Three Regrets of Retirees

by | Jul 31, 2020 | November

Three Regrets of Retirees A recent survey found that more than half of retirees have retirement planning regrets. Unfortunately, many of these retirees had to cut back on their lifestyles to compensate for financial shortfalls.1 Considering their most common regrets...

Medicare Open Enrollment

by | Jul 31, 2020 | November

Medicare Open Enrollment Each year between October 15 and December 7, Medicare offers an open enrollment period during which beneficiaries can make changes to several coverage options: Part A hospital insurance and Part B medical insurance, referred to as Original...

Closed-End Funds May Offer Higher Income

by | Jul 31, 2020 | November

Closed-End Funds May Offer Higher Income Most mutual funds are open ended, which means the investment company can issue and redeem fund shares to meet investor demand. By contrast, closed-end funds issue a fixed number of shares in an initial public offering (IPO),...

Taming Investment Taxes

by | Jul 31, 2020 | November

Taming Investment Taxes The Tax Cuts and Jobs Act lowered the marginal tax rates that apply to ordinary income, such as wages and interest from bonds and savings accounts, for 2018 through 2025. Fortunately for investors, capital gains and qualified dividends still...
Roth IRA Conversion
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Roth IRA Conversion

Should You Convert Your Traditional IRA to a Roth IRA?

One issue to consider is that if you convert your traditional IRA to a Roth IRA, you will owe current federal income tax on the amount you convert.

When Congress created the Roth IRA, millions of Americans who already had traditional IRAs faced a new decision: “Should I convert to a Roth IRA?” Traditional IRAs feature deductible contributions, and withdrawals are taxed as income. Roth IRA contributions, on the other hand, are not tax deductible, although qualified withdrawals of both contributions and earnings from a Roth IRA are free of federal income tax. This calculator is designed to help you determine whether you should consider converting to a Roth IRA.

 

The results below, and on the following page, show the projected value of a traditional IRA vs. a Roth IRA, based on your estimates on the input page as well as the taxes that would be owed in each case. On the “Future value of assets used to pay taxes upon conversion less taxes (of earnings only)” line, it is assumed that this money would be invested separately in a taxable account. Based on this estimate, which type of IRA would be most beneficial to you?

Your Results

Taxes that will be owed when withdrawals begin from your traditional IRA: $0
Taxes that will be owed upon conversion of your traditional IRA to a Roth IRA: $0
Current IRA balance: $0
Projected IRA balance (traditional and Roth): $0
Taxes upon withdrawal — traditional IRA: $0
Taxes upon withdrawal — Roth IRA: $0
After-tax value — traditional IRA: $0
After-tax value — Roth IRA: $0
Future value of assets used to pay taxes upon conversion less taxes (of earnings only) on one-time distribution — traditional IRA: $0
Total after-tax amount — traditional IRA + Net Future Value of assets used to pay taxes upon conversion: $0
Total after-tax amount — Roth IRA: $0

Based on the information you entered, the graph below illustrates the value of the two types of accounts once you reach retirement age. Note that this illustration assumes that upon retirement you would begin withdrawing money from both accounts. However, one other feature of the Roth IRA you should be aware of is that you don’t have to begin taking withdrawals from the account until you want to, whereas with a traditional IRA, you must begin taking minimum withdrawals from the account by April 1 of the year after the year in which you reach age 72 or you will be subject to tax penalties.

Estimated Value of a Roth IRA vs. a Traditional IRA

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long-term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk. These calculations assume that all deposits made to your traditional IRA were deductible, and that withdrawals were taxed at the after-retirement tax rate you selected. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime limit). To the extent that they exceed total contributions, non-qualified distributions are subject to a 10 percent federal tax penalty and are includible in gross income. Withdrawals from a traditional IRA before age 59½ may be subject to a 10 percent federal income tax penalty, and income taxes will be due. For advice concerning your specific situation, consult a tax professional.

Credit-Card Debt
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Credit-Card Debt

How Long Will It Take to Pay My Balance?

If you have accumulated credit-card debt, you can use this calculator to estimate how long it could take you to pay off that debt based on your payment amount.

Your Results

Assumptions:

  • No additional charges are added to the balance.
  • 12 equal billing cycles per year.
My current credit card balance: $0.00
The annual percentage interest rate on your card: 0%
The minimum amount required to pay only the interest: $0.00
Each month you plan to pay: $0.00
At that payment, the time required to pay off your balance: 0 years
You will pay total interest of: $0

This chart shows the number of years it would take you to pay off your balance based on the information you provided. You can substantially reduce the time needed to pay off your debt and your total interest paid by increasing monthly payments. If you feel your credit card interest rate is too high, you may want to consider whether you can transfer your balance to a lower-interest card.

