Employee retirement savings plans come in two main varieties: the traditional 401(k) and the Roth 401(k). The benefit of a Roth 401(k) over a traditional 401(k) after retirement is that distributions from a Roth 401(k) are tax-free, but there is a little-known situation where distributions can be taxed.
Figuring out how much to save for retirement and when you can safely stop working can be difficult. A growing number of online retirement calculators, many of them free, are available to help. Although these calculators may yield vastly different results, they can still be useful tools.
Driven in part by changing cultural mores and surrogate motherhood, older parents are becoming more and more common. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. If you are a later-in-life parent, you should take into account several special estate planning and retirement considerations.
The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and represents the most significant reform of the U.S. tax code in over 30 years. Before we get into the details, you should be aware that almost everything listed below expires after 2025, and the tax structure reverts to its current form in 2026 unless Congress acts between now and then. However, the corporate tax rate cut from 35 percent to 21 percent does not expire.
Like other Texans who are at or reaching retirement age, your parents may not be particularly interested in discussing estate planning. However, as they continue to get older or develop chronic health issues, you may need to push them into considering it gently.