Latest news with #MarinaWealthAdvisors
Yahoo
26-06-2025
- Business
- Yahoo
5 best retirement investing cheat codes, according to experts
Retirement planning is a long game, and you win by consistently saving and investing during your working years. But along the way, certain tips and strategies can help your nest egg grow bigger and last longer, without too much effort on your part. The catch? Most people don't know these shortcuts exist — or they assume retirement investing is too complicated. That's not true. A few smart moves can make a big difference, especially if you time them right and understand how they fit into your overall plan. It's time to hit the easy button. Think of these as the hidden power-ups in your retirement strategy. They're simple to understand and backed by financial professionals who've seen what works in real life. Whether you're in your 30s or your 60s, it's not too late to start using them. While being risk-averse might feel safe, playing it too conservatively with your retirement investments — even as retirement nears — could cost you over time. That stands in contrast to an oft-repeated (but maybe outdated) retirement planning rule of thumb that recommends shifting to a bond- and fixed-income-heavy portfolio as retirement approaches. More experts are acknowledging that while some safety is always necessary, a more nuanced and perhaps more equity-heavy approach is needed, especially if you end up living a long life. 'Many people view their retirement as the beginning of the last phase of their life,' says Noah Damsky, a CFA and principal at Marina Wealth Advisors. 'It's easy to lose sight of the fact it can mean living another 20–30 years.' Damsky adds that being too conservative in your retirement plan 'can leave a lot of money on the table.' The key is balance. Many experts recommend leaving a big enough buffer zone in your portfolio of cash and low-risk investments to cover at least three to six years' worth of living expenses to offset the risk of investing in stocks in retirement. How to implement this cheat code Check in annually: Reassess your risk tolerance and asset allocation annually, especially as you approach retirement. Pick a later date: Target-date funds are popular 401(k) investments. Consider a target-date fund with a later retirement date. This fund will typically have a higher stock allocation, potentially leading to greater long-term growth. Set up a review: If you have a financial advisor, schedule a portfolio review to ensure you're not leaving potential growth on the table. Get started: Match with an advisor who can help you achieve your financial goals Relying on a single investment account, like a 401(k), might simplify your statements, but it can limit your savings — and increase your tax bill. 'Diversifying your accounts gives you more flexibility to utilize multiple income sources to help you best manage your taxes in retirement,' says Joe Conroy, CFP and owner of Harford Retirement Planners. Your 401(k) gives you a tax break this year, but you'll owe income tax on withdrawals in retirement. To balance this out, consider opening a Roth IRA, too. You'll miss out on a lower tax bill next year, but you won't pay any taxes on retirement withdrawals. Plus, you might be able to find less expensive exchange-traded funds (ETFs) and funds in a Roth IRA at an online broker than your workplace 401(k) can offer. Conroy says having a taxable brokerage account is also a smart move. 'Instead of withdrawals being taxed as ordinary income, these accounts use capital gains tax rates, which can be lower,' says Conroy. Gains on investments held for over a year inside a brokerage account are typically taxed at a lower long-term capital gains tax rate (often 15 percent), while traditional retirement account withdrawals are subject to ordinary income tax (most working people fall in the 22–24 percent tax bracket). Plus, withdrawals from retirement accounts prior to age 59 ½ incur a 10 percent IRS penalty. Using a taxable account can be a good option if you need to pull money from your investments before retirement. You can save money on taxes (ironically) while your retirement savings continue to grow. How to implement this cheat code Understand how different investment accounts are taxed. Tax-deferred accounts (like traditional 401(k)s and IRAs): Lower your taxable income today but are taxed as ordinary income upon withdrawal. Tax-free accounts (like Roth IRAs): Contributions grow tax-free and are withdrawn tax-free in retirement. Taxable accounts (brokerage accounts): Realized gains on investments held over a year are subject to a 0, 15 or 20 percent tax rate. Realized gains on investments held for less than a year are subject to ordinary income tax rates. Annuities often get a bad rap, in part because they're complex and illiquid, and certain types are rife with fees. But if you're looking for a cheat code to replace your paycheck in retirement, annuities offer a solution — albeit with some strings attached. There are lots of different kinds of annuities out there, but a single-premium immediate annuity, or SPIA, is one of the more straightforward options on the market. This type of immediate annuity lets you exchange a one-time payment for monthly income that lasts as long as you live. In this way, a SPIA can act as a paycheck replacement or a self-funded pension. 