Graded vesting is a type of vesting schedule in which an employee gradually earns the right to keep their employer-sponsored benefits over time. For example, an employer may offer a 401(k) plan with a vesting schedule that allows employees to keep 100% of their contributions and employer matching contributions after five years of service. This … Read more
A determination letter is a letter from the Internal Revenue Service (IRS) that provides official notice that an employer’s retirement plan is in compliance with federal tax law. The determination letter process is voluntary, but many employers choose to submit their plans for review in order to provide employees with the peace of mind that … Read more
A self-directed Registered Retirement Savings Plan (RRSP) is a retirement savings plan that gives investors the ability to choose and invest in a wide range of assets, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). Self-directed RRSPs are available through many financial institutions in Canada. The main advantage of a self-directed RRSP is that … Read more
The needs approach is a retirement planning strategy that focuses on identifying and quantifying an individual’s future income and expense needs. This information is then used to develop a retirement plan that will provide the necessary income to cover those expenses. The needs approach is a popular retirement planning strategy because it is relatively simple … Read more
A GLWB is a type of retirement income product that provides a guaranteed stream of income for life. The benefit is typically based on a percentage of the account balance, and the payout is typically made monthly. The advantage of a GLWB is that it can provide a measure of financial security in retirement, as … Read more
When you have a vested interest in something, you have a real and official right to it. In the context of retirement planning, a vested interest is an employee’s right to keep their retirement benefits even if they leave their job before retirement. Vesting occurs when an employee meets a certain service requirement, usually five … Read more
Estate planning is the process of organizing and managing your assets and property in preparation for your death. This includes making decisions about how your assets will be distributed, who will manage your affairs, and how your debts and taxes will be paid. Estate planning can also help you plan for incapacity and provide for … Read more
IRS Publication 575 is a document that provides detailed information on pension and annuity income. This includes information on how to report this income on your tax return, as well as how it is taxed. How do I avoid paying taxes on an inherited annuity? There is no one definitive answer to this question, as … Read more
A tax-deferred savings plan is a type of investment account in which contributions and earnings are not subject to current income tax. This allows investors to grow their money more quickly than if they were subject to taxation each year. There are several different types of tax-deferred savings plans, including traditional IRAs, Roth IRAs, and … Read more
A direct transfer is a type of transaction that allows you to move assets from one financial institution to another without having to sell the assets first and then reinvest the proceeds. This type of transaction can be used to roll over retirement account assets, such as a 401(k) or an Individual Retirement Account (IRA), … Read more
