Are treasury bills a good investment for retirement savings?

July 7, 2024 No Comments

A: Making investment decisions for your retirement savings is all about balancing opportunity cost and risk. Treasury bills (T-bills) issued by the U.S. government are considered among the safest investments in the world, so risk should never be a significant deterrent. However, the return on

Are variable annuities subject to required minimum distribution (RMD)?

July 7, 2024 No Comments

A: Variable annuities are insurance contracts that provide tax-deferred growth of assets that can later generate a guaranteed income stream, thus making them popular vehicles for financing retirement. Like other investment products, variable annuities can be held as either qualified or non-qualified for tax purposes.

Benefits of a 401(k) for the Self-Employed

July 7, 2024 No Comments

A: If you are employed by a company that offers a 401(k) plan, it is best that you go through your employer to fund it, since you will accumulate savings faster. However, if your employer does not offer a plan or you are self-employed, you

Calculating PV of annuity in Excel

July 7, 2024 No Comments

A: Calculating the present value of an annuity using Microsoft Excel is fairly straightforward. However, you have to know the annuity’s terms: its interest rate, payment amount and duration. Also, the assumption here is that you’re dealing with a fixed annuity. Variable annuities offer a rate

Can a 401(k) be used for a house down payment?

July 7, 2024 No Comments

A: A 401(k) retirement plan can be tapped to raise a down payment for a house. You can either borrow money or make a withdrawal from your 401(k). Withdrawing From a 401(k) The first and least advantageous way is to simply withdraw the money outright.

Can a person who is retired continue to fund an IRA?

July 7, 2024 No Comments

A: For the purposes of contributing to an IRA, compensation (i.e. earned income) does not include income from a pension, an annuity or Social Security. Generally speaking, you must have earned the income by performing services (i.e. work) or received it as alimony and/or a

Are SIMPLE IRA plans subject to ERISA?

July 7, 2024 No Comments

A: Savings Incentive Match Plans for Employees, or SIMPLE IRAs, are employer-sponsored retirement plans that allow employees of small businesses to make contributions via salary deferrals. These plans are covered by the Employee Retirement Investment Security Act, or ERISA, which details requirements for structure and

Are Social Security benefits adjusted for inflation?

July 7, 2024 No Comments

A: Social Security benefits are adjusted for inflation. This adjustment is known as the cost of living adjustment (COLA). For the program’s initial nearly four decades, benefit amounts did not increase based on higher living costs. The inflation of the 1970s, which was particularly hard

Are Social Security benefits taxable after age 62?

July 7, 2024 No Comments

A: Eligibility to collect Social Security benefits begins at age 62. Many seniors, to collect larger benefit amounts, wait until a later age. Whether Social Security benefits are taxable by the Internal Revenue Service (IRS) depends on how much additional income the person filing taxes

Are Social Security payments included in the US GDP calculation?

July 7, 2024 No Comments

A: Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For the purposes of calculating GDP, government spending does not include transfer payments – the reallocation of money from one party to another – which includes

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