Mexico, Washington, U.S

☆ New change to 529 college savings plans has ‘so many caveats,’ advisor says. Here's what to know
▼ + stars: | 2024-01-03 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Nancy Ney | Photodisc | Getty ImagesThe downsides of 529-to-Roth IRA rolloversThe biggest downside of a 529-to-Roth IRA rollover is the conversion counts toward your annual IRA contribution limit, which may stunt future growth across both accounts, according to Loyd. "If my kids are pulling money from their 529 to make Roth contributions down the road, Daddy's not going to be happy." If my kids are pulling money from their 529 to make Roth contributions down the road, Daddy's not going to be happy. There's a lifetime cap of $35,000 for 529-to-Roth IRA rollovers, which means it would take five years of $7,000 conversions to reach the limit. Generally, it's better to keep the money growing in a 529 plan and contribute to a Roth IRA separately because you can change 529 plan beneficiaries, Loyd said.

Persons: Nancy Ney, Photodisc, Roth, Loyd, John Loyd, There's, Jim Guarino, Baker Newman Noyes Organizations: Roth IRA Locations: Daddy's, Woburn , Massachusetts

☆ Financial Gift Ideas for Any Age
▼ + stars: | 2023-12-01 | by ( Nick Fortuna | ) www.wsj.com time to read: 1 min

Seeding a ‘529’ college-savings plan for young children or a Roth IRA for teenagers can give your loved ones a leg up. Illustration: Alex NabaumU.S. consumers entered this holiday season planning to spend an average of $654 on gifts, with the likeliest purchases going to gift cards, vacation and travel, and toys and games, according to the Conference Board Holiday Spending Survey. Instead of giving these traditional gifts, wealth advisers say a financial-related gesture or present might be the best gift of all—the one that keeps on giving. Even small financial gifts can help to position young people for success or help seniors to enjoy their retirement, financial advisers say.

Persons: Roth, Alex Nabaum Organizations: Conference

Most grandparents offer some form of financial help to their children and grandchildren. Between inflation, rising housing costs, and increasing interest rates, it makes sense that grandparents and parents may want to help support their children and grandchildren financially. If parents weren't supporting their adult children, they'd have almost $3,000 more annually to put into their retirement funds, that same research found. Studies show that many grandparents are sabotaging their own financial future to help their adult children and grandchildren." Or grandparents might consider cohabitating with adult children and grandchildren to save money.

Persons: —, I'd, Cyrus Bamji, Savings.com, Bamji, it's, there's, Baby Boomers, Roth Organizations: Service, Alliance, Lifetime, AARP, Alliance for Lifetime

High-yield savings accounts, CDs, and I Bonds are good options depending on how soon you want to buy. As a financial planner, I have seven creative ways to save for a first home down payment. Automate monthly contributions to a high-yield savings accountOne of the easiest ways to grow your home down payment is to save in a high-yield savings account. Currently, many high-yield savings accounts are offering 4% to 5% or higher. Set up automatic transfers from your checking account to this high-yield savings account.

Persons: —, Roth IRAs Organizations: Service

☆ How to make your money work for you over the next decade
▼ + stars: | 2023-11-28 | by ( James Faris | William Edwards | ) www.businessinsider.com time to read: +16 min

"If there is a regime shift, then what has worked could be quite different from what does work," McLennan said. That means the growth stocks that dominated for years may come back to earth in the mid-2020s. He also recommends that investors diversify away from growth stocks that thrived under low rates and instead broaden out to value-oriented names. Valuations explain 80% of a stock's returns over a decade, according to Bank of America. Smead sees energy in stocks in Canada also outperforming in the coming decade, as well as European banks.

