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Retire With Ryan

By: Ryan R Morrissey
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  • Summary

  • If you’re 55 and older and thinking about retirement, then this is the only retirement podcast you need. From tax planning to managing your investment portfolio, we cover the issues you should be thinking about as you develop your financial plan for retirement. Your host, Ryan Morrissey, is a Fee-Only CERTIFIED FINANCIAL PLANNER TM who lives and breathes retirement planning. He’ll be bringing you stories and real life examples of how to set yourself up for a successful retirement.
    2020 Retirewithryan.com. All Rights Reserved
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Episodes
  • Financial Steps To Take Before Divorce, #211

    Financial Steps To Take Before Divorce, #211
    Jul 23 2024

    We’ve all heard the statistics that almost half of all marriages end in divorce. And divorce comes at a large cost. That’s why you should come up with a plan for life after divorce. Look at your net worth, put together a budget, and make projections for your future. Let’s get you prepared as you can be.

    To do that, I’m launching a three-part series on navigating the financial considerations when going through a divorce. No one wants to plan for the demise of their marriage. I get it. But if you know you’re about to go through the process, there are steps you can take to make it easier.

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    You will want to hear this episode if you are interested in...
    • [2:04] Do half of all marriages end in divorce?
    • [4:50] Gather key financial documents
    • [7:59] Take a look at your income
    • [8:18] Consider potential job opportunities
    • [9:03] Look at your individual credit score
    • [9:40] Consider working with a financial planner
    Gather key financial documents

    If you aren’t managing the household finances, this is especially important. You need to understand how your household is doing. Gather things like:

    • Checking, savings, and investment account information. You need to know where the money is and how much is held in the accounts.
    • Have an idea of what property you own (which may be easy if it’s simply your primary home). Know the value of any assets you have.
    • What debt do you have? Do you have credit card debt, lines of credit, mortgages, or other personal loans? Know what you owe (and how debt may be split when divorced).
    • What are your household expenses? What are you spending? Look at things like insurance, utilities, home maintenance costs, etc.
    • Do you have any retirement accounts or pensions? What will your Social Security benefits look like?

    Take an in-depth look at all of this information. When you divorce, that net worth will be divided in some way. Getting a handle on that is important to understand the changes you’ll need to make.

    Take a look at your potential income

    You can contact your accountant to get that information if you don’t have it readily available (or can’t get it from your spouse). If you’re not working, it’s time to get a handle on what you may be able to earn if you go back into the workforce.

    If you won’t have income or assets to support yourself, consider the job opportunities available to you. What are your skills? What jobs are out there? Can you improve your skills by taking courses? Do you have any licenses you’ll have to renew?

    What does your individual credit score look like? After a divorce, you might have to take out additional loans for a mortgage, car, student loans, etc. You’ll need good credit to do that. If you don’t have a good credit score, look into ways you can improve it quickly.

    This is a great time to engage a financial planner for assistance. Listen to hear other things you’ll need to consider when going through a divorce.

    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Fiduciary: How to Find, Hire, and Establish an Aligned and Trusted Partnership with a Fee-Only Financial Advisor
    • Revealing Divorce Statistics In 2024
    • Get my free budget template and net worth statement
    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact
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    14 mins
  • 4 Ways To Get More Money Into Tax-Free Roth Accounts, #210