'Some companies also offer SPIAs with cost-of-living adjustments at fixed percentages,' says Mike Hunsberger, a CFP and owner of Next Mission Financial Planning. Hunsberger recommends figuring out how much your minimum lifestyle expenses will be in retirement, and if an annuity makes sense for your situation, consider allocating that money to a SPIA to cover those expenses. Doing so can allow you to be more aggressive with investments elsewhere in your portfolio because you'll always receive that annuity income to cover your fixed living costs, says Hunsberger. Hunsberger likes SPIAs for their low cost and simplicity. But not all annuities are created equal, so it's wise to consult with a fiduciary — a financial advisor you pay to provide unbiased advice free from conflicts of interest — who can explain the pros and cons and help you explore your options. How to implement this cheat code Look into annuities: Decide whether an annuity makes sense. Get familiar with the pros and cons of annuities and decide for yourself if an annuity is a good investment for your situation. See if the math checks out: Decide how much of your savings you're comfortable committing to an annuity. If you decide to buy an annuity, some experts recommend allocating 10 to 25 percent of your retirement savings to it. Others, like Hunsberger, suggest allocating enough to cover daily expenses in retirement. Compare options: Shop around and compare options from the best annuity companies with strong financial ratings. Get started: Match with an advisor who can help you achieve your financial goals Retirement isn't just about how much you save — it's also about how much you pay in taxes. A Roth IRA conversion during what some experts call the 'retirement income valley' can be a game changer for reducing your retirement tax bill. The retirement income valley is the period after you stop working but before you start taking required minimum distributions (RMDs) at age 73. So if you retire at age 67, you have six years to do the conversion. There's a key advantage to timing the conversion this way: Your income is likely to be much lower in the valley. 'You'll be in a lower tax bracket, which allows you to pull money out of tax-deferred accounts at much lower rates,' says Erik Goodge, a CFP and founder of uVest Advisory Group. Consider this: If you make less than $48,475 in 2025 as a single filer ($96,950 for married filing jointly), you'll pay between 10 and 12 percent in ordinary income taxes. Cross those thresholds, and a higher 22 percent tax rate starts to apply. Why is a Roth IRA conversion so beneficial during this window? Once money is invested in a Roth IRA, withdrawals are tax-free and Roth IRAs aren't subject to RMDs. Over time, this strategy can save you thousands in taxes and leave a larger inheritance for your beneficiaries. How to implement this cheat code Calculate your conversion amount: It's best to convert just enough each year to avoid jumping to a higher tax bracket and paying more on each incremental dollar of converted money. Plan for taxes: Pay conversion taxes with money from outside the IRA to maximize growth in the Roth. Get help: Speaking with a financial advisor or CPA is also a good idea. A conversion can be tricky, and you want to ensure it won't trigger unexpected tax consequences. Working just one extra year could add tens of thousands of dollars to your nest egg and reduce the chances of running out of money in retirement. Consider this: If you earn $80,000 a year and save 20 percent of your income, that's an extra $16,000 saved — not to mention the growth potential. 'You're letting savings grow longer, saving more and spending less of your nest egg,' says Joseph Boughan, a CFP and managing member at Parkmount Financial Partners. 'It's the highest leverage thing you can do to improve your retirement nest egg.' There are other perks of waiting to retire. Your Social Security benefits grow by about 8 percent for every year you delay claiming past your full retirement age, though that credit maxes out at age 70. Not everyone has the luxury of delaying retirement. Health issues and caretaking responsibilities may force you to retire earlier than planned. But for those who can wait, the extra money can positively alter your financial outlook. 'Just one or two years can shift a plan from 'at risk' to reasonably in line with projections,' says Boughan. How to implement this cheat code Adjust your goal: If your target retirement age is 67, consider working until 68 or part-time for a couple of years. Max out contributions: Take advantage of catch-up contributions in your 401(k) and IRA once you turn 50. Fine tune your plan: Use the extra time to plan your exit strategy by paying down debt and finalizing retirement plans. Retirement planning doesn't have to feel like navigating a maze. With these cheat codes in your playbook, you can level up your savings and unlock a smoother path to retirement. Remember, even simple moves — like working one more year or diversifying your accounts — can be game-changers. Retirement calculator: Estimate how much you need to save Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
CNET
27-05-2025
- Business
- CNET
Wait! Don't Move Your Retirement Fund From the Stock Market to a CD Before Reading This