Credit Card Balance Over Time

 
Car Affordability
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Car Affordability

How Much Can You Afford to Pay for a Car?

Your down payment and monthly payment amount are just the beginning of the costs involved in owning a car. Maintenance, insurance, fuel, and other ongoing expenses can take up a substantial amount of your overall transportation budget.

For many individuals, the price of car they can afford is a function of the amount of the monthly payment. You can use this calculator to help determine how much you can afford to pay for a car based on your monthly payment amount, down payment, loan term, and available interest rate.

Your Results

Based on the information you provided, you can afford to buy a car that costs: $0.00
Total interest you would pay: $0.00
Total cost of car: $0.00

This chart illustrates the remaining loan balance over the life of the loan.

Car Loan Balance Over Time

 

This hypothetical example is intended for illustrative purposes only. Actual results will vary based on the car you buy and the terms of your loan.

Saving Goals
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Savings Goals

Are You on Pace to Meet Your Savings Goals?

Setting a goal is a crucial step in meeting your savings objectives. Do you have specific savings goals, or are you merely hoping you’ll have enough when the need arises?

This calculator is designed to help you determine how much you need to save each year to meet your savings goals.

 

Are you able to save the annual amount needed to pursue your targeted savings goal? If not, you may need to reexamine your savings plan and make some adjustments. You can change some of the variables to see how they affect your results.

Your Results

Total value of current savings: $0
Number of years you have to save: 0
After-tax rate of return you expect on your investments: 0%
Annual savings required: $0

Are you satisfied with your savings accumulation? This graph shows the amount you would have to save each year to meet your goal at various rates of return. But remember that one of the most important steps you can take to work toward your goals is to avoid procrastination. Start saving for your goals today.

Impact of Rate of Return on Annual Savings Required

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long-term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk.

Saving Accumulation
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Savings Accumulation

How Much Money Are You on Track to Save?

If you currently have a savings plan in place, it’s important to know how much money you are on track to accumulate. As the saying goes, if you don’t know where you’re going, any road will take you there. Regardless of whether you’re saving for a long-term goal such as retirement or for a short-term goal such as a family vacation, it’s important to have a dollar figure in mind. This calculator is designed to help you estimate the future value of your current savings.

 

Will you accumulate enough savings to reach your goals? You may need to reexamine your savings plan and make some adjustments. You can change some of the variables to see how much savings you would accumulate under different scenarios.

Your Results

Total value of current savings: $0
Anticipated additional savings each year: $0
Total savings accumulated at end of period: $0

This chart shows the estimated savings accumulation using the after-tax rate of return you selected. Are you satisfied with the savings accumulation illustrated on the graph? If not, you may want to consider increasing the amount you save or decide whether you can afford to invest your savings more aggressively. If you want to accumulate more but aren’t sure how, we can help you develop a savings program that could help you bring your goals within reach.

Estimated Year by Year Savings Accumulation

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long-term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk.

Cost Of Retirement
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How Much Will Your Retirement Cost?

Estimating how much income you will need in retirement — and determining whether your current program of savings and investments can provide that income — is a good start to developing a retirement plan. This calculator is designed to help you estimate how much income you may need in retirement and the savings necessary to produce that income.

 
 
 

Your Results

Examine these results carefully. As you can see, there is a lot of information to consider and the numbers may look large.

The annual income that you will need in your first year of retirement: $0.00
When you begin retirement, you will need to have the following amount saved: $0.00
Assuming no additional contributions, your current savings will grow to: $0.00
Without additional savings, you will have a shortfall of: $0.00
You will need to save the following percentage of your salary each year: 0%
In the first year, this works out to: $0.00

The Cost of Procrastination

How much do you need to save each year to provide your desired retirement income? This graph shows the amount you would have to save each year to work toward your goal, at the rate of return you entered, if you started saving today, and if you wait five years to start saving. As you can see, waiting just a few years can have a substantial impact on the amount you need to save.

The amount accumulated if you started saving today is $0.00. The amount accumulated if you save the same annual amount at the same annual return, but wait five years to start is $0.00.

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long–term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk.

Retirement Portfolio Lifespan
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Retirement Portfolio Lifespan

How Long Will Your Funds Last?

According to the Employee Benefit Research Institute (EBRI), only 13% of pre-retirees surveyed felt “very confident� that they'll have enough money to live comfortably during retirement.

One of the greatest concerns of those approaching retirement is whether they have saved enough money to last a lifetime.

Use this calculator to estimate the lifespan of your retirement portfolio based on your expected return and rate of inflation.

According to EBRI, 51% of today's retirees say they need just as much or more income as they did when they were working.

 

Your Results

It’s important that you accumulate a large enough portfolio to meet your retirement income expectations. Based on the assumptions you entered, the results below show how long your portfolio would potentially last based on the rate of return and monthly income need you entered.

