Quiver Financial News

What is State Disability Insurance (“SDI”)?
State Disability Insurance (“SDI”) is a California state program administered by the Employment Development Department (“EDD”).  SDI provides partial wage replacement when workers are unable to perform their regular or customary work due to physical and mental injuries, illnesses, and other health conditions.
Who is covered by the SDI program?
Almost all workers in California are covered by the program, and may receive benefits if they meet the eligibility requirements.  However, workers in certain jobs cannot get SDI, such as certain domestic workers, independent contractors, election campaign workers, and student workers working for their school. A few employers are permitted to opt out of SDI and to offer comparable benefits through a private plan.  If you are unsure if your employer participates in the SDI program, ask your HR department or manager for information.
What are the requirements for receiving SDI benefits?
To receive SDI benefits, you must have a “disability,” as defined below, and be under the ongoing care of a licensed health care provider or authorized religious practitioner. You must apply promptly, have been working or looking for work when the disability began, and have sufficient past earnings in your “base period.”
What is a “disability” for purposes of SDI??
A “disability” is any mental or physical condition that stops you from performing your usual work (or, if you are unemployed, a condition that stops you from being able to look for work) for more than one week. Almost any health condition may be an SDI disability, including physical illness, mental illness, injuries, surgery, pregnancy, childbirth, and being in treatment for drug or alcohol abuse.  A licensed health care professional (or an authorized religious practitioner) must sign a form stating that your disability is preventing you from working.
What if I am out of work when I become disabled?
A person who is unemployed may become “disabled” and entitled to SDI.  As long as you were actively looking for work when your disability began, and you have earnings in your base period, you can seek benefits.
How do I apply for SDI?
The fastest and easiest way to file a claim is online through the EDD’s website, http://www.edd.ca.gov/. You can also file your SDI claim by mail. You will have to request that a copy of the application be mailed to you via the EDD website or by calling the EDD at 1-800-480-3287 [Eng.] or 1-866-658-8846 [Spanish]. Once you complete the application, you should mail it to the EDD office closest to your residence.
What is the time limit for applying?
You must apply for SDI within 49 days of the date your disability stopped you from working or looking for work.  However, if you miss the deadline, you might still be eligible for SDI if you have a good reason for being late. For example, if you misunderstood something that the EDD told you on the phone and didn’t realize you were eligible for SDI until after the deadline had passed, your application will probably be accepted.
What is a “base period”?
The “base period” is the one-year period that began about 15 to 17 months before the date of your application for SDI benefits.  To find the base period for your SDI claim, use the following table:
If you filed your claim in …
Your base period is the 12-month period ending the previous …
January, February, March
September 30
April, May, June
December 31
July, August, September
March 31
October, November, December
June 30
Each base period is divided into three-month time periods called “quarters.”  To be eligible for SDI benefits, you must have earned at least $300 in one of the quarters of your base period.
What if I don’t have money in my base period because I was unemployed before I became disabled?
There are two rules that may help you if you do not have earnings in your base period due to unemployment:
First, if you have an unexpired claim for unemployment insurance benefits when you are seeking SDI, then you may use the base period you used for your unemployment insurance claim.
Second, if you were unemployed during any quarter of your base period – meaning out of work for 60 or more days and looking for work – you may disregard that quarter and begin your base period three months earlier than the period set forth in the above chart.  For each quarter you were unemployed, you may go back another quarter.
How much will I receive from SDI?
Your benefit amount is calculated based on the amount of earnings you had in the highest-earning quarter of your base period, and is about 60-70 percent (depending on income) of your regular earnings.  In 2018, the maximum amount of SDI you can receive is $1,216 per week.   SDI payments are processed every two weeks.
The entire amount you receive in SDI benefits from a single claim may not exceed the total amount of wages you earned during your base period.
When will I receive my first SDI check?
Every claim for SDI has a seven-day, unpaid waiting period.  Most benefits are issued within two weeks after a properly completed claim is received.
May I use my vacation or sick pay to cover the seven-day waiting period?
Yes.
May I collect unemployment insurance benefits (“UI”) at the same time I’m collecting SDI?
No. If you are ready and able to work but can’t find a job, then UI is the right program for you. If you cannot work at your regular job due to a disability or illness, then SDI is the right program for you.
If I’m injured on the job, am I eligible to collect SDI?
