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Avoid Taking Early Withdrawals from Your Retirement Plan There's usually a 10% early withdrawal penalty if you take money out of your tax-deferred retirement accounts or earnings from your Roth accounts before age 59 1/2, but there are exceptions. Medical expenses that cost more than 10% of your adjusted gross income (AGI), educational expenses, and Substantially Equal Periodic Payments (SEPPs) are just a few of the ways you can withdraw money penalty-free. But just because t...he government doesn't charge you a fee doesn't mean there's no cost. You'll owe income tax on the withdrawals if they come from a tax-deferred account, and you'll also hamper the growth of your retirement savings. This could derail your existing retirement plan and force you to save even more in the years following to get back on track. You're better off stashing money for emergencies in an emergency fund and saving for medical bills in a health savings account (HSA), if you're eligible for one. (Source: MotleyFool)

WEALTH WEDNESDAY TIP #277: Do an annual retirement check-up! If you're saving anything at all for retirement, it's easy to feel like you're on the right track simply because you're doing something. But if you're blindly throwing money in your 401(k) or IRA without knowing whether that's going to be enough to retire comfortably, you may be putting your financial future in jeopardy. Saving for the future isn't a set-it-and-forget-it situation. To make sure you're doing enough to prepare, you'll need to check in on your savings at least once a year, then make any necessary adjustments to ensure you'll reach your goal by retirement age.

FEATURED ARTICLE: Avoid Required Minimum Distribution Mistakes Even A Small Miscalculation Can Result In Big Fines and Penalties

Social Security After a Divorce A divorce doesn't necessarily mean you lose out on Social Security Spousal Benefits. So long as you were married for 10 years and have not gotten remarried, you are entitled to receive retirement benefits from your ex-spouse's Social Security record. If you start receiving benefits at your full retirement age, you'll receive an amount equal to one half your ex-spouse's full retirement benefits. If you claim benefits early at age 62, you'll get... a reduced amount. However, your ex-spouse will need to be at least 62 as well for you to begin claiming benefits, and unless he or she is already receiving Social Security benefits, you'll need to wait two years after your divorce to begin payments. Claiming these benefits in no way affects your ex-spouse's retirement benefits or that of anyone he or she marries after you. (Source: US News) See more

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FINANCIAL FACT FRIDAY: Seniors Like To Go To The Movies People ages 50 and older make up almost one-third of all trips to the movies in the United States, seeing an average of 6.8 movies per year, but 70% of the time they go before 7 p.m. And, as people get older, they tend to see more: According to AARP, people ages 65 and older see 7.3 movies per year.

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Your Biggest Retirement Expense This could be... Healthcare! In reality, Medicare has big coverage gaps, doesn't pay for lots of things seniors need, and has high coinsurance costs. There are various estimates for how much seniors should plan to spend on healthcare, but virtually every study shows out-of-pocket expenses totaling hundreds of thousands of dollars. If you aren't prepared for a substantial portion of your nest egg to go toward medical care, you aren't preparing ...properly for retirement. If you have a qualifying high-deductible health insurance plan, you can invest in a health savings account to cover medical expenses as a senior. If you aren't eligible to contribute to an HSA, earmark some of your 401(k) funds for care needs, or consider opening a separate retirement account that serves as your healthcare fund. That way, medical bills won't make you broke.

WEALTH WEDNESDAY TIP #288: Take advantage of tax breaks for retirement savings! In 2019, you can invest as much as $19,000 in a 401(k) account with pre-tax dollars, or as much as $25,000 if you're 50 or over and are eligible to make catch-up contributions. Depending on your income level and whether you or your spouse have access to a retirement plan at work, you may also be entitled to claim a tax deduction for a maximum of $6,000 in contributions made to an individual retir...ement account -- or $7,000 if you're eligible for catch-up contributions. If you're in the 22% tax bracket, just making a $6,000 investment could save you as much as $1,320 on your taxes. Your contribution would effectively reduce your take-home income by just $4,680. Each tax break is use-it-or-lose-it. So if you don't invest in 2019, you'll be forever forgoing the help the government is offering this year. Don't miss out on this free money.

FEATURED ARTICLE: Protect Retirement Savings Against Long Term Care Needs "Premiums are established due to your age and overall health when you enroll. In other words, it can cost you more money to enroll when you’re 65 versus when you’re only 55."

Taxes Could Change Your Retirement The type of tax you pay is the first key way your taxes change during retirement. While working, most of your income likely comes from wages and is taxed as ordinary income. When you retire, however, you’ll likely replace your lifestyle spending with multiple sources of cash flow, all of which are potentially taxed in different ways with different rates. 1.) Social Security benefits, pension benefits and distributions from retirement accou...nts, like traditional IRAs, are all taxed at ordinary rates. 2.) Qualified dividends and long-term capital gains will be taxed at lower capital gains rates. 3.) Distributions from tax advantaged accounts like Roth IRAs may not be taxed at all. These different tax treatments create the opportunity to potentially create the same after-tax cash flow with less pre-tax income. This means that you may be able to stretch out the value of your retirement nest egg longer than you anticipated. (Source: Kiplinger) https://www.kiplinger.com//T051-C001-S003-calculating-taxe

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