Persons: —, Peter Bates, Rowe Price, Damanick Dantes, We're, Dantes, you've, He's, Matt McLennan, McLennan, Kimball Brooker, Morningstar, Nicola Stafford, Stafford, it's, Molina, Bates, Russell, Cole Smead, that's, Phillip Colmar, Colmar, Bob Doll, Doll, Smead, Michael Sheldon, Sheldon, who's, there's, Chris Chen, Chen, Roth Organizations: Service, Business, Global, International, McLennan, First Eagle Global Fund, Eagle Investments, Goldman, Asset Management, Stock, Molina Healthcare, Vanguard Value, Healthcare, Bank of America, Comerica Wealth Management, MRB Partners, Canadian, Crossmark Global Investments, BlackRock, Energy, P Bank ETF, RDM Financial, Social Security, Social, Insight Financial, Trust, IRA Locations: Canada, Colmar, United States, Canadian, Europe, Treasuries

The idea of investing has always terrified me, because I worry that I don't know what I'm doing. The idea of investing my money used to absolutely terrify me. We all have our own reasons, but I know I'm not the only person who's approached the stock market with trembling hands. The average stock market return is about 10% every year. After maxing out my Roth IRA, I started putting money into a brokerage account, specifically investing in index funds.

Persons: —, wasn't, I've, I'd, who's, She's, she's, Get, it's, Roth Organizations: Service, SEC, IRA, Roth IRA

You don't have to be wealthy to start investing — $100 is a perfectly fine amount to tuck away. We asked five financial planners how best to invest that $100 and they suggested Roth IRAs and more. To prove this, Insider spoke with five certified financial planners, each offering advice for how they'd invest a simple $100. Fill your health savings accountFrank McLaughlin, a financial planner with Merriman, agrees with Botto that a Roth IRA is the best place to invest $100. "If you're looking to invest in your future, what future do you want to invest in?"

Persons: Roth IRAs, —, you've, Wesley Botto, Botto, Roth, Cynthia Meyer, Meyer, Frank McLaughlin, Merriman, McLaughlin, Get, Tania Brown, Brown, it's, Laurie Nardone, Shira Organizations: Service, Films, Cornerstone Financial, IRS, Invest, Real, SEC, SaverLife, Wealth Management

☆ How to prepare for the 'survivor's penalty' before a spouse passes
▼ + stars: | 2023-11-11 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

Nosystem Images | E+ | Getty ImagesMany older women outlive their spouses and may not expect higher future taxes after suffering from the loss. As a result, many married women eventually face a "survivor's penalty," resulting in higher future taxes, according to certified financial planner Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts. watch nowTypically, the surviving spouse inherits the deceased spouse's individual retirement accounts and so-called required minimum distributions are about the same. But the surviving spouse now faces higher tax brackets, Gagliardi explained. Review investment accountsIt's always important to keep account ownership and beneficiaries updated, and failing to plan could be costly for the surviving spouse, Jastrem said.

Persons: Edward Jastrem, —, Donald Trump's, George Gagliardi, Gagliardi, Roth, Jastrem Organizations: Getty, Centers for Disease Control, Heritage Financial Services, Coromandel Wealth Management, Wealth Locations: Westwood , Massachusetts, Lexington , Massachusetts

Advantages to opening multiple savings accountsOne benefit of opening multiple savings accounts is that you can save money for specific goals. Traditional savings accounts at a brick-and-mortar bank typically offer lower savings account interest rates than high-yield savings accounts at online banks. Disadvantages to opening multiple savings accountsOpening up multiple savings accounts also comes with several potential disadvantages. Tips for managing multiple savings accountsIf you decide to open multiple savings accounts, here are some tips for managing them:Keep track of your accounts. Multiple savings accounts: FAQsIs it OK to have multiple savings accounts?

Persons: Mike Landsberg, Homrich, it's, Jaime Eckels, Plante, Roth IRAs, Eckels, who's, Landsberg, Banks, Get Organizations: CPA, CFP, CPWA, Homrich Berg Wealth Management, Financial, FDIC, SEC, Bank Locations: Landsberg, Chevron

If you're investing your first $1,000 for maximum growth, try putting your cash in a Roth IRA. Financial planners also recommend choosing index funds or dividend growth stocks. Here's some advice from financial advisors on the four best ways to invest your first $1,000. Go with dividend growth stocksKeep an eye out for dividend growth stocks, which are stocks that are paying dividends and have been growing those dividends for a significant number of years in the past. According to Jonathan P. Bednar, II, a financial planner, dividend growth stocks are a smart way to make money now or use those dividends to reinvest.

