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April 23, 2013
Consolidating Defined Benefit Plans

CHICAGO — Is accumulating multiple IRAs and 401(k)s the best investment strategy?

CHICAGO — The more things change, the more they stay the same. So goes that old saying illustrating an important truth in many aspects of life, but not in retirement planning.

The world of retirement planning has undergone many drastic changes in recent years, most of which would appear to be here to stay. Perhaps the most significant of those is the gradual disappearance of the corporate defined benefit plan.

A generation ago, in the days of generous corporate retirement plans, spending an entire working career with one employer was a common experience; these days, not so much. Today, many if not most of us will have more than one employer during our working careers.

Some of those employers may provide one of the new retirement accounts such as 401(k)s and some may not. In those cases, we have the option of opening individual retirement accounts (IRAs) to help save money for our retirement years. As a result, over a working career, many people wind up with retirement dollars spread out in several different accounts.

September 4, 2012
Save Now and Minimize the Tax Bite

CHICAGO — If you haven’t yet set up your own retirement savings plan, you can’t afford to delay

CHICAGO — Whether you’re just getting started in your dry cleaning business or you’ve been around for years, you can’t afford to let your hard-earned dollars get eaten up at tax time. It’s tough enough to earn a decent income these days, and it can be even harder to keep what you earn. That’s why it’s so important to take advantage of every legitimate way to minimize the tax bite on your earned income.

Worrying about your retirement today when the business demands on you are so high may not be at the top of your priority list, but it’s important to understand that retirement savings plans have the double benefit of reducing today’s tax load, thus effectively increasing today’s income, while helping to build that all-important retirement nest egg.

July 3, 2012
Retirement Planning: Watch Out for Yourself

CHICAGO — Survey: Only 59% of Americans are saving for retirement

CHICAGO — Despite the unrelenting flow of advice from people who ought to know, huge numbers of Americans just aren’t facing the truth about retirement. It would seem that those of us who are systematically planning and saving for a comfortable retirement are on the road to becoming a distinct minority.

Adding to the growing body of evidence of this national lethargy is data from the latest annual survey on retirement preparation conducted by Employee Benefit Research Institute (EBI), a non-profit organization. EBI has been gathering this data for 22 consecutive years. Among the findings of its 2011 survey:

May 1, 2012
Building a Retirement Nest Egg

CHICAGO — Building a nest egg sufficient to provide a comfortable retirement can be

CHICAGO — With the painful volatility of the stock market playing havoc with 401(k) and IRA accounts these days, building a nest egg sufficient to provide a comfortable retirement can be a challenging assignment. What makes the job even tougher is a tax provision that may come as a nasty surprise from Uncle Sam after you retire.

Those of us who can look with some degree of satisfaction at how well we are building our tax-deferred retirement accounts need to keep in mind that all withdrawals from our 401(k) and conventional IRA accounts will be taxed at our ordinary income tax rate, which can be as high as 35%. That needn’t be a problem for you in your early retirement years when you may make small withdrawals now and then to fill an occasional need. In fact, voluntary small withdrawals prior to age 70½ may be a way to soften the increasing tax bite soon to come.

December 5, 2011
Last-Minute Tips to Lower Your 2011 Income Tax Bill (Part 1 of 2)

CHICAGO — The filing deadline for 2011 federal income taxes is not far off, but you still have time to make sure you’ve done everything you can to keep Uncle Sam’s paws off as much of your money as possible. Here are some last-minute ways to do that by reducing your 2011 income tax bill:

Save More for Retirement

One of the most important tax-savings steps you can take is contributing the maximum to your 401(k) or other tax-deferred retirement plan. If you haven’t done so, max out your retirement savings now by bringing your contribution up to the legal limit. For 2011, you may put as much as $16,500 into a 401(k), 403(b) or 457 plan. If you’re over age 50, you may add an additional $5,500.

Every dollar you contribute means you will pay less income tax. Except for Roth IRAs, all contributions to tax-deferred retirement plans are tax-deductible in the tax year for which you make your contribution.

If you can’t come up with the maximum, bump up your contribution as much as you possibly can. It may seem painful now, but you’ll benefit greatly in the future.