How will a 401(k) withdrawal impact my taxes at year-end?

Assuming the withdrawal is going to be spent and not rolled over to another retirement account, a partial withdrawal from your Traditional 401(k) will be treated as taxable income when you file your taxes next year. The amount the 401(k) provider deducts and sends to the IRS will also be counted as a prepayment of your taxes for the year, similar to how withholdings worked while working. . . .

Tax Planning, Retirement PlanningJoshua Escalante Troesh, CFPApril 15, 2020Retirement & Legacy, Retirement Planning, 401(k), ROTH 401(k), IRA Rollover, Tax Planning, Tax Deduction, Federal Income Tax

If a couple in their mid-50s is unemployed, can they set up an IRA withdrawal using rule 72(t), claim it as income and then re-invest it into a Roth IRA?

Good news, there is a way to accomplish your goal. Sort of bad news, using rule 72(t) won't help and yes, withdrawals from an IRA will impact ACA tax credit eligibility. Although the strategy you've outlined won't work, you can accomplish the same goal through converting a portion of the traditional IRA to a ROTH IRA. This is done by rolling over . . . .

Retirement PlanningJoshua Escalante Troesh, CFPMay 30, 2019Retirement & Legacy, Retirement Planning, Individual Retirement Account, 401(k), 457(a), 403(b), 401(a), ROTH 401(k), Roth IRA, Investment portfolio, Whole Life Insurance, Annuities, Annuity, Financial Advice, Affording College

How should my wife and I begin saving for retirement at 51 years old?

Congratulations on getting your son through college and on moving forward toward your retirement. You definitely need to hit the gas on your retirement savings and it seems like you are well poised to do this. Fortunately, the money which was dedicated toward your son's college can now be focused on your retirement.

At this stage you will want to invest . . . .

Retirement PlanningJoshua Escalante Troesh, CFPMay 27, 2019Retirement & Legacy, Retirement Planning, Individual Retirement Account, 401(k), 457(a), 403(b), 401(a), ROTH 401(k), Roth IRA, Investment portfolio, Whole Life Insurance, Annuities, Annuity, Financial Advice, Affording CollegeComment

Should I match my employer contribution to my retirement account or invest elsewhere?

You are correct, the rule of thumb advice doesn't really apply to you. If it is better you don't invest in the 401(k), the alternative to look at would be opening your own Individual Retirement Arrangement (IRA) account. To determine whether to invest in your 401(k) or to invest in your own IRA, ask yourself the following questions. . . .