In general, no.  If you’re injured on the job and cannot work, you should qualify for temporary income replacement through Workers’ Compensation.
There are two exceptions.  First, if the amount of money paid to you from your Workers’ Compensation benefits is less than what SDI benefits would pay, then you may make a claim for SDI to cover the difference.  Second, if there is a delay in your Workers’ Compensation application (for instance, if your employer disputes your eligibility, or if you are denied and appeal) you may apply for SDI benefits until the dispute is settled.
If your Workers’ Compensation claim is later approved, you will have to pay back the SDI you received so that you don’t get “double” benefits for the same period of time. If you receive both Workers’ Compensation and SDI benefits for the same injury, be sure that you keep the EDD updated on your Workers’ Compensation claim and the Workers’ Compensation carrier updated on your SDI claim, so that you can avoid an “overpayment.”
My employer offers private, short-term disability insurance (“STD”) covering part of my pay. May I also make a claim for SDI?
Typically, yes.  If the benefits are “integrated,” the EDD will pay you an amount for SDI, and your employer or its insurance carrier will pay you an additional amount to cover some or all of the difference between SDI and your full wages.
If you don’t know whether your employer “integrates” benefits with the EDD, ask your HR department or manager for information.
I have some vacation and sick days. May I use my vacation or sick days at the same time I receive SDI?
You may receive vacation pay and SDI at the same time.
You may not receive full sick pay and SDI at the same time.  You may receive partial sick pay to cover some or all of the difference between SDI and your full wages.  If you are uncertain, you should report to EDD any pay you receive from your employer.
Because of my disability, I must work reduced hours for reduced pay. May I make a claim for SDI?
Yes.  If you have lost wages due to your disability, but are still working, you may make a claim for benefits based on the income you are losing due to your reduced schedule.  You must meet all other requirements.
I am self-employed. Am I covered by SDI?
Self-employed individuals are only covered by the SDI program if they have enrolled in “Disability Insurance Elective Coverage” with EDD and paid the premiums.  Usually you become eligible for benefits after six months of elective coverage.  However, if you worked as an employee prior to your elective coverage, you may have a base period from that employment.
Am I eligible for SDI benefits if I am undocumented, or was undocumented during my base period?
Yes. If you are otherwise qualified, you cannot be denied benefits because you are or were undocumented. You paid into the program and have a right to collect your benefits.
How long will I receive SDI?
You will receive SDI benefits for as long as you remain disabled, as defined, up to a maximum of 52 weeks. However, in some cases a person who is otherwise qualified might not receive a full year of SDI because they do not have enough money in their “account” for a full year of benefits. You will receive a statement from the EDD when you apply telling you how much money is in your reserve account.
What if I attempt to return to work, but I end up needing to go out on disability again?
If you return to work and are able to perform your regular or customary job for more than 60 days, then your disability benefit period is considered ended.  If you stop working again due to disability, you must file a new claim for SDI, and re-establish your eligibility for benefits as of the date of the new claim. If you are eligible for SDI as of the date of your new claim, you are entitled to a new benefit period of up to 52 weeks.
If you return to work for more than 60 days, but do not perform your regular or customary work due to your disability – for example, you work only light duty or only part-time – you may be able to continue your prior disability claim. You will need to show EDD that you did not perform your regular or customary work when you attempted to return to work.
If you return to work for fewer than 60 days, and stop working due to the same disability, you are considered to be within the same disability benefits period. You may continue receiving benefits under your original claim and the 7-day waiting period required by these claims will be waived.
22. What if my disability lasts longer than 52 weeks?
If your disability is expected to or does continue past one year, you may be eligible for Social Security Disability Insurance (“SSDI”) or Supplemental Security Income (“SSI”), depending on the type of disability and how severe it is. See our fact sheet “Short-Term and Long-Term Disability Benefit Programs” for more information on SSDI and SSI.
In addition, some employers provide private insurance, called Long Term Disability Insurance (“LTD”) to their employees with long-term disabilities. If you believe you may be covered by LTD, you should contact your employer to find out about benefits and eligibility and to request a copy of the “Summary Plan Description.”

“Can money buy happiness?” This question has existed for thousands of years. Psychologists, economists, and philosophers have hotly debated the answer.
Even we laymen consider the question often. “If only we had more money,” we tell ourselves, “we could achieve our goals and finally relax!”