Persons: —, I'm, Kenny Senour, Senour, Roth, Read, Jonathan P, Tony Grenier, Grenier Organizations: IRA, Financial, Service, Invest

If you have all or most of your money in a single investment account, you're missing opportunities to build wealth. If you're serious about building wealth, there are seven types of accounts you need to have to make it happen. If you're making estimated quarterly tax payments, you'll need to accumulate funds in your tax savings account as you earn them. Note that a "tax savings account" is not a different banking product — it's just a designated use for a savings account, like an emergency fund would be. (Like the tax savings account, this isn't a different product your bank offers — it's a specific use for an account like a high-yield savings account.)

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Bottom line: Fidelity Investments and Charles Schwab are two of the best robo-advisors for retirement savings, goal-building, and low-cost trading. Fidelity vs. Charles Schwab: The Biggest DifferencesFidelity and Charles Schwab are featured in a number of our guides, including the best brokerages for beginners. Fidelity Investments reviewAutomated Investing With FidelityFidelity offers two different automated accounts: Fidelity Go and Fidelity Personalized Planning & Advice. Charles Schwab Brokerage Account reviewAutomated Investing With Charles SchwabLike Fidelity, Charles Schwab's automated accounts — Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium — also include an automated-only account and an automated-plus-advice option. Fidelity vs. Charles Schwab — Frequently Asked Questions (FAQs)Is Fidelity better than Charles Schwab?

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☆ Gen Z is the most financially savvy generation
▼ + stars: | 2023-11-06 | by ( Eve Upton-Clark | ) www.businessinsider.com time to read: +12 min

AdvertisementAdvertisementIn a May survey from the CFA Institute, a global trade association for investment advisors, more than half of Gen Z respondents said they were already investing, and 82% of American Gen Z investors said they began investing before they turned 21. And while there are plenty of pitfalls and missteps that could plague young people along the way, Gen Z is shaping up to be the most financially savvy generation yet. The estimated $60 billion wipeout caused many Gen Z investors to lose big. AdvertisementAdvertisementWhile Gen Z may not always be drawn to the safest investment choices, it's certainly getting some hands-on learning. In many respects, Gen Z is coming of age at a good time, graduating into a booming job market with strong wage growth.

Persons: Gen, Gen Zers, Gen Xers, Zers, It's, —, they'd, stashing, Gen Z, Erin Lowry, Z, there's Venmo, Lowry, Charlie Pastor, finfluencers, Pastor, Taylor Price, Price, it's, I'm, Eve Upton, Clark Organizations: CFA Institute, Federal Reserve's Survey, Consumer Finances, Transamerica Center, Retirement Studies, PayPal, YouTube, CFA, IRA, Interactive, UK Royal Mint, Barclays Smart Investor Locations: Canada, Chipotle, BlackRock

☆ Are you financially illiterate? Suze Orman says 'probably 95%' of Americans are
▼ + stars: | 2023-11-03 | by ( Ryan Ermey | ) www.cnbc.com time to read: +5 min

When asked by Wallace what percentage of Americans she thought were financially illiterate, she said, "Truthfully, probably 95%." So-called "traditional" accounts, including 401(k)s and individual retirement accounts, give you a tax break up front. Because you fund these accounts with money you've already paid taxes on, your contributions don't count against your taxable income. Contributions to these accounts are made with after-tax money, but investments in them grow free from federal or state tax. You can contribute to any state's plan — and each plan comes with different investing options — but you'll generally only receive tax benefits, if they're offered, by investing in your home state's plan.

