Won’t you join me? I’m getting in the spirit! A little personal reflection for this fine holiday week.
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Month: November 2024
Some Tricks for Treating Yourself
Our brains are so good at getting used to things that they will keep chasing new pleasures, new experiences, and the next thing to bring us a boost. But research shows there’s more bang for our buck by treating ourselves more frequently, in smaller doses—and our wallets might thank us.
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Going for the Gold and Trying Again
What was your favorite part about the Olympics? Was it a specific event that caught your eye, a striking outfit? For us, it’s hard not to be blown away by the perfection among those gymnasts.
Watching the events, we may forget how much time and effort these athletes put into their trades. We only see the polished, precise versions of the routines, or the absolute fastest times or highest heights!
We aren’t there to watch them struggle on their way to perfection. We don’t see how many hours the athletes trained, the things they had to sacrifice. Sometimes it’s good to remind ourselves that we aren’t going to get it right the first time. We are going to fall down; it’s just a part of life.
The thing that sets us apart, though? What we do after we fail.
Olympic athletes don’t throw in the towel because they had a couple bad days at practice… and we shouldn’t either. We get back out there and try again!
Maybe some of us are not happy with the amount of money we have saved so far for retirement. Instead of giving up on the idea of saving all together, we can formulate a new plan. We can analyze the budget, start reallocating cash, take advantage of IRA contributions. We can take the time to invest in ourselves and our futures.
Maybe some of us have little ones at home and are starting to think about saving for their college education. We don’t have to save as much as we can, as fast as we can. There are investment options to help you contribute at your own pace, while putting the money to work to take advantage of that potential growth.
While the Olympics is a competition, saving for retirement or a life-changing event is not. We are all on different journeys, with different resources, at different points in our lives. There is not one perfect plan for all investors.
One thing we can learn from the Olympic gymnasts is their power of flexibility. (While of course they are physically flexible, we are talking about their mental flexibility.) If their practice or routine isn’t working for them any longer, they will change it. We can do the same thing with our financial plan!
Setbacks in life are part of the journey. If we gave up when the going gets tough, we wouldn’t get to enjoy the fruits of our labors. We won’t sell out when the market is low, just like we won’t sell ourselves short when we don’t stick the landing every time.
We keep our eyes on the prize and keep moving forward.
If you are going through something right now and you didn’t get it right the first time, that’s okay. You can always try again next time. We aim for progress, not perfection. Progress—that’s going for the gold.
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Resolved: No Resolutions – 228Main.com Presents: The Best of Leibman Financial Services
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RMD at Age 73: What’s Up with That?
We have noticed that the rules about IRA account withdrawals can cause some confusion, particularly among those who are getting close to the “Required Minimum Distribution” age.
Here, we’d like to cover what the basics might mean for most people, though it is not intended to be advice or a recommendation for your specific situation.
For traditional or rollover IRA account owners, withdrawals after age 59½ are free of penalty, but income taxes must be paid on the amounts withdrawn. One may withdraw money or not, in accordance with their needs and plans.
But beginning at age 73, the rules change.
For each year beginning with the year you turn 73, a “Required Minimum Distribution” (RMD) must be withdrawn:
- “Required” means there is no option about it—it must be done.
- “Minimum” means that you must withdraw at least the calculated amount, though you may withdraw more if you choose.
- “Distribution” is simply the word the IRS uses for withdrawals.
The way the numbers work, the RMD starts out at a little under 4% of the account balance at age 73. Then, the RMD rises gradually each year. The RMD gets to a little over 5% at age 80 and closer to 10% by age 92. The withdrawals will be taxable—that is the whole object of the exercise, from the IRS’s perspective.
Even with those requirements, IRA accounts may still have significant balances until advanced ages.
Here are just a few fine points:
- The calculation begins with the prior year-end balance.
- The factor used comes from an IRS table, and we can do the arithmetic for you.
- The withdrawal may be made any time in the calendar year.
- If you have multiple IRA accounts, it can get confusing. Some people consolidate and simplify their finances at this point.
For more information, the IRS explains more details about RMDs online, available here. Please also keep in mind that different rules apply to inherited IRAs, Roth IRAs, and certain other situations, so do seek specific advice for your situation as necessary.
As for our role, our object for each client is to help have your money do what you need it to do.
So the question of how you should manage your accounts and your withdrawal strategy is best answered in a one-on-one discussion. If you would like our help talking through your situation, please call or email us. Happy to help.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
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An Orchard Is a Long-Term Endeavor
Why do we own the orchard? It’s a long-term endeavor, our favorite metaphor for retirement planning. We plant and tend the trees in our working years, but in our retirement years, we live on the fruit crop! It’s about the balances, until it’s not. Then it’s about what they produce. 🙏
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