1. The Goldilocks Rules of Retirement Withdrawals

Withdrawing from retirement accounts isn’t just about timing it’s about getting it “just right.” Ric explained that pulling money out before age 59½ hits you with a 10% early withdrawal penalty, plus income taxes. Wait too long, and the IRS slaps on an even bigger fee: by April 1 of the year after you turn 70½, you’re required to take minimum withdrawals (RMDs), or you could face a 50% penalty.

That’s right between late withdrawals and missing the mark on the amount, you could owe up to 95% in penalties. Ric’s advice? Don’t guess. Work with a qualified tax preparer or advisor who knows how to thread the needle.

2. Saving During Career Interruptions

Mary called in with a common issue: she’s working temp jobs after being laid off and doesn’t know what to do with her leftover income after covering essentials. Ric encouraged her to strike a balance—build emergency savings first, then contribute to retirement, even if it’s just a little.

Skipping savings during tough times might seem logical, but retirement is inevitable. “Don’t stop saving,” Ric said. “Even if it feels small, consistency is key.”

3. Estate Taxes: Federal vs. State

Opening a loved one’s estate can raise unexpected questions. One listener asked about federal estate taxes after her mother-in-law passed. Ric broke it down: if the estate is under $5 million ($10 million for couples), it’s exempt from federal tax under current law. But some states still tax estates separately, so working with an accountant is essential to avoid surprises.

4. Long-Term Care Insurance: A Lifeline for Longevity

If your family tree is full of folks living into their 90s, you should be thinking about long-term care insurance. That was Ric’s advice to a caller whose grandparents lived well into their 90s.

The average cost of long-term care is $84,000 per year, and many people need care for over a decade. Without insurance, this can devastate your savings. Ric’s message was clear: “If you’re likely to live a long time, plan for the years when your health won’t keep up.”

5. Cashing Out Insurance? Know the Tax Consequences

Another caller wondered about taxes on a life insurance cash-out. Ric explained that only the gain the amount received above what was paid in premiums is taxable, and it’s taxed as ordinary income. That rate can be higher than capital gains.

Before cashing out, consider the alternatives. If left intact, the policy’s death benefit may go to heirs tax-free. Make sure you ask the right questions before making irreversible decisions.

6. Carol Joynt’s Financial Nightmare and What We Can Learn

Carol Joynt inherited her husband’s D.C. restaurant and a $3 million tax mess. The IRS came calling, but she was unaware of the fraud. Thanks to “Innocent Spouse” protection, she avoided liability.

Carol’s advice? Don’t be blind to your partner’s finances. Hire an independent accountant. File separate tax returns if you manage money separately. Her story, captured in her book Innocent Spouse, is a wake-up call for anyone who thinks “it could never happen to me.”

7. Roth vs. Traditional 401(k): Which One Wins?

Should you choose a Roth 401(k) or a traditional 401(k)? Ric said if you’re in a high tax bracket (25% or more), go traditional. You get the deduction today, and you’ll likely be in a lower bracket later. Only those in lower brackets (15% or less) should favor Roth contributions, where immediate tax breaks aren’t as valuable.

8. Facing Financial Crisis? Get Help Fast

Ric’s parting advice: if you’re facing IRS problems or financial uncertainty, don’t go it alone. Professionals exist for a reason. And don’t be ashamed of financial struggles. Carol Joynt’s public story shows that resilience starts with transparency.

The Bottom Line

Retirement isn’t just about saving it’s about protecting what you’ve saved. From withdrawal rules to estate planning and insurance needs, the stakes are high and the rules can be punishing if misunderstood. Whether you’re entering retirement or just starting your journey, remember Ric Edelman’s core message: preparation is everything.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.

The post Retirement Rules, Long-Term Care, and the High Cost of Financial Mistakes appeared first on ROI TV.

Let’s start with the numbers. The median 401(k) balances in America tell an interesting story. Under 25? You’re looking at a $3,000 median balance. Ages 25–34? About $15,000. By the time people hit 55–64, that median rises to $88,000. But keep in mind: median means middle-of-the-pack—not average. A few outliers with millions can skew averages, so the median gives a better picture of where most folks really are.

Now, I don’t share these numbers to make anyone feel behind. Quite the opposite. I want you to see these as reference points, not goals. Because your retirement plan needs to fit your life, your income, and your dreams—not someone else’s.

My Go-To Strategies for Growing Retirement Savings

Here’s what I recommend: Start as early as you can, stay consistent, and let time and compound interest do the heavy lifting. Use tax-advantaged accounts like 401(k)s, traditional or Roth depending on your situation, and never leave an employer match on the table. That’s free money—take it!

One small change I love? Increase your contribution rate by just 1% each year. Over time, that can push you closer to the ideal target of saving 15–20% of your income for retirement.

Saving Benchmarks to Guide You

There are some general benchmarks I keep in mind to check my progress:

• By age 30: 1x your income saved
• By 40: 3x
• By 50: 6x
• By retirement: 8–10x

But again, these aren’t one-size-fits-all. If you’re planning to retire early, or your income jumps dramatically later in life, your path might look different. And that’s perfectly okay.

What the Generations Are Saving

I found it fascinating that Gen Z is saving about 7.2% of their income, Millennials about 8.6%, Gen X 10.2%, and Boomers 11.8%. And when you factor in employer contributions, many are hitting that 10–15% sweet spot recommended by financial planners. That’s good news—it means we’re moving in the right direction.

Don’t Make These Common 401(k) Mistakes

One of the biggest mistakes I see is people cashing out their 401(k)s when they change jobs. Nearly 41% of employees do this, and 85% of them take the entire balance. That’s a huge hit—not just in penalties and taxes, but in long-term growth.

If you’re changing jobs, consider rolling your 401(k) into your new employer’s plan or into an IRA. And whatever you do, don’t time the market or jump in and out based on headlines. Stay invested. Stay the course.

Max Out Your Contributions (If You Can)

If you’ve got the budget for it, 2025 contribution limits are generous: $23,500 for most people, and $34,250 for those aged 60–63. If you’re over 50, you also qualify for catch-up contributions. Every dollar counts, especially if you’ve got some ground to make up.

You can also build multiple income streams to reduce reliance on any one source. And don’t overlook the value of Roth accounts for tax-free withdrawals, or HSAs for future medical costs.

Play the Long Game

If there’s one thing I want you to take away, it’s this: consistency wins. Whether you’re 25 or 55, what matters most is making saving a habit and letting your money grow over time.

In your 40s and 50s, assess your progress. Adjust if needed. In your 50s and 60s, finalize your withdrawal strategy and tax plan. Don’t wait until retirement hits you—prepare for it on your terms.

Final Thoughts

Retirement isn’t just about stopping work—it’s about freedom. It’s about having choices. And I truly believe that with the right strategy, anyone can get there.

So start where you are. Save what you can. And increase it over time. I’d love to hear your thoughts—how are you preparing for retirement? Let’s keep the conversation going.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post How to Build a Strong Retirement Plan at Any Age appeared first on ROI TV.