While many argue that money can’t buy happiness, others believe that money can buy happiness to some extent. Unhappy with mere debates, many experts have set out to conduct studies that can settle the argument once and for all.
“What did they find in those studies,” you ask?
Today, we’re looking at the relationship between money and happiness, what the studies say on that topic, and what we can learn from them.
Answer: Money Doesn’t Buy Happiness
Many studies have shown that money doesn’t buy happiness beyond a certain point. For instance, economist and psychologist Daniel Kahneman helped conduct a 2010 study for Princeton University.
The study found that as income increases, so does happiness—to a point. Once an individual’s annual income reaches around $75,000, their happiness plateaus. Any additional income beyond that has diminishing returns on happiness.
Kahneman noted that while people with higher incomes reported greater life satisfaction, they did not necessarily report greater happiness on a day-to-day basis.
This creates an important distinction. While money could help someone create a satisfactory living situation, accruing wealth might not help them feel any happier.
Answer: Money Can Buy Happiness
On the other hand, several studies suggest that money can buy happiness.
Matthew Killingsworth, a happiness researcher at the University of Pennsylvania, conducted a study contradicting the idea of a happiness plateau. His research found that life satisfaction increases as individuals earn more money, with no plateau at $75,000.
But do these two contradictory studies cancel each other out? Or can we combine the two to find a deeper truth about humans and their money?
Answer: It’s Complicated
Clearly, the relationship between money and happiness is complex. Various factors are at play, with separate studies coming to different conclusions.
And the reason is simple: humans are complicated!
For example, a study from the University of British Columbia found that happy people tend to prioritize time over money. This means they’re less likely to focus on making more money. Instead, they’re more likely to spend time with family and friends, partaking in their favorite hobbies or other activities they enjoy.
A study from the Wharton School found that people who prioritize experiences over material possessions reported greater happiness. For instance, you might experience greater happiness by spending your money on vacations, concerts or plays, or going out to eat rather than on a TV, clothes, or jewelry.
This seems to be backed up by a joint study conducted by Kahneman and Killingsworth. They aimed to reconcile their conflicting findings on the relationship between income and happiness. They developed a mobile app that prompted participants to rate their happiness at random moments throughout the day, ranging from “very bad” to “very good.” Their study included over 33,000 participants across a broad range of incomes.
Their results revealed that the impact of rising income on happiness depends on a person’s baseline happiness, irrespective of their earnings. Generally happier individuals experienced increased happiness as their income grew, even up to and beyond $200,000. In contrast, those facing daily “miseries” such as heartbreak or grief saw their happiness plateau at around $75,000.
These findings suggest that a mix of factors influences happiness, including income, personal circumstances, and individual outlook. For those struggling with unresolved miseries, money can only alleviate stress up to a point. Once basic needs are met, further income does not increase happiness. On the other hand, for naturally happier individuals, a higher income can continue to boost happiness by providing more opportunities to engage in activities they enjoy.
In simple terms, the more a person prioritizes their own happiness, the more likely they are to use an increased income on things that make them happy.
What does this mean?
While money can buy happiness, it can only do so up to a point. It’s our responsibility as individuals to find the people, things, and activities that make us happy. We also must make an effort to include those things in our lives.
Building strong relationships, pursuing personal passions, and spending money on experiences that foster happiness may be more important for achieving a fulfilling and happy life.
Despite the limits income has on our happiness, it can contribute to greater happiness when used wisely and intentionally. So, the question might not be, “Can money make me happy?” Instead, it seems to be, “If money weren’t an issue, how would I like to spend my time?”
 
 

When it comes to retirement planning, many people never look beyond their employer-sponsored 401(k) plan. And why not? Signing up is simple, there are very few decisions to make, and contributions are automatic.
But, while a 401(k) is a good, well-rounded plan, some retirement savers might want a different option or a secondary plan.
Roth IRAs offer tax advantages that help make them desirable to some retirement savers. But because employers do not typically offer them, they require shopping around on your own for a provider you trust. They also come with eligibility requirements that prevent some people from making contributions.
Because of the additional limits and required effort, learning more about Roth IRAs might be helpful before beginning to shop for a plan. To help, I’ve put together this guide to help you better understand how Roth IRAs work, their eligibility requirements, and how to tell if a Roth IRA is the right choice for you!