Yes, CDs are safe. But that comes at the cost of higher earning potential. LordHenriVoton/Getty Images Last month's stock market drop was scary, especially if some of your retirement savings are in stocks. And while the market may have recovered, many investors are still shaken. If you're wondering whether you should pull your money out of your 401(k) or other retirement account and put it in a certificate of deposit, it's understandable. But before you make any drastic moves, consider what the experts have to say. "CDs can feel like a safe haven in this kind of environment because they offer predictability, which is appealing when everything else feels shaky," says Taylor Kovar, certified financial planner and CEO of 11 Financial. But, he warns, "there are some trade-offs." Here's what you need to know before you upend your investment strategy. Read more: The Simple $1 Trick Helped Me Pay Off Debt and Retire on My Terms. Here's How It Works If you have decades before retirement, stick to the plan Stock market swings are stressful, but a smart investing strategy factors in the dips. The S&P 500 has historically delivered around a 10% annual return for investors who keep their money there for decades. If you have many years before retirement, you can afford to ride out the waves and grow your money over the long term. "One of the biggest retirement risks is getting too conservative too soon," said Noah Damsky, CFA, principal of Marina Wealth Advisors. "Retirement can last for over 20 years, so get too conservative too soon, and you risk prematurely depleting your portfolio." Keeping some of your retirement savings in low-risk assets is wise, but the amount depends on a number of factors, including your age and risk tolerance. A financial adviser or robo-advisor can help you create the best strategy for you. If retirement is near, low-risk assets like CDs make more sense If you're close to retirement -- or are already retired -- you have less time to recover from stock market dips. So, your priority should be less on growing your nest egg and more on preserving it. In this case, allocating more of your savings to low-risk, fixed-income assets like CDs and bonds can be a smart move. Again, a financial adviser can help you determine your best route. Don't let emotion derail your retirement plan Whatever your age and investment goals, don't let the economic headlines scare you into making any drastic changes to your retirement strategy. "For investors rattled by the recent dip, I'd say this: Don't make emotional decisions in response to short-term volatility. Step back, review your timeline, and make sure your investments match your goals and risk tolerance today, not what they were five years ago," said Kovar. "A well-balanced plan usually includes both stocks and CDs, one for growth, the other for peace of mind."
CNET
23-05-2025
- Business
- CNET
Thinking of Moving Your Retirement Savings From the Stock Market to a CD? Read This First
Don't let temporary market dips upset your investment strategy. LordHenriVoton/Getty Images The stock market has always had its ups and downs, but last month's plummet was enough to spook any investor. While the market has recovered, many people are still shaken from seeing their portfolios decimated overnight -- especially if a chunk of their retirement fund is in stocks. And with the economy still shaky, some are wondering if they should move their nest egg into lower-risk assets like certificates of deposit. Not so fast, experts say. "CDs can feel like a safe haven in this kind of environment because they offer predictability, which is appealing when everything else feels shaky," says Taylor Kovar, certified financial planner and CEO of 11 Financial. But, he warns, "there are some trade-offs." Here's what you need to know before you make any drastic moves. Read more: The Simple $1 Trick Helped Me Pay Off Debt and Retire on My Terms. Here's How It Works Is retirement a long way off? Stick with your current strategy Stock market swings are scary, but a smart investing strategy factors in the dips. The S&P 500 has historically delivered around a 10% annual return for investors who keep their money there for decades. If you have many years before retirement, you can afford to ride out the waves and grow your money over the long term. "One of the biggest retirement risks is getting too conservative too soon," said Noah Damsky, CFA, principal of Marina Wealth Advisors. "Retirement can last for over 20 years, so get too conservative too soon, and you risk prematurely depleting your portfolio." Keeping some of your retirement savings in low-risk assets is wise, but the amount depends on a number of factors, including your age and risk tolerance. A financial adviser or robo-advisor can help you create the best strategy for you. Nearing retirement? Moving more money into a CD could make sense If you're close to retirement -- or are already retired -- you have less time to recover from stock market dips. So, your priority should be less on growing your nest egg and more on preserving it. In this case, allocating more of your savings to low-risk, fixed-income assets like CDs and bonds can be a smart move. Again, a financial adviser can help you determine your best route. Don't give in to panic Whatever your age and investment goals, don't let the economic headlines spook you into making any drastic changes to your retirement plan. "For investors rattled by the recent dip, I'd say this: Don't make emotional decisions in response to short-term volatility. Step back, review your timeline, and make sure your investments match your goals and risk tolerance today, not what they were five years ago," said Kovar. "A well-balanced plan usually includes both stocks and CDs, one for growth, the other for peace of mind."