Persons: Suze Orman doesn't, Suze, Orman, Chris Wallace, Max, Orman —, Wallace, here's, Roth, you've, Sheryl Garrett, Powers, they're Organizations: Garrett Planning Network, CNBC, Internal Revenue

☆ IRS sets higher 401(k) and IRA contribution limits for 2024
▼ + stars: | 2023-11-02 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +3 min

Those same limits apply to 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan. IRA limits get a boost tooThe IRS also announced it was raising the IRA annual contribution limit to $7,000 next year, from $6,500 this year. If you contribute to a traditional IRA, you won’t owe income tax on your contributions the year you make them. Then when you start taking money from your IRA in retirement or before retirement, your withdrawals will be subject to income tax. Those cut-off limits rise to $240,000 (up from $228,000 today) if the spouse making the IRA contribution does not have access to a workplace plan but the other spouse does.

Persons: Roth, you’re, Roth IRAs Organizations: New, New York CNN, IRS, Roth IRA Locations: New York

401(k) contribution limits are increasing from $22,500 to $23,000 in 2024, and from $30,000 to $30,500 for those age 50 or older. IRA contribution limits are increasing from $6,500 to $7,000 in 2024, and from $7,500 or $8,000 for those 50 and older. Learn about the new 2024 contribution limits and how to make the most of these changes. 401(k) and IRA contribution limits in 2024Every year the contribution limits for individual and joint retirement savings plans increase as the cost of living in the US goes up. So if you're eligible, you can contribute an additional $7,500 to your traditional 401(k), Roth 401(k), 403(b), Thrift Savings Plan, and most 457 plans.

Persons: —, It's, there's, Roth, you'll, Robinhood Organizations: IRS, Service, Savings, IRA Locations: That's

The Biden Administration proposes a crackdown on "junk fees" in retirement savings plans. However, high expense ratios in your account may be cutting into your future retirement savings. But there are still some preventive steps you can take to minimize any potential "junk fees" in your retirement savings plan. 4 ways to lower 'junk fees' in your retirement planThe Biden Administration wants to crack down on "junk fees" in 401(k)s and other investment accounts. Until then, here are four steps you can take to lower fees in your retirement savings plan.

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☆ Here Are the 401(k) and IRA Contribution Limits for 2024
▼ + stars: | 2023-11-01 | by ( Aly J. Yale | ) www.wsj.com time to read: +2 min

401(k) contribution limits 2024For employer sponsored plans including 401(k), 403(b) and 457 retirement plans—as well as Thrift Savings Plans, a type of account for federal employees and military members only—the 2024 contribution limits will jump to $23,000. 401(k) contribution limits 2023 & 2024 2023 limit 2024 limit Maximum employee contribution $22,500 $23,000 Catch-up contribution (for those 50 and older) $7,500 $7,500 IRSIRA contribution limits 2024For individual retirement accounts, or IRAs—both Roth and traditional types—2024 contributions will max out at $7,000, up from $6,500 in 2023. IRA contribution limits 2023 & 2024 2023 limit 2024 limit Maximum contribution $6,500 $7,000 Catch-up contribution (for those 50 and older) $1,000 $1,000 IRSThe income levels used to determine eligibility for IRA contribution deductions and for making contributions to Roth IRAs are also changing. For IRA contributions limits depend on whether you or a spouse have access to a workplace retirement savings account. Finally, for individuals with SIMPLE retirement accounts—a type of IRA sometimes used by small businesses—the 2024 contribution limits will jump from $15,000 to $16,000.

Persons: Aly J, —, Roth Organizations: Yale, Internal, IRS

☆ You can save more than ever for retirement in 2024—here are the new contribution limits
▼ + stars: | 2023-11-01 | by ( Mike Winters | ) www.cnbc.com time to read: +1 min

If you're looking to max out your retirement savings, the contribution limits have been bumped up by $500 for most retirement savings plans in 2024, the Internal Revenue Service announced Wednesday. Contribution maximums will increase from $22,500 to $23,000 for 401(k), 403(b) and most 457 plans, as well as the federal government's Thrift Savings Plan, the IRS says. For those that don't rely on an employer-sponsored plan, the contribution limit on individual retirement accounts will also increase by $500 in 2024, from $6,500 to $7,000. More people will be able to make contributions to Roth IRA accounts, too. Qualifying income ranges have also increased for the retirement savings contributions credit and the amount of tax deductions you can claim for IRA contributions.