Types of IRAs
Several types of IRAs are available to individuals, each with its own rules and benefits. The most common are Traditional IRAs, Roth IRAs, and SIMPLE IRAs. Traditional IRAs offer tax-deductible contributions and tax-deferred growth, but withdrawals in retirement are taxed as ordinary income. SIMPLE IRAs are employer-sponsored retirement plans that allow employer and employee contributions, with the employee’s contributions being tax-deductible.
What is a Roth IRA and How Do They Work?
A Roth IRA is a popular Individual Retirement Account (IRA) type. Roth IRAs offer a few desirable benefits.
First, they offer tax-deferred growth. This means you won’t need to pay taxes on your account’s earnings, even when taking out qualified distributions. Qualified distributions must meet certain qualifications, such as the account holder being 59 1/2 or older or suffering an injury or illness resulting in a permanent disability.
Second, Roth IRA contributions are made with after-tax dollars. This means that, unlike a 401(k), Roth IRA contributions are not tax-deductible. However, because you’ve already paid income tax on these contributions, distributions made during retirement are not considered taxable income. As a result, you can take tax-free distributions.
Third, Roth IRAs are not subject to Required Minimum Distributions (RMDs). This differentiates them from other retirement benefit accounts, which require the account holder to withdraw a minimum amount once they reach a certain age.
Finally, Roth IRAs allow for catch-up contributions. Catch-up contributions offer a higher annual contribution limit for those nearing retirement age (ages 50 and up). For 2023, the contribution limit is $6,500 for those under 50. Those 50 and older can contribute an additional $1,000 for a total of $7,500. The contribution limits (including catch-up contributions) go up regularly, so staying current with the latest limits is important.
Eligibility for Roth IRAs
Roth IRAs have maximum income limits. Those who earn below these limits are eligible to make Roth IRA contributions. The limits are based on your filing status and modified adjusted gross income (MAGI). However, Roth IRAs don’t have a hard, singular earned income limit. Instead, they have “phase-out” ranges. This means that the more you earn, the less you can contribute to a Roth IRA. In other words, Roth IRA contribution limits “phase out” the closer your income gets to the top of the range.
For example, in 2023, the phase-out range for a single tax filer is $138,000 to $153,000. If a single tax filer earns less than $138,000, they can make the maximum contribution of $6,500. If they earn more than $138,000 but less than $153,000, they can still contribute to a Roth IRA. However, their contribution limit lowers (phases out) the closer their income gets to $153,000. If they earn more than $153,000, they can no longer contribute.
The Roth IRA phase-out limits for 2023 are:
$138,000 to $153,000 (Single tax filers)
$218,000 to $228,000 (Married, filing jointly)
$0 to $10,000 (Married, filing separately, living together at any time in the tax year)
How can I tell if a Roth IRA is right for me?
Despite their tax advantages, Roth IRAs aren’t for everyone. Several factors can help determine whether a Roth IRA is the right choice for your retirement. A financial advisor can help you figure out if a Roth IRA can help you save enough for retirement.
Here are a few things to consider when contemplating whether a Roth IRA is right for you:
Tax Bracket
If you expect to be in a higher tax bracket when you retire than you are now, a Roth IRA might be a good choice for you. That’s because higher brackets come with higher tax rates. By paying the taxes now, while you’re in a lower bracket, you’ll pay less in taxes. Over decades, this can save you a lot of tax money and significantly reduce your lifetime tax burden.
Income
As stated above, maximum income limits exist for making Roth IRA contributions. If you earn more than the limit, you might prefer a traditional IRA or an employer-sponsored plan, such as a 401(k) or 403(b).
Time Horizon
One of the most appealing benefits of a Roth IRA is the tax-deferred growth. This can be a huge advantage if you have decades left before retirement. The longer your time horizon, the more lucrative that growth can be. If you’re closer to retirement, you might choose an option with higher contribution limits. That way, you can stash away larger amounts of money right before you retire.
Estate Planning
A Roth IRA is a good option to leave behind as an inheritance for your loved ones. This helps them avoid paying income tax on the distributions they receive, and naming them as retirement plan beneficiaries can also help them avoid estate taxes on their inheritance. This can be a significant advantage compared to other retirement accounts, which may result in a tax burden for your heirs.
