Updated for 2021 Archives | Darrow Wealth Management

401(k) Plans Forbes Retirement Planning Tax planning Updated for 2021

When to Use Pre-Tax vs Roth 401(k) Contributions

Should you make after-tax Roth or pre-tax contributions to your 401(k)? Roth accounts can be powerful wealth-building tools. But paying tax early doesn't always make sense, especially for taxpayers with significant income. Here's when to consider pre-tax vs Roth 401(k) contributions. Quick recap on pre-tax vs Roth 401(k)s Both pre-tax…

Kristin McKennaDecember 15, 2021

Forbes Tax planning Updated for 2021

Worried About Taxes Going Up? 9 Ways To Reduce Tax

While there likely isn't a magic bullet to wipe out your tax bill, there are ways to layer tax-efficiency into your plan. If you're concerned about the possibility of tax rates going up or just looking to reduce your taxable income in 2021, consider these tax planning techniques. (more…)

Kristin McKennaNovember 8, 2021

Retirement Planning Updated for 2021

What the 4% Rule Gets Wrong About Retirement Income

The 4% rule is one of the most well-known rules of thumb in personal finance. The premise is simple: retirees can withdraw 4% of their starting retirement portfolio annually, plus inflation, for 30 years with a high probability they won't run out of money. Unfortunately, in practice, this withdrawal strategy…

Kristin McKennaNovember 1, 2021

401(k) Plans Diversification Employee benefits Financial Planning Forbes Retirement Planning Tax planning Updated for 2021

Net Unrealized Appreciation Rules for Company Stock in a 401(k)

If you have company stock in your 401(k), you may want to consider whether to take advantage of net unrealized appreciation at retirement. Under the net unrealized appreciation rules, employees can roll over the portion of their 401(k) invested in company stock to a brokerage account and pay tax at…

Kristin McKennaSeptember 13, 2021

Charitable giving Tax planning Updated for 2021 Updated for 2022

How to Donate Stock to Charity: Donor-Advised Funds

Giving appreciated stocks can be a great way to maximize your gift to charity and your tax benefits. When you donate cash, you're giving after-tax dollars. It may reduce your income tax liability if you itemize deductions, but if not, there's no benefit.¹ But when you give an appreciated stock,…

Kristin McKennaAugust 16, 2021

Forbes Tax planning Traditional IRA Updated for 2021 Updated for 2022

Avoid the Double Tax Trap When Making Non-Deductible IRA Contributions

Anyone with earned income can make a non-deductible (after tax) contribution to an IRA and benefit from tax-deferred growth. But it may not be worth it due (in part) to often overlooked ongoing recordkeeping requirements. For many, the biggest risk and most common downfall is significant: paying taxes again when…

Kristin McKennaJuly 13, 2021

Current events Investing Tax & Estate Planning Tax planning Updated for 2021

Will Tax Hikes Hurt Stocks? Impact of Tax Rates on the S&P 500

Between the Biden tax plans and other bills already before Congress, it's likely that some level of tax legislation will make its way into law before 2022. For investors, there's a concern that tax hikes will hurt stocks, a reasonable conclusion. But historically, tax rates have mostly moved independently from…

Kristin McKennaMay 11, 2021

401(k) Plans 403(b) Plans Forbes Retirement Planning Secure Act SEP IRA Traditional IRA Updated for 2021

4 Ways the Secure Act 2.0 Would Change Retirement Planning

If passed, the 'Secure Act 2.0' would significantly alter the retirement landscape. Officially called the Securing a Strong Retirement Act of 2021, the bill is essentially a follow up to the 2019 Secure Act. After passing the House Ways and Means Committee yesterday, the proposed legislation is now going to…

Kristin McKennaMay 10, 2021

Diversification IPO Stock options Updated for 2021 Video

Managing Stock Options in a Direct Listing – Going Public Without an IPO

What happens to stock options if a company goes public without an IPO? A Direct Public Offering (DPO) or direct listing is a way for a company to list itself on a public stock exchange without the traditional Initial Public Offering (IPO) process. If you have employer stock options and…

Kristin McKennaApril 1, 2021

Financial Planning Updated for 2021

5 Financial Tasks to Prioritize in the New Year

There's no better time than the present to get your finances ready for a new year. Unfortunately, for many busy professionals, there just isn't enough time in the day to tackle seemingly non-urgent matters. As a CERTIFIED FINANCIAL PLANNER™ professional, I've seen how unintentional oversights and a lack of planning…

Kristin McKennaJanuary 4, 2021

Updated for 2021