    4 Ways To Get More Money Into Tax-Free Roth Accounts, #210
    Jul 16 2024
    Why would you want to make a Roth contribution? If you believe tax rates will be higher in the future, it could benefit you. How? The contributions grow tax-deferred. When you withdraw the money, it’s tax-free. A tax-free income can be very beneficial in retirement. In 2024, you can contribute $7,000 to a Roth IRA. If you’re over 50, you can contribute $8,000. However, there are income limits for the contributions. Individuals who make over $161,000 can’t contribute. Thanks to the 2017 tax cut, there are some additional ways you can contribute to a Roth IRA. I cover four ways you can get money into Roth accounts in this episode of Retire with Ryan. <> You will want to hear this episode if you are interested in... [1:34] How to make a traditional Roth IRA contribution[4:06] Option #1: The Backdoor Roth IRA[8:06] Option #2: Contribute to a Roth 401K[9:16] Option #3: Do a Roth conversion[13:17] Option #4: A Mega Backdoor Roth IRA Option #1: The Backdoor Roth IRA Let’s say you’re contributing to a Roth IRA indirectly (I talked about this in episode #176). To do that, you have to set up both a transitional and Roth IRA with the same company. Then, you make a non-deductible contribution to your traditional IRA. After that, you fill out a request form to convert that money to the Roth IRA. They’ll move it for you. What’s the biggest mistake you have to avoid when doing this? Listen to find out! Option #2: Contribute to a Roth 401K If you have the option to contribute to a Roth 401K, use it. Why? Because there are no income limits on who can contribute to a Roth 401K. You could make well over the limits to contribute to a Roth IRA and still make a contribution. In 2024, you can contribute $23,000 to a Roth 401K or $24,500 if you’re over 50. Option #3: Do a Roth conversion Currently, everyone can convert money in a traditional IRA or 401K into a Roth IRA or 401K. Let’s say you have $100,000 in an IRA that you want to convert. You’d have to pay Federal and State tax on the $100,000 you’re converting plus any other earned income for the year. When would this make sense? You don’t have to pay a 10% penalty on the conversion if you’re under 59 ½. Secondly, if you think you’ll be in a higher tax bracket in retirement, and don’t need access to the money now, it might make sense to roll it over. It will have time to make back the money you had to pay in taxes upfront. But your plan has to offer a Roth 401K. You’d choose the amount you want to convert from the traditional IRA to the Roth 401K. You’d pay taxes on the amount you’re converting. 40% of 401K plans offer this feature. But you have to consider if the conversion will push you into a higher tax bracket. Option #4: A Mega Backdoor Roth IRA Some 401K plans allow contributions above the traditional $23,500 limit. The IRS has a total pension profit-sharing contribution limit. For 2024, that number is $69,000. That’s the total that your employer can contribute to your retirement plan. Let’s say you and your employer contribute $30,000. Because you haven’t hit the maximum, there’s an additional $39,000 that can be contributed to your 401K as an after-tax contribution. Then you have to convert it to your Roth account. That’s the Mega Backdoor Roth IRA. If you’re over 50, you can also contribute the additional $7,500 catchup. Government 457 plans and most 403B plans don’t allow this after-tax contribution. Many 401K plans do. How do you get the most out of that contribution? Find out in this episode! Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelFiduciary: How to Find, Hire, and Establish an Aligned and Trusted Partnership with a Fee-Only Financial Advisor7 Backdoor Roth IRA Mistakes to AvoidHow a Mega Backdoor Roth IRA Can Accelerate Your Retirement Savings Connect With Morrissey Wealth Management www.MorrisseyWealthManagement.com/contact Subscribe to Retire With Ryan
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    18 mins
  • How To Earn More In Your Health Savings Account, #209

    How To Earn More In Your Health Savings Account, #209
    Jul 9 2024

    One of my favorite ways to save for retirement is through a Health Savings Account (HSA). Too many people overlook a health savings account as a great way to save for retirement and healthcare costs. So how do you get the most bang for your buck out of your HSA? I share some simple strategies that very few people employ in this episode.

    Disclaimer: I don’t work for Fidelity and they do not compensate me for my reviews. I simply believe it’s a great option for my clients.

    You will want to hear this episode if you are interested in...
    • [2:14] What is an HSA?
    • [4:03] The tax benefits of an HSA
    • [4:59] Why put money into an HSA
    • [9:17] The bucket approach with HSAs
    • [10:23] How to grow your HSA
    • [13:48] Action steps
    The benefits of an HSA

    HSA plans are considered a triple-tax-free retirement account. When you contribute money to the plan, you get a tax deduction on the contributions (reducing your taxable income). The money in the HSA can be invested and grow tax-free. When you take the money out to use it for qualified expenses, it’s tax-free. No other retirement account gives you this benefit.

    Let’s assume your HSA is offered through your employer. A good HSA is one that allows you to buy individual stocks and bonds or mutual funds at a low cost. If they don’t offer this, you may want to move to another HSA provider. Outside of employer-sponsored HSAs, my favorite provider is Fidelity.

    If you’re just getting started and you’re not ready to invest the money (it’s being saved for healthcare expenses) you want to at least be earning interest. If you don’t choose the stocks, bonds, or mutual funds you want to invest in, your money is automatically swept into a money market option (with rates around 4.5%).

    How to grow your HSA

    In 2024, a single person can contribute $4,150 to an HSA. If you’re eligible for a family HSA, your limit is $8,300. If you’re over 55, there’s a $1,000 catch-up allowance per year. I would max out your HSA every year and prioritize it beyond your 401K.

    You want to let the money grow so that you’re only spending your gains in the future. That’s why you want to pay most HSA-related expenses out of pocket—not with your HSA. The biggest mistake I see is people spending through their HSA money immediately. When you do that, you won’t see tax-deferred growth. So what do you do instead?

    If you can, track your expenses on a spreadsheet and keep your receipts. When I pay medical bills, it’s entered into my spreadsheet. Let’s say my family spent $15,000 on medical bills over the last six years and my HSA has $30,000 in it. If I wanted to, I could reimburse myself at any point in time for those expenses, tax-free.

    Once you turn 65, you can use the money in your HSA for any expenses. It acts just like a 401K. I share my whole strategy in this episode—don’t miss it.

    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Fiduciary: How to Find, Hire, and Establish an Aligned and Trusted Partnership with a Fee-Only Financial Advisor
    • Qualified Medical Expenses (per the IRS)
    • Fidelity HSA
    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact

    Subscribe to Retire With Ryan
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    17 mins
Economics Personal Finance
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