Access to Funds
Roth IRAs offer more flexibility in accessing your funds before retirement than traditional IRAs. You can withdraw your contributions (but not earnings) from a Roth IRA at any time without taxes or penalties. While we don’t recommend making withdrawals before retirement, this can be useful in emergencies or for specific financial goals like buying a house or funding education expenses.
Continued Growth in Retirement
Roth IRAs are a good option if you plan on having multiple sources of retirement income. This is especially true if you can afford to live off those other sources of income. Because Roth IRAs don’t have RMDs, leaving them untouched means they can continue to grow throughout your retirement. Additionally, Roth IRAs let you continue to contribute after you reach age 70 1/2, should you choose to do so.
Converting a Traditional IRA to a Roth IRA
If you decide you’d like to convert your Traditional IRA into a Roth IRA, you can do so. It’s called a “Roth conversion” and is a relatively simple process. Once you’ve found a Roth IRA provider, let them know you’d like to convert your Traditional IRA to a Roth account. If both accounts are from the same provider, they should be able to do it fairly easily. If the accounts are with two separate providers, they’ll each ask you to provide some basic information, such as account numbers and amounts.
When you perform a Roth conversion, you’ll need to pay taxes on the amount you convert since your Traditional IRA contributions were made pre-tax.
Roth IRA vs. Workplace Retirement Plans
While Roth IRAs offer many advantages, they don’t work for everyone. If you’d prefer a plan with higher contribution limits, you might consider a plan offered by your workplace. Most employers offer 401(k) plans. However, some might offer a 403(b) or a SIMPLE IRA.
An employer match program is one of the primary benefits of a workplace retirement plan. Through such a program, your employer agrees to contribute to your plan. This is in addition to your own contributions and doesn’t typically count toward your contribution limit. This is essentially free money, and it can go a long way in helping you reach your retirement goals.

May 2023 Stock Market Update - https://youtu.be/xbn9kTVbkcE
In this Stock Market update, Quiver Financial discusses whether the stock market is headed to new all-time highs or getting ready to turn and crash in a ball of flames as we answer some of the more popular investor questions like:
 
1. Is the Bear Market over?
 
2.  If the Stock Market were to fall, how low could it go?
 
3. What you may consider doing NOW if you are retiring in a couple of years or in a couple of decades.
 
4. How you may want to allocate your 401k and retirement investments if the stock market were to decline as a result of the debt ceiling crisis.
 
If you enjoy the video please give it a like and subscribe to our channel.
 
Not intended to be investment advice. Quiver Financial offers Advisory services through Quiver Financial Holdings, LLC and ir registered with the state of CA. Please visit www.quiverfinancial.com for more info. 949-492-6900
00:00 Introduction
00:42 What is going on with the stock market?
07:02 If the market crashes, how low could it go?
09:15 What you may consider doing with retirement savings and 401k allocations
21:07 Close - Get a FREE Portfolio Review

Welcome back to Quiver Financial’s business education, where we educate you the business owner on strategies you should be implementing into your practice to grow and protect your business.
I’m Justin Singletary and I’m joined again with Patrick Morehead.  Today we wanted to share with you an interesting provision in the Secure act 2.0.
If you started or are looking to start a 401k in 2023 listen up.  These Tax credits are huge and a potential game changer for your business.
Tax Credit Covers 100% of New Plan Costs for the First Three Years: This credit can be applied to 100% of your qualified business 401(k) costs such as plan setup and administration. That's up to $15,000 in tax credits over the first three years to offset setup and administration charges for the maintenance of your plan. Most small business wouldn’t incur half of that to start and cover the plan administration costs. 
Here's How It Works: Your business must have at least one employee, besides you as the owner, who earns less than $150,000 a year (a Non-Highly Compensated or NHC employee) to qualify for a tax credit. The tax credit received is the greater of $500 or $250 per NHC employee with a cap of $5,000 applied to 100% of the costs you incurred. So, if your ShareBuilder 401k business cost is $1,200 annually and you have 10 or fewer eligible employees, your tax credit is $1,200 in year one or $3,600 in total over the first three years fully offsetting these costs.
