The US Department of Labor has issued a new rule that raises standards for investment advice given to retirement savers. Financial professionals must now act as fiduciaries, prioritizing the interests of their clients over their own. This rule aims to protect against conflicts of interest that can lead to unsuitable recommendations, especially in areas like retirement rollovers and insurance products. By implementing this rule, the government hopes to safeguard the significant savings that retirement accounts represent for many Americans.
Under the Secure Act, some heirs must deplete inherited retirement accounts within 10 years, facing penalties if they don't. However, to address confusion, the IRS has delayed penalties for missed withdrawals until 2024. While this may seem convenient, it could lead to larger future distributions and higher taxes. Experts advise weighing one's financial situation and considering starting withdrawals now, especially with potential tax bracket changes on the horizon.
Between 2023 and 2030, millions of baby boomers will retire. However, women face greater financial risks during retirement than men, with lower income, savings, and Social Security benefits. Factors contributing to this include the gender income gap, longer life expectancy, lower risk tolerance, and the financial consequences of caregiving responsibilities. Addressing the root causes of these disparities is crucial, including equal pay and support for women in the financial industry.
Amidst recent layoffs by companies, it's crucial to manage finances. Utilize severance packages and unemployment benefits to temporarily support income. Carefully track expenses, prioritize essential costs, and explore options such as emergency savings, investment accounts, and selling long-term securities. Avoid tapping into retirement accounts due to penalties and taxes. Job loss can be stressful, but with financial planning and support, individuals can navigate this setback effectively.
Married couples can choose to file taxes jointly or separately. Joint filings typically offer lower tax burdens due to higher brackets and a larger standard deduction. However, separate filings may be advantageous for spouses with student loan repayment plans or who prioritize itemized deductions. Filing separately can entail penalties and the forfeiture of specific tax benefits.
