When it comes to retirement, savvy savers know that diversification is key, not in the assets they choose but also regarding the types of accounts they use. By strategically allocating retirement savings across traditional IRAs, Roth IRAs, and taxable brokerage accounts, pre-retirees can optimize their tax situation prior to and during retirement.

Tax diversity simply refers to the practice of spreading investments across different account types that each have distinct tax implications for contributions, growth, and withdrawals. And the significance of such a strategy in one's investment portfolio cannot be overstated.

As the stock market continues to reach record highs, with valuations reaching what some investors fear might be unsustainable levels, concerns about an impending correction have intensified. This nervous market sentiment has led prudent investors to consider rotating a portion of their portfolios toward safer investments that have a tendency to hold up when markets falter.

Historically, when investors seek out safe havens during periods of increased market volatility, they tend to land in one of two places: Treasuries if they’re looking for fixed income solutions, and utilities or consumer staples if they want to stick it out in stocks. But following the Covid-19 bear market that began in early 2020, there has been a shift in market dynamics, where “big tech” has become the new go-to for stability.

For more than a couple centuries, the most powerful long-term wealth generator in the United States has been the US stock market. Consider that since its inception in the 1950’s, the S&P 500 index has returned an average of 10% to investors each year. Thus, the gap between what your cash earns when it’s parked in your bank account and 10% is your opportunity cost. 

But not all Americans own any investments. And many of those that do only get exposure to the stock market through their workplace retirement plan such as a 401(k), 403(b), etc. In fact, according to recent reports, almost 90% of all stocks available for trading are owned by only 10% of investors.

In the modern economy, side hustles, consulting, and freelance work have become increasingly popular ways to supplement income. And in some cases, side projects can even produce more income than traditional full-time employment, though managing the tax implications of these additional earnings can be challenging.

Income from side projects is subject to taxes, just like your paycheck from your full-time job. However, unlike traditional employment, taxes are not automatically withheld from your earnings. Instead, you are responsible for reporting this income and paying the appropriate taxes, including self-employment tax, Social Security, and Medicare.

Each year, tax season brings with it a flurry of decisions and calculations, particularly regarding how to reduce one's overall taxable income. Among these decisions is whether to itemize or take the standard deduction. This can be a critical choice for many taxpayers, but especially high-income earners as they tend to have more complex financial situations that create a larger tax liability.

Whether high-income earners should take the standard deduction depends on their specific financial circumstances, including the amount and type of deductions available to them. And while this group of taxpayers is generally more likely to benefit from itemizing deductions, this is not always the case.

When you think of an estate plan, you likely envision a list of assets to be distributed among your heirs upon your passing. But this outdated viewpoint may be why so few Americans have a formal estate plan. Presumably, drafting an estate plan is viewed as a concern only the wealthy consider.

However, the significance of having a well-structured estate plan cannot be overstated, regardless of income or net worth. An estate plan goes beyond the sheer allocation of assets. It is a comprehensive blueprint that not only safeguards your financial assets from potential legal entanglements and unnecessary taxation, but it can also provide your family with instructions for ensuring the well-being of any minor children in your absence.

For many, Tax Day can be one of great distress and anxiety. Whether it is remembering an entire years’ worth of financial transactions, tracking down receipts, or simply the fear of having to write a big check to the IRS, many taxpayers experience a sense of dread as the April 15 deadline approaches.

The apprehension commonly associated with tax season, however, can be significantly reduced with effective tax planning throughout the year. By adopting a proactive approach, which includes regular reviews and adjustments, the Tax Day deadline becomes less stressful and more routine.

For many high-earners workers in stressful, demanding positions, owning a real estate portfolio that supplements income and allows you to retire early seems ideal. Whether through house hacking, multifamily buildings, short-term vacation, or single-family rentals, the allure of generating passive income through real estate can sometimes be a mirage.

Owning real estate has long been the cornerstone of wealth creation in the United States. However, it does not happen overnight, and what online influencers and message boards often neglect to mention is the actual amount of time and energy required to manage a property. From screening tenants to collecting rent, performing maintenance, and managing online listings, the demands of owning real estate are a significant undertaking.

As retirement approaches, the checklist of financial preparations often includes bolstering savings accounts, fine-tuning investment strategies, and choosing the right healthcare plan. However, one financial strategy that can significantly influence your lifestyle in retirement is paying off your home mortgage.

It is presumably common knowledge that maximizing one’s retirement contributions while in their 50s and 60s is the most sensible thing a pre-retiree can do to prepare for their third act. However, less is said about the impact of being debt free prior to retirement.

When it comes to estate planning, many people make the assumption that their last will and testament has the final word over how their assets will be distributed once they pass. And although it is a reasonable assumption, it is important to recognize that a will, while an integral component of an estate plan, may not be enough to ensure the seamless transfer of assets to your intended beneficiaries.

One often overlooked yet pivotal aspect of estate planning is the significance of keeping beneficiary designations current. Failing to regularly review and update these designations can lead to unintended consequences, potentially cancelling out the entire plan.