CNET
21-05-2025
- Business
- CNET
Should You Move Your Retirement Fund From the Stock Market to a CD? Here's What Experts Say
A smart investing strategy balances risk and reward. LordHenriVoton/Getty Images Yes, the stock market has recovered from last month's freefall, but plenty of investors are still shaken. Watching your portfolio plummet overnight is scary for anyone, but if most of your retirement fund is in stocks, it can be especially terrifying. With the economy still far from settled, should you consider pulling your retirement savings from the stock market and putting them into lower-risk assets like certificates of deposit? That depends, experts say. "CDs can feel like a safe haven in this kind of environment because they offer predictability, which is appealing when everything else feels shaky," says Taylor Kovar, certified financial planner and CEO of 11 Financial. But, he warns, "there are some trade-offs." Here's what you need to know before you make any drastic decisions. Read more: The Simple $1 Trick Helped Me Pay Off Debt and Retire on My Terms. Here's How It Works Is retirement a long way off? Stick with your current strategy Stock market swings are scary, but a smart investing strategy factors in the dips. The S&P 500 has historically delivered around a 10% annual return for investors who keep their money there for decades. If you have many years before retirement, you can afford to ride out the waves and grow your money over the long term. "One of the biggest retirement risks is getting too conservative too soon," said Noah Damsky, CFA, principal of Marina Wealth Advisors. "Retirement can last for over 20 years, so get too conservative too soon, and you risk prematurely depleting your portfolio." Keeping some of your retirement savings in low-risk assets is wise, but the amount depends on a number of factors, including your age and risk tolerance. A financial adviser or robo-advisor can help you create the best strategy for you. Nearing retirement? Moving more money into a CD could make sense If you're close to retirement -- or are already retired -- you have less time to recover from stock market dips. So, your priority should be less on growing your nest egg and more on preserving it. In this case, allocating more of your savings to low-risk, fixed-income assets like CDs and bonds can be a smart move. Again, a financial adviser can help you determine your best route. Don't give in to panic Whatever your age and investment goals, don't let the economic headlines spook you into making any drastic changes to your retirement plan. "For investors rattled by the recent dip, I'd say this: Don't make emotional decisions in response to short-term volatility. Step back, review your timeline, and make sure your investments match your goals and risk tolerance today, not what they were five years ago," said Kovar. "A well-balanced plan usually includes both stocks and CDs, one for growth, the other for peace of mind."
CNET
07-05-2025
- Business
- CNET
The Fed Paused Rates Again. Here's What That Means for CD and Savings Account APYs
Rates remain elevated, but don't wait too long to snag a good one. Skyhobo/Getty Images Key takeaways The Federal Reserve paused rates at its May meeting. Banks tend to follow the Fed's lead when setting their deposit account rates. Today's best CDs and savings accounts earn up to 5% APY. To no one's great surprise, the Federal Reserve paused interest rates again today, keeping them at a target range of 4.25% to 4.5%. It's the third time the Fed has paused rates this year. In its post-meeting statement, the Fed noted that "Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace." Holding rates steady allows the Fed to continue monitoring the economy before making adjustments to its monetary policy. That means you still have time to score an attractive rate on a certificate of deposit or savings account. Top CDs and savings accounts continue to offer annual percentage yields as high as 5%. But if you want to maximize your earnings, it's wise to act now. "CD rates may remain unchanged in May, but they should drift lower by June," said Noah Damsky, CFA, Principal of Marina Wealth Advisors. "I think it's a coin flip [whether the Fed] cuts rates in June. However, I am confident the Fed will cut rates by July. This all means that rates will head lower." Here's what you need to know about how the Fed's latest decision affects your savings -- and what you should do to maximize your money now. Read more: Fed Meeting Keeps Interest Rates High. Here's Why That's a Big Deal for Your Finances How the Federal Reserve influences deposit rates The Fed meets eight times a year to assess the health of the US economy and vote on the federal funds rate, the rate banks use to lend and borrow money. While the Fed's decision to change rates doesn't directly affect savings rates, changes in APYs typically follow. The changes can take several weeks or even months to take effect. Although some banks set their deposit account APYs according to the direction of the federal funds rate, timing and specific rates may vary. "Some big banks are swimming in deposits and they don't need to pay up to bring in more," said Greg McBride, chief financial analyst at Bankrate. As such, there may be dramatic differences in