The expected value of your investment portfolio at retirement: $0
The annual rate of return you expect to earn on this portfolio: 0%
The annual rate of inflation you expect during retirement: 0%
The money you will need each month: $0
Your portfolio should last: 0 years

Will your portfolio last as long as you hoped? If this estimate does not meet your expectations, you may want to consider increasing your retirement savings, or consider whether you may be able to position a portion of your portfolio for potentially greater gains. But remember, with increased return potential comes increased investment risk.

Retirement Portfolio Lifespan

 

This hypothetical illustration does not represent the performance of any particular investment vehicle. Investments seeking higher rates of return also involve a higher degree of investment risk. Rates of return will vary over time, particularly for long-term investments.

Federal Income Tax
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Federal Income Tax

What's Your Estimated Federal Income Tax Liability?

Paying federal income taxes is one of most people’s least favorite annual activities. As a result, many people tend to procrastinate by not planning for their taxes each year and by completing and filing the forms at the last possible minute. This calculator is designed to help you estimate your annual federal income tax liability.

For the 2020 tax year, the standard deductions are as follows: single, $12,400; heads of households $18,650; married filing separately, $12,400; and married filing jointly, $24,800.

Your Results

Based on your estimates, you could owe the amount of federal income tax shown below.

Is the amount greater than you expected? You may be able to help reduce your tax liability by contributing more to your employer-sponsored retirement plan or by increasing your itemized deductions. For example, you may want to increase your charitable contributions or pre-pay deductible expenses such as state taxes.

Your total pre-tax income: $0
Based on the information you have provided, your federal income tax liability would be: $0

This is only an estimate of your total taxes. A tax refund or taxes still owed would depend on withholdings, estimated taxes paid, eligible tax credits, and other factors not considered here. This is not to be construed as a final determination of your federal tax liability; a tax professional should be consulted. Alternative minimum tax and itemized deductions are not considered.

Are you comfortable with the amount you are paying in taxes? There are steps you can take to help reduce your annual tax burden. Review your individual situation and develop a strategy to help reduce your taxable income.

Where Your Annual Income Goes

 

This is only an estimate of your total taxes. A tax refund or taxes still owed would depend on withholdings, estimated taxes paid, eligible tax credits, and other factors not considered here. This is not to be construed as a final determination of your federal tax liability; a tax professional should be consulted. Alternative minimum tax and itemized deductions are not considered.

IRA Eligibility
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IRA Eligibility

Are You Eligible to Contribute to an IRA?

Saving for a comfortable retirement is one of the most common financial goals among working people. One popular retirement savings vehicle is the IRA. Even if you have access to an employer-sponsored retirement plan, you may still be eligible to supplement your employer’s plan by contributing to a tax-deductible IRA or a Roth IRA. This calculator is designed to help you determine whether you qualify for the different types of IRAs and to estimate the potential future value of each type of IRA for which you are eligible.

 
 

Your Results

You can see below, and on the following pages, the types of IRAs you are eligible to make contributions to. If your income exceeds certain levels, you may qualify for a partial deduction (or no deduction) on your contribution to a traditional IRA, or you may be ineligible or only partially eligible for a Roth IRA. If that is the case, you can still consider making nondeductible contributions to a traditional IRA.

Are you eligible for a nondeductible IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of nondeductible IRA when withdrawals begin: $0
Estimated annual income from nondeductible IRA: $0.00

Your Results (continued)

Are you eligible for a deductible IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of deductible IRA when withdrawals begin:   $0.00
Estimated annual income from deductible IRA: $0.00

Your Results (continued)

Are you eligible for a Roth IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of Roth IRA when withdrawals begin: $0.00
Estimated annual income from Roth IRA: $0.00

Are you eligible for more than one type of IRA account? If so, you may need to choose which account is appropriate for you. In some cases, you may have more than one type of IRA account. You should be aware that no matter how many different IRA accounts you have, your total contributions to all IRAs in a single year may not exceed $6,000. In addition, individuals aged 50 and older may make an additional $1,000 "catch-up" contribution, bringing the total contribution limit to $7,000. This calculator assumes maximum contributions, including "catch-up" contributions for those age 50 and older.

The chart below illustrates the differences in after-tax income for Roth, deductible, and nondeductible IRAs using the values you entered.

Estimated Total After-Tax Income from Different IRAs

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk.

Note that withdrawals from deductible and nondeductible traditional IRAs are subject to ordinary income taxes and if withdrawn prior to age 59½ may be subject to an additional 10 percent federal income tax penalty (for nondeductible traditional IRAs, only the portion of the withdrawal attributable to earnings is taxable). To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime limit). To the extent that they exceed total contributions, non-qualified distributions are subject to a 10 percent federal income tax penalty and are includable in gross income.