Insights

Tax-deferred accounts such as IRAs and 401(k) plans are excellent vehicles for saving for retirement. But the IRS imposes a number of distribution requirements that, if not met, can result in penalties.

For those in or near retirement, the age of 70½ is a key transition point: Retirees need to begin planning for required minimum distributions (RMDs) that are taken annually from employer-sponsored retirement plans and traditional IRAs.

Whether an investor benefits from converting assets within a traditional IRA to a Roth account may depend on the amount of time he or she plans to leave the assets invested, estate planning strategies, and his or her willingness to pay the federal income tax bill that a conversion is likely to trigger.

The truth is there is ample motivation to make the most of retirement planning opportunities.

Entering your 50s and behind in your retirement planning goals? Don’t fret. You’ve still got time to get your financial plan back on track.

Detailed budgeting, frequent monitoring of income and expenses, and prompt action to address potential cash flow problems are essential elements of financial planning for retirees.