If you’re approaching or already in retirement and your fear of outliving your savings steadily grows, consider this: You pay a premium to an insurance company and in return a lifetime income kicks in when you turn a certain age. But the aging buyer should beware: These products often work in only limited circumstances and often just prey on your fears.
Over your career, you will probably face a year or more with limited income. Believe it or not, these situations present powerful savings opportunities, generally only for a limited time. Here’s what to know to take advantage, especially regarding your taxes.
Many boomers keep most savings in either 401(k) plans or traditional individual retirement accounts. If you’re in this generation, born between 1946 and 1964 and with a few working years remaining before retirement, consider converting your IRA to a Roth.
As any parent knows, dependents are tax deductible. However, letting your children file on their own can create significant tax saving opportunities if you are subject to rules that limit many traditional tax breaks.
Though the ink’s barely dry on your return for 2014, getting an early start on tax planning for 2015 can save you both money and stress next April. Here are five techniques to keep in mind.
1. Tax-loss harvesting. If you already realized a large capital gains tax in 2015 or anticipate one later this year, this tactic might help. Loss harvesting involves selling an investment at a loss and simultaneously buying a similar, substitute investment.
No one likes to pay taxes. Although they are one of the two certain things in life, you want to do all you can to reduce this burden. The ways to achieve that is through investing long term in mutual funds specializing in broad asset classes and using tax-managed funds.
If you want to leave a lot to charity, you can use a couple of tools in your estate planning – one of which is the pricey and time-consuming job of launching your own Rockefeller Foundation. Another method, though, might save you a lot of money and effort: a donor advised fund.
With 2014 well over and the spring of 2015 looming, you may find yourself gathering all of last year’s tax information and getting ready to file your income taxes. Maybe you expect a refund or maybe you dread writing a check to Uncle Sam. If the latter, here are some tips to reduce your tax burden for 2015.
Being a proactive investor means paying attention to more than just your investments’ fees and expenses. What your dividends yield is very important. And their tax situation is, as well, as dividends are taxable income.
Every possible tax deduction can help when your money is tight. Yet many available legal deductions go unclaimed each year simply because most taxpayers still don’t know the breaks exist. From eyeglasses to airline baggage fees, you might qualify for at least one often-forgotten deduction – and maybe more than one.