Persons: Roth Organizations: Internal Revenue Service, IRS

☆ IRS announces 2024 retirement account contribution limits: $23,000 for 401(k) plans, $7,000 for IRAs
▼ + stars: | 2023-11-01 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: 1 min

Andresr | E+ | Getty ImagesThe IRS has announced new 2024 investor contribution limits for 401(k) plans, individual retirement accounts and other retirement accounts. The employee contribution limit for 401(k) plans is increasing to $23,000 in 2024, up from $22,500 in 2023, and catch-up contributions for savers age 50 and older will remain unchanged at $7,500. The new amounts also apply to 403(b) plans, most 457 plans and Thrift Savings Plans. The agency also boosted contribution limits for IRAs, allowing investors to save $7,000 in 2024, up from $6,500 in 2023. Catch-up contributions will remain unchanged at $1,000.

Persons: Roth Organizations: IRS

A financial planner told me I need to understand how my retirement account is invested. I don't feel like I have the knowledge or time to be able to manage my retirement accounts on my own. However, Kovar said it's still important to keep a pulse on what's happening inside of those retirement accounts. Kovar recommended that people look at their retirement accounts every 6-12 months to determine how much risk they want to take on. Kovar recommended those with a 401(k) consider having a second retirement fund as well, so their investment options aren't limited.

Persons: —, it's, Taylor Kovar, Kovar Organizations: Service

☆ How to make an ultra-low-risk 5% return buying bonds
▼ + stars: | 2023-10-27 | by ( Filip De Mott | ) www.businessinsider.com time to read: +4 min

Returns from the Treasury market are growing more attractive with yields hovering near 5%, the highest since 2007. When the government has more trouble finding buyers for new Treasurys, yields will rise to attract interest. For instance, holders can't sell their bonds directly from a TreasuryDirect account. For greater access to the Treasury market, investors can turn to brokerages and some commercial banks, which act as the primary intermediaries of US debt. By using a broker to buy bonds in the secondary market, investors can also add Treasury assets into tax-free accounts, such as a Roth IRA.

Persons: —, Matthew Liebman, Roth Organizations: Treasury, Service, Federal Reserve, Investing.com, Amplius Wealth Advisors, Bloomberg Locations: Brokerages, TreasuryDirect

Our experts answer readers' investing questions and write unbiased product reviews (here's how we assess investing products). Then, know why you're investing, and understand the risk involved in any investment you make. As a certified financial planner, I speak with countless people who are new to investing. Whether you're a beginner or you've been investing for some time, watch out for these common investing mistakes. Before you dive in, be sure to cover the basics, understand the risk, and most importantly, have a plan.

Persons: —, you've, Roth, Roth IRAs, doesn't Organizations: Service

☆ Retirement withdrawal rules are 'crazy' this year, IRA expert says. Here's what you need to know
▼ + stars: | 2023-10-25 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

"They're crazy," said IRA expert and certified public accountant Ed Slott, describing the new RMD rules. For 2023, RMDs apply to both pretax and Roth 401(k) accounts, along with other workplace plans. Secure 2.0 bumped the RMD beginning age to 73 from 72 for pretax IRA owners and retirement plan participants. If you turn age 72 in 2023, you can delay RMDs until age 73. But if you turned 72 in 2022, you needed to take your 2022 RMD by April 1, 2023, and your 2023 RMD by year-end.

Persons: RMDs, Ed Slott, pretax, Roth, Slott, Ben Smith Organizations: Sdi, Financial Locations: Milwaukee

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