account interest rates from bank to bank. "People should shop around, and they shouldn't just shop around today; they should shop around a week from now, a month from now and three months from now," said Gary Zimmerman, CEO of MaxMyInterest. The Fed paused rates. Now what? Jordan Gilberti, senior lead planner at Facet, recommends preparing for the worst-case scenario when thinking about strategies for growing your savings, whether you're setting aside cash for an emergency or building a vacation fund. With rates paused for now, purchasing a CD or moving your money to a high-yield savings account as soon as possible is the best way to maximize your interest earnings. "Banks are already adjusting [rates], and we've seen a few of the high-yield savings accounts take a step back," said Taylor Kovar, CEO of 11 Financial. "It's not panic mode or anything, but if you've got cash sitting around, now's a good time to check where it's earning the most and make sure it's still competitive." You can also consider building a CD ladder, suggests John Buran, CEO of Flushing Financial, the parent company of Flushing Bank. This strategy allows you to take advantage of still-high interest rates in the short term, but also lock in rates for the long term in case APYs drop. The best savings accounts to open now Understanding the pros and cons of each deposit account type can help you make the best choice for your needs. High-yield savings account A high-yield savings account is an interest-earning account often offered by online banks, credit unions and other financial service institutions. Unlike traditional savings accounts, whose APYs can be as low as 0.01%, the best high-yield savings accounts offer up to 5% APY. Pros Some high-yield savings accounts earn more than 10 times the national average. Your money is easily accessible when you need it. If your account is held at an FDIC- or NCUA-insured institution, it's protected up to $250,000 per person, per institution if the institution fails. Cons Availability can be limited. These accounts aren't offered by all banks or credit unions. Many accounts are provided by online-only banks with no physical branches. You must be comfortable with an entirely digital banking experience. Variable rates can change at any time. Certificate of deposit A certificate of deposit is a deposit account that offers a fixed rate for a specific time, or term. In exchange for fixed growth, you agree not to withdraw your money before the term ends. The main benefit of a CD is that your money grows over time at a predetermined APY. Top CDs currently earn APYs as high as 4.5%. Pros A fixed rate applies to the CD's entire term. CDs are widely available at most banks or credit unions. If your account is held at an FDIC- or NCUA-insured institution, it's protected up to $250,000 per person, per institution. Cons Your money is tied up for the duration of the CD's term. Early withdrawal penalties reduce returns if you need to take out money before the term ends. No-penalty CD A no-penalty CD is a specialty CD that offers a fixed rate for a specific term, like traditional CDs. This deposit account doesn't impose an early withdrawal penalty if you need to access your money before the term ends. These CDs are generally less widely available, and the APYs are lower, but the additional flexibility can be worth a slight drop in rates. Pros A fixed rate applies to the CD's entire term. Withdrawals before the CD matures don't incur penalties. If your account is held at an FDIC- or NCUA-insured institution, it's protected up to $250,000 per person. Cons No-penalty CDs aren't widely available at most banks or credit unions. These CDs generally earn a lower APY than a traditional CD. Tips for finding the right savings account or CD Keep in mind that larger, brand-name banks with bigger marketing budgets may not offer the most competitive rates on savings accounts and CDs. Community or regional banks, credit unions and online-only banks often offer higher rates on deposit accounts to attract new customers. The best high-yield savings accounts continue to offer APYs up to 5%, low fees and no minimum balance requirements. The best CD rates are as high as 4.50% APY. When evaluating a savings account, note any fees associated with opening or maintaining the account. CDs offer a safe, fixed rate of growth -- as long as you can leave the funds in the account until the maturity date to avoid early withdrawal penalties. Terms can last anywhere from three months to five years or more. Additionally, confirm that your deposit is insured by either the FDIC (for banks) or the NCUA (for credit unions). This protects your money for up to $250,000 per person, per institution if the bank fails. You should also compare APYs and how easily you can access your money before making your decision. Elevated savings rates are still available With interest rates currently paused, there's still time to maximize your earnings with a high-yield savings account or CD. But the sooner you act, the better. Experts expect the Fed will resume rate cuts later this year. If you're not already earning a competitive interest rate on your savings, consider locking in one of today's best CD rates or moving your funds to a high-yield savings account to boost your earnings.