Providing an Employer Match Provides Tax Credits of $1,000 per Employee Employer contributions are typically 100% deductible already. But now businesses with 1-100 employees can receive tax credits too! If you have less than 100 employees, you can qualify for tax credits of up to $1,000 per employee for your first 50 employees for your employer contributions. This applies for those employees earning less than $100,000 per year. The applicable percentage is 100% in the first (year plan begins) and second tax years up to $1,000 per employee, 75% in the third year, 50% in the fourth year, and 25% in the fifth year, and none for subsequent years. Note, there are some added tax credits for employees 51-100 as well, but a lesser percentage. There is no qualification for the credit if you have more than 100 employees. Lastly, for those contributions you receive a tax credit, those likely don't qualify for tax deductions. However, the amount not covered by the credit should be deductible. You'll want to review with your tax accountant.
Here's How It Works: In year one, let’s say your business contributes $15,000 to the plan and you have 10 employees who earn less than $100,000 and all received over $1,000 in employer contributions. You just qualified for $10,000 in tax credits in year one. Let’s keep things constant for this example, so your number of employees and contributions are the same throughout the next five years. You’d receive tax credits of $10,000 in year two, $7,500 in year three, $5,000 in year two, and $2,500 in year three for a total of $35,000 over the five years. That’s powerful stuff! 401(k) plans are truly more affordable than ever for businesses with 1-50 employees.
Auto Enrollment Credit: Auto-enrollment tax credit An eligible employer that adds an auto-enrollment feature to their plan can claim a tax credit of $500 per year for a 3-year taxable period beginning with the first taxable year the employer includes the auto-enrollment feature.

As you approach retirement, you might find yourself with a nice nest egg in your 401k or traditional IRA. However, the looming issue of taxes on distributions you take during retirement might make you reconsider your choices.
The good news: converting to a Roth IRA can provide significant benefits, including tax-free withdrawals and growth. When performing a Roth conversion, it’s important to understand how to do so strategically to maximize tax efficiency.
Today, we’re breaking down how to perform a Roth conversion, its benefits, and how to optimize your retirement planning when doing so.
Why perform a Roth conversion?
The simple version is that Roth accounts remove the tax burden associated with any distributions you take during retirement. This includes required minimum distributions (RMDs). This is because Roth accounts are funded with after-tax dollars. Every time you contribute to a Roth account, you must first pay income tax on the money you contribute. Therefore, RMDs are not considered taxable income. This also allows your Roth account to grow tax-free.
Compare this to a traditional IRA or 401k, which are funded with pre-tax dollars. With these accounts, your contributions can actually lower your tax burden in the year you make them. However, you’ll need to pay income tax on any distributions you take during retirement.
Will you retire in a lower tax bracket? Probably not!
Many people believe they will enter a lower tax bracket after retiring, reducing their overall tax burden. This assumption comes from expecting a decreased income as they move from full-time employment to living off their retirement savings.
The idea of entering a lower tax bracket in retirement is appealing because it could lower your overall tax burden. This would let you keep more of their hard-earned money for personal expenses, leisure activities, and other pursuits.
However, not all retirees move to a lower tax bracket after transitioning away from full-time work. Many will remain in their current tax bracket, while others could actually move up a bracket.
Reasons for not entering a lower tax bracket in retirement include:
No more 401k contributions: 401k contributions are tax-deductible. Once you stop contributing to your plan, you no longer receive this particular tax benefit. This could potentially raise your tax burden.
Erasing your debt: While paying off your debts can offer you more cash on hand during retirement, it can also raise your taxes. This is because many forms of debt (such as student loans and mortgages) are tax-deductible.
Rising taxes: Tax rates are never set in stone. The government recalculates and reconfigures them more regularly than we’d like. A scheduled increase to tax brackets is already coming in 2026, with no way to predict what might happen beyond that date.
Taken together, this reveals an unfortunate truth: much of the advice you’ve received about preparing for retirement could be wrong.
But if these issues actually cause a tax problem after you’ve retired, what can you do?
How do I fix my retirement tax problem?
Now that we know the problem retiring can cause to our tax burden, we can discuss strategies for resolving it. One of the primary strategies for reducing our retirement tax problem is by performing a Roth conversion. Typically, this means converting a traditional IRA to a Roth IRA. However, you could also convert a 401k or other eligible retirement plans into a Roth IRA.
The basic steps required to perform a Roth conversion look like this:
Check eligibility
Decide how much to convert
Open a Roth IRA account with a plan administrator or financial institution
Fill out the conversion paperwork
Pay the tax
Enjoy tax-free growth and income
Does this look too simple? Of course, this is just the bullet-point version of the process. Your financial or tax advisor can walk you through it in more detail. But ultimately, it really is as simple as it looks.
