Taxpayers can still make last-minute contributions to their traditional IRAs and spousal IRAs by April 15 to get an upfront tax deduction and reduce their 2018 tax bill, according to this article on Kiplinger. They can also make deductible contributions to their health savings accounts and their children's IRAs to lower their taxable income. Freelancers and business owners also have the option of reducing their tax bill by contributing deductible amounts to their self-employed retirement savings plan.
Sixty-two percent of Americans are unaware that they have to start taking required minimum distributions from their traditional IRAs in the year they turn 70 1/2, according to this article on personal finance website Motley Fool, citing data from TD Ameritrade. Retirees have until April 1 of the following year to take the first RMD, with distributions in the subsequent years to be withdrawn by Dec. 31. Those who fail to take the RMD on time will trigger a 50% tax penalty.
When building a nest egg, many clients make the mistake of not taking advantage of the different tax treatments of their savings vehicles, according to this article on USA Today. They also fail to consult a financial advisor who can help them maximize their Social Security benefits and minimize the tax bite on their retirement income. “Thinking about tax-efficient income planning is essential at the beginning of the year because once decisions are made with regard to what types of assets will be used for income, these typically can’t be 'undone,'” says an expert.
Americans can still pursue a comfortable life in retirement even without a $1 million nest egg, according to this article on CNBC. Based on data from International Living, a website for expatriates, seniors can relocate to Italy and live a luxurious retirement for just a monthly budget of $1,524. Other overseas locations that offer luxury and convenience to retirees for less are Bali, Indonesia, Costa Rica, Portugal and Colombia, according to the website.
