AAII Survey: How Readers Would Change the U.S. Tax Code

After weeks of speculation, Congressional Republicans unveiled their tax reform legislation late last week. Among the items it didn’t include was a cut to contribution limits to 401(k) retirement plans, a move lawmakers were reportedly considering to help balance the tax cuts planned for high-income earners and businesses. According to the language in the tax reform proposal, it…

 

Limiting Required Minimum Distribution Costs

The IRS requires that funds be withdrawn from nearly all retirement accounts, including traditional IRAs, 401(k) plans, and SEPs. These withdrawals are known as required minimum distributions, or simply RMDs. Once a retiree turns age 70½, the withdrawals must be made annually. (Roth IRAs are notably exempt from this rule, and a retiree has until…

 

Tax-Effective Ways to Make Charitable Donations

Today is Giving Tuesday, a day designated to promote donations to charitable organizations. Donating to charity is first and foremost an act of altruism. The tax code rewards such acts. The tax code allows those who itemize to deduct donations to qualified charitable organizations. Receipts are required for all cash contributions. Contributions of $250 or…

 

Quest for Supplemental Income, Love of Job Main Reasons for Working in “Retirement”

Over the last couple of decades, the definition of “retirement” has changed significantly. Gone are the days that 30 years of service to a company meant a gold watch and company-funded pension upon retirement. Today, the burden of funding retirement, for the most part, has shifted to the individual in the form of defined-contribution plans…

 

AAII Journal October 2016 Issue

The October 2016 AAII Journal is Now Available Online. Feature Article: What the Evolving Robo Advisory Industry Offers Acquisitions and new, large entrants have altered the competitive landscape, but robo-advisors continue to focus on providing low-cost portfolio management services.   Also in This Issue: Portfolio Strategies: Active Management Stinks, But It Doesn’t Have To Active approaches…

 

The Impact Returns Have on How Much You Should Save

One of the fuzzier numbers in retirement planning is how much a person should save. Put another way, how much does an individual need to set aside each year to fund retirement expenses? It’s a function of projected expenditures, sources of other income (e.g., Social Security, inheritance, etc.) and expected investment returns. Though they are…

 

Retirement Can Be Long Enough for Something to Go Haywire

An interesting point was brought up at this week’s CFA Institute’s Financial Analysts Seminar: retirement is a long enough period of time for something to go haywire. The point was brought up by Barton Waring, a retired chief investor officer for Barclays (which is now BlackRock). He raised the topic during a discussion about retirement…

 

Creating and Following a Real Financial Plan

This week’s AAII Weekly Digest highlights these “must-read” AAII articles: IRA Rollover Chart: Rules Regarding Rollovers and Conversions This article provides a helpful chart, adapted from the Internal Revenue Service (IRS), that shows what types of retirement accounts can be rolled over or converted into another type of retirement account.   Life After Loss: 6 Smart…

 

Think Twice Before Making Your Own Market (Br)exit

There is an old investing adage: “the market is always right.” Investors would be wise to question this adage in light of last week’s Brexit referendum. If the market is always right, then why were traders bidding stocks up as the British were voting to leave the European Union? For that matter, why did stocks…