HSBC Hastens Search to Find Next Chairman as Tucker's Exit Nears
With the clock ticking in the hunt for HSBC Holdings Plc 's next chairman, Europe's largest bank is speeding its efforts to assemble a list of candidates for the role.
Chairman Mark Tucker's announcement last week that he would leave HSBC in September to take on a non-executive chairman role at AIA Group Ltd. came as a surprise to some of his fellow board members, who thought they'd have more time to find his replacement, according to people familiar with the matter.
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10 Times You Should NOT Do a Roth Conversion
A Roth conversion is the process of rolling over retirement funds invested in a pretax account, like a regular IRA or 401(k), into an after-tax Roth IRA. You'll pay capital gains taxes at the time of rollover, but you won't pay taxes in retirement when it's time to withdraw from the Roth. Find Out: Read Next: While a conversion can be the right thing for some retirees, or soon-to-be-retirees, to do finance experts suggested 10 times you should not do a Roth conversion. 'One of the biggest mistakes people make with Roth conversions is assuming they're always a good idea, according to Stephan Shipe, CFP, founder and CEO of Scholar Advising. However, he said, 'If you're still working and expect your income to drop in retirement, it often makes sense to wait. Paying taxes now at a high rate, when you could defer and pay at a lower rate later, can undermine the strategy entirely.' Shipe said that Roth conversions are best timed during low-income years, such as after retirement but before required minimum distributions or Social Security benefits begin. 'That window creates an opportunity to shift assets without pushing into higher tax brackets or triggering IRMAA (Income-Related Monthly Adjustment Amount, for Medicare) surcharges,' he said. Another overlooked point is that tax law isn't fixed, Shipe pointed out. 'Roths are appealing because they hedge against future tax increases, but conversions are taxed under today's laws.' With the odds of higher tax rates in the future, that hedge only has value if it doesn't strain your cash flow or jeopardize other parts of a financial plan, he explained. Be Aware: If you're close to retirement, you're probably in your highest earning years and facing your highest tax brackets, which is a good reason to think twice about a Roth conversion, according to Carson McLean, founder and lead wealth advisor at Altruist Wealth Management. 'Doing a Roth conversion while in a peak tax bracket means you pay more tax now than you might need to. For most people, it is better to wait until after they retire, when income drops and they fall into a lower bracket,' McLean said. That window between retirement and when required minimum withdrawals (RMDs) or Social Security start is usually the best time to do conversions, because you can control your taxable income and minimize the tax bill. Retirees can begin taking Medicare health insurance at age 65 but be warned: a Roth conversion raises your modified adjusted gross income for the year, McLean said. 'This higher income can push you into a higher Medicare premium bracket, which means you will pay more for Medicare Part B and Part D two years later.' For people who are not yet on Medicare and get health insurance through the ACA marketplace, a higher income can reduce or eliminate their subsidies, leading to much higher out-of-pocket premiums. 'These added healthcare costs can quickly outweigh any tax benefits from the Roth conversion,' McLean said. People with low income may not benefit much from a Roth conversion, either, especially if their tax rate will not increase in the future, McLean said. 'The bigger issue is cash flow. Ideally, you want to pay the conversion tax from money outside your IRA so you keep more in the account growing tax-free.' If you don't have extra cash, paying the tax from the IRA reduces your retirement savings and the potential benefit of the conversion. If you have charitable inclinations and plan to leave your IRA to a charity, there is no benefit to converting, McLean said. 'The charity does not pay taxes, so the account goes to them tax-free either way. If your heirs will be in lower tax brackets than you are, it is usually better to let them inherit the traditional IRA and take withdrawals over time.' A Roth conversion can also trigger a leap into a higher tax bracket if you try to convert a lot of money at one time, according to Doug Carey, a certified financial analyst at WealthTrace. 'If possible, it is best to spread out the conversions over several years to avoid moving into a different tax bracket,' he said. You should also avoid converting when there is other income coming in, such as stock options or a large bonus. Some final considerations for holding off on a conversion because it won't be worth the taxes, according to Carey, are: You are receiving Social Security benefits or will very soon. You have a pension, which already puts you in a higher tax bracket than those without a pension. Your life expectancy is low. A Roth conversion needs time in order to break even due to the large payout in taxes when the conversion takes place. You don't have enough taxable income to pay the taxes on the conversion. The best way to find out if a Roth conversion is right for you is to talk with a fiduciary financial advisor. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 25 Places To Buy a Home If You Want It To Gain Value 3 Reasons Retired Boomers Shouldn't Give Their Kids a Living Inheritance (And 2 Reasons They Should) This article originally appeared on 10 Times You Should NOT Do a Roth Conversion Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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I'm a Financial Expert: 6 Smart Ways To Build Wealth If You Just Started Your Career
If you're like most early career professionals, building wealth sounds like a challenge future you will tackle. Right now, you're in survival mode: How will rent get paid? How will you impress your boss? Unfortunately, building wealth is not something one can put off. That's because money compounds with time. And the earlier you start accruing it, the wealthier you'll eventually become. Read Next: Learn More: GOBankingRates spoke with Michael Rodriguez, CFP, founder of Equanimity Wealth, to discover smart ways early career professionals can get on the right path to building wealth. This one might sound fairly obvious — but the key word here is 'actively.' 'If your income is capped, your growth will be, too,' Rodriguez said. Avoid complacency by always searching for additional opportunities to earn a buck. Rodriguez suggested learning a skill set outside your 9-to-5 job (like blogging, tutoring or personal training) to bring in additional funds. Not only do additional skills translate to extra money by way of freelance gigs and lucrative side hustles, but they make you a more valuable employee, which ultimately can benefit you in hiring and salary negotiations. And if your specific skill set gets sharp enough, that side hustle may one day become your main hustle. Check Out: Most early career professionals aren't rolling in the dough. But because of compound interest, the earlier one starts investing, the more time their money has to grow. So try to consistently invest even just small amounts of money where you can. 'If your employer offers a 401(k) match, contribute at least enough to get the full match — think of it as free money. If you don't have access to a 401(k), a Roth IRA is a great option if you're in a lower tax bracket right now,' Rodriguez said. And don't sleep on index funds. They're low-cost and diversified, and they don't require extensive knowledge of the stock market. High-interest debt should be eliminated as quickly as possible. This is because debt compounds and will cancel out a large chunk of your earnings the longer you put it off. And the higher the interest rate, the worse off you'll be. Rodriguez recommended credit card debt be the first you tackle (if you carry it). Inevitably, freeing up monthly debt payments will give you more money to invest down the line. Additionally, paying down debt in a timely manner is key to keeping your credit score healthy — something that can save you hundreds of thousands of dollars over your lifetime. Think of automation as an idiot's guide to good habits. Or, at the very least, it means one less thing you have to think about each month. Rodriguez recommended setting up automatic transfers to your savings and investment accounts right after payday — perhaps before you even have an opportunity to see the money hit your account and are tempted to spend it. Ultimately, you want your net worth increasing over time, and small but consistent savings is key to making this happen. On the reverse side, don't forget to put routine bills on autopay so you aren't stuck paying unnecessary late fees. 'When your income increases, it's tempting to 'reward yourself' with a new car or pricier apartment. That's totally normal–but don't let your spending rise faster than your savings,' Rodriguez said. In fact, one major key to building wealth is keeping your expenses low as your income rises. Money saved can be put toward your emergency fund or investments that then compound over time. While Rodriguez acknowledged it's okay to splurge and enjoy life every once in a while, he advocated prioritizing long-term security over short-term upgrades. Don't be afraid to live below your means. For example, getting a roommate is often one of the most financially savvy moves one can make in their early years. Saving money because an article on the internet told you to do it is not going to create the same motivation that personalizing your goals will. 'Saving 'just because' is hard. Saving for a future home, early retirement or financial freedom feels different,' Rodriguez said. When you're clear on what you're working toward, you'll be more likely to stay on track. So ask yourself what you want your life to look like and how your money can help get you there. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Unreliable SUVs To Stay Away From Buying 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on I'm a Financial Expert: 6 Smart Ways To Build Wealth If You Just Started Your Career Sign in to access your portfolio
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Do You Have To Take Out Required Minimum Distributions If You're Working Full-Time? Suze Orman Breaks It Down
If you're still working past age 73 and wondering whether you need to take required minimum distributions, you're not alone. A recent question on the "Women & Money" podcast brought this issue to light — and Suze Orman had plenty to say about it. A listener named Janet wrote in with a common concern: She recently turned 76 and was told that as long as she's working full-time, she doesn't need to start RMDs. She's now considering retirement and wants to know what to do next. Orman's answer depends on the type of retirement account Janet has. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can According to Orman, the rules vary depending on whether your retirement savings are in an employer-sponsored plan or an Individual Retirement Account. "If you're working and the RMDs are from your employer's plan, your 401K, 403 or [thrift savings plan], you do not have to start taking them at 73," Orman explained. These employer-sponsored accounts are exempt from RMDs until you retire — as long as you're still employed by the company that sponsors the plan. But the rule doesn't apply to IRAs. "However, if you have any IRAs or you only have IRAs or whatever it may be, then that doesn't apply," Orman said. "So if you have an SEP IRA, a simple IRA, and any of that, you have to take RMDs from the IRAs even if you are working full time." So if Janet has money in an IRA and hasn't been taking her RMDs, she may already be behind. Trending: Maximize saving for your retirement and cut down on taxes: . Missing an RMD doesn't automatically result in a steep penalty, but you'll want to act quickly. Orman suggests taking the missed distribution right away and working with a CPA to file the appropriate forms with the IRS. "The IRS may waive the penalties entirely if she can show reasonable cause," she said. But timing and documentation matter, so professional help is recommended. Another question came up on the podcast: If you're still working and taking RMDs, can you also contribute to a retirement account? The answer is yes — if you have earned income, you can still contribute to certain accounts. For example, if you're self-employed, you can contribute to a SEP IRA even while taking RMDs. In fact, you may be able to contribute a sizable amount and get a tax deduction. However, Orman cautioned that just because you can contribute doesn't mean you should. "You might be better off just paying the taxes now and then investing that money in an individual brokerage account," she said, especially if you expect higher tax rates in most important thing is to understand what kind of retirement accounts you hold. If your money is in a 401(k) and you're still working for the company that sponsors it, you can likely delay your RMDs. But if your savings are in an IRA, the RMD clock starts ticking at 73 — regardless of your employment status. When in doubt, it's best to consult with a CPA or financial advisor who can help you navigate the rules and avoid costly mistakes. Read Next: Many are using retirement income calculators to check if they're on pace — Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Do You Have To Take Out Required Minimum Distributions If You're Working Full-Time? Suze Orman Breaks It Down originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