However, you can use a few strategies to maximize your tax savings and create your ideal retirement.
How can I make my Roth conversion more tax efficient?
When considering a Roth conversion, it’s essential to strategize for maximum tax efficiency. This is because the conversion process involves transferring funds from a traditional IRA or 401(k) to a Roth IRA. Doing so could generate a tax bill. However, with careful planning, you can optimize your conversion to minimize taxes and maximize the benefits of your Roth IRA.
In the steps to performing a conversion listed above, the first four are pretty straightforward. It’s step five that gives most people pause. What if I don’t want to pay the tax? It’s this step that kills more Roth conversions than anything else.
Step five is the big one. This step kills more Roth conversions than anything else. What If I don’t want to pay the tax? Most people don’t have the funds available to pay the tax. Or, they would have to take so much out of their 401k that it wouldn’t make sense.
When performing a Roth conversion, consider these strategies for maximizing tax efficiency:
Convert during a low-income year: If you expect to be in a lower tax bracket this year than in future years, you may consider converting to a Roth IRA now. This way, you could potentially pay less in taxes on the conversion.
Spread the conversion over several years: Instead of converting all of your traditional IRA assets to a Roth IRA at once, spread them out over several years. This can help you avoid jumping into a higher tax bracket and reduce the amount of taxes you owe.
Time your conversion with losses: If you have investment losses in your traditional IRA, consider converting those assets to a Roth IRA. This can help offset the gains and reduce the tax bill.
Pay taxes from outside funds: To maximize the growth potential of your Roth IRA, consider using outside funds to pay the taxes on the conversion rather than dipping into your traditional IRA funds.
Of course, these steps merely spread your tax burden around. What if you want to reduce your tax burden?
More good news: we’ve got strategies for that, too!
Offsetting the Income from Roth Conversion
In addition to the strategies mentioned above, consider the following tools to reduce your overall tax burden. These strategies help to offset the income from your Roth conversion. In other words, performing a Roth conversion necessarily increases your taxable income. The strategies below use the tax code to find ways of reducing your end-of-year tax burden.
With the right combination of strategies, the right financial advisor, and a little luck, you could potentially offset your increased tax burden entirely.
To offset the increased tax burden from your Roth conversion, consider the following:
Discounted Asset Valuations: This strategy utilizes illiquid assets. Using the IRS tax code, this analysis takes multiple factors into account to show a paper loss on your assets. Showing a 30% to 50% reduction in your assets at the time of conversion could save you large sums in taxes.
Use Energy IDCs and Solar tax credits: Oil & gas Intangible Drilling Costs (IDCs) allow investors to deduct a significant portion of their investment from their taxable income. Solar tax credits provide a percentage-based credit on the cost of installing a solar energy system. While tax deductions and credits differ, knowing the difference and using both can be an essential tool.
Accelerated Charitable Contributions (DAF) or Conservation Easements: Establishing a Donor-Advised Fund (DAF) allows you to make a sizeable charitable contribution and receive an immediate tax deduction. You can then recommend grants to your favorite charities over time, helping to offset the income tax from your Roth conversion. A conservation easement helps preserve land for environmental or historical purposes. Contributing to one is considered charitable and provides a tax deduction.
Offset the bill with your primary residence: This strategy is specific to the individual using it. In essence, you could finance the tax bill of your Roth conversion over 30 years and tack on another tax deduction.
Please consult an advisor and tax consultant to learn more before implementing these strategies. Everyone is different, and some or all of these strategies may not fit your needs.
How to view your 401k and IRA balance going forward
You might have noticed a trend in the advice above that can provide a helpful way to view your retirement accounts: they are, in essence, future debt. Some accounts can delay the inevitable. However, it’s income, so you’ll eventually need to pay income tax. You’ll always owe the IRS something.
And the longer you let your accounts grow, the bigger this debt becomes. For instance, imagine your account balance currently stands at $500,000. If you’re in the 30% tax bracket, you’d owe the IRS roughly $150,000. If that same account grows to $1M over the next ten years, you now owe roughly $300,000 in taxes.
Key Points to Remember
As you consider converting to a Roth IRA, keep the following key points in mind:
No 10% penalty if younger than age 59 1/2: Those under age 59 1/2 incur a 10% penalty for any early distributions they might take—even when converting to a Roth IRA. You can legally take distributions without penalty if you’re 59 1/2 or older. However, you may face a penalty if you use some of the funds to pay the tax bill.
Insurance products as an alternative: You can also consider rolling the funds into an insurance product that offers similar benefits to a Roth IRA, such as tax-free growth and income, along with a life insurance benefit.
Roth conversions require a strategic approach: Most advisors and CPAs view Roth conversions as a simple process of moving funds and paying the tax. However, a strategic approach is crucial to maximize your tax efficiency and retirement savings.
Consider future tax rates: Consider where taxes might go in the next 5, 10, or 20 years. If you expect tax rates to increase, a Roth conversion might be even more beneficial for you.

Retirement comes sooner than we think. And, while it’s important that we’re emotionally ready for that moment when it comes, it’s just as important that we’re financially ready.
And that means preparing.
For the vast majority of our lives, retirement is decades away. This makes it easy to put off planning for it until later. Unfortunately, once retirement is on the horizon, it could be too late. While there are some benefits to later-in-life investing, early planning often reaps the best benefits.
The best way to prepare for retirement is to set goals and take action to meet them. However, a middle step often gets forgotten: evaluating retirement readiness.
Evaluating retirement readiness helps us determine whether we’re on track to meet our goals. And if not, it helps us take the necessary steps to fix it.
But first, we have to understand what retirement readiness is and how to evaluate it.
What is retirement readiness?
“Retirement readiness” refers to a person’s ability to support themselves financially once they leave the workforce.
While that’s a simple definition, it insinuates something a little more complex: “retirement readiness” is what someone achieves after setting retirement goals and taking appropriate actions to meet or exceed them.
Someone who is retirement ready can afford the expenses of a comfortable lifestyle without working to earn a regular paycheck. They’ve saved enough throughout the years that their retirement income can cover their bills, hobbies, food, recreational activities, travel costs, and more.
But how does one become retirement ready? And what methods are there for checking your retirement readiness?
What is a RISE score?
RISE stands for “Retirement Income Security Evaluation.” Much like a credit score, it evaluates your retirement readiness and assigns a score from 0-850. A simple online calculator can perform the evaluation for you. All you have to do is input financial information, such as expected Social Security benefits, expected pension, how much savings you have, living expenses, etc. Then, the algorithm crunches the numbers and scores your readiness.
The scores represent a scale of readiness and generally equate to:
0-349: Very Poor
350-649: Poor
650-699: Fair
700-749: Good
750-799: Very Good
800-850: Excellent
Keep in mind that these ranges are open to interpretation.
Several websites offer a RISE calculator tool. An online search can provide options for you to choose from.
How to make sure you’re retirement ready
A RISE score can give you an idea of how ready you are for retirement. However, there are a few steps you can take to:
Create a deeper understanding of your retirement readiness, and
Keep you on track for meeting your retirement goals
Some simple steps you can take to make sure you’re retirement ready include:
Create a budget
Creating a budget is perhaps the most fundamental step to ensuring financial health. That’s why I recommend budgets to just about everyone, not just those using them as a tool to prepare for retirement.
A budget is a complete and honest look at your current financial situation: income, necessary expenses, “fun” lifestyle spending, and any other incoming or outgoing funds. By putting everything into a budget, you can compare how much money you earn/have with how much you need/spend.
When creating a budget, including all income and expenses is helpful. While this list isn’t exhaustive, it can serve as a reminder of what to include. Consider including:
Work/earned income
Other sources of income
Mortgage/rent
Loan/credit card debt repayments
Car payments
Groceries
Health insurance/auto insurance/homeowner’s or renter’s insurance premiums
Retirement plan contributions
Other bills (Phones, internet, TV/cable)
Subscriptions (Streaming services, meal kits, etc.)
Medical expenses
Long-term care expenses
Perform a retirement plan review
Is your retirement plan up to date? While your retirement plan might not need updating often, it’s still helpful to review it annually. When performing an annual retirement review, it’s helpful to check your retirement accounts and any other retirement savings you might have. This can help you:
Ensure you’re on track toward hitting your retirement goals
Determine whether you can contribute more/maximize contributions
Discover if you can save money on management fees
Shuffle your investments to match your goals and risk tolerance level better
Perform annual financial checkups
An annual financial checkup takes a full accounting of your finances to determine the