The Retirement COLLAB Blog

Many investors consider diverse investment portfolios desirable because they reduce the overall risk inherent to investing. One of the primary ways to diversify your portfolio is to invest in different asset classes. Before you can do that, though, you need to know a little more about what they are. 

While even the most diverse investment portfolios aren’t immune to risk entirely, risk reduction of any amount can help provide you with peace of mind, particularly when you’re investing as a way to support yourself through retirement.

Only 32% of Americans are investing in 401(k) plans. Even though 59% of American companies offer these plans to their employees, many U.S. citizens opt out of one. If you work for a company that offers a 401(k), it is in your best interest to sign-up, especially if you want to live comfortably after you retire. 

While having a 401(k) is a great investment, people go through rough patches and need additional financial support to help pay for expensive situations. If you have a 401(k), you can get a loan to help you with your finances. Before applying, we want you to know how much a 401(k) loan will actually cost you. 

Real estate owners and investors use the 1031 exchange as a way to build wealth by deferring the capital gains tax. For those unfamiliar, the IRS requires investors to pay taxes on the value of sold investments when that investment realizes a profit. Real estate and other investments are subject to capital gains taxes. 

Named after IRS Section 1031, the exchange has many different variables. All investors must understand the ins and outs of Section 1031 before performing an exchange. It comes with many rules, such as the type of property and certain time frame restrictions. 

Saving for retirement is a big deal. The average American will spend nearly a million dollars between the time they retire and their death. Social Security payments won’t cover those expenses, so having savings and investments is essential. 

One of the most common retirement plans is the 401(k). It’s a benefit that some jobs offer. You and your employer generally get some sort of tax advantage, which makes it a popular choice.

Retirement accounts grow from tax-deductible contributions during employment. After retirement, account withdrawals, or distributions, then become subject to income tax requirements. To many entering retirement, it would make sense to let these accounts sit, accruing tax-deferred value to further build their savings and/or inheritance to pass on. 

The IRS understood this possibility and established required minimum distribution (RMD) rules to prevent account holders from circumventing their tax liability. These rules require account holders to start making annual withdrawals from their retirement accounts when they turn 73 years old.

To ensure they receive taxes on retirement account gains, the IRS established required minimum distribution (RMD) rules on IRAs and similar tax-deferred savings plans. RMD rules require that account owners begin making withdrawals from certain retirement accounts when they reach 73 years of age. 

Without these measures, account holders could potentially let retirement accounts sit to accrue further wealth. If you have other sources of income, you could let these accounts continue earning and then pass them on to your heirs in a tax-exempt scenario. The RMD mandate asserts that you make regular annual withdrawals, ensuring that the IRS receives their taxes.

Let’s just get right to the point; joint tenancy is a legal arrangement involving two or more individuals co-owning property. All parties share equal rights, title, and obligations. “Property” can include bank accounts, businesses, or personal items but joint tenancy most often pertains to real estate. 

These ownership arrangements can be made between business partners, married or unmarried couples, friends, or family members. Joint tenancy also includes right of survivorship. This means that if one owner passes away, the surviving owner(s) can immediately take ownership without going to probate court.

Usually, when people think of estate planning, they imagine filling out a will or establishing a trust. However, some assets allow you to name beneficiaries directly through a process called transfer on death (TOD). 

Transfer on death can be beneficial in various circumstances, particularly if you want to avoid probate. Today we’re going to discuss the ins and outs of TOD and when it is most beneficial. 

Investing in our friends, family, and community is a natural behavior. Sacrificing our time, money and effort to benefit others is altruistic, helping us feel that we provide real value in the world. But for all that you spend to help others, how much do you spend on investing in yourself? 

Investing in yourself is more than setting up a retirement account or buying a home. Rather than planning for the future, self-investment is most often directed toward the present. It manifests in several ways, such as:

The world of family trusts is not just for the fabulously wealthy, the aristocrats, or the savviest of investors. Most do not know what a family trust is, and fewer still ask whether they need one. 

We will cover some of the basics of trusts to help shed some light on a topic that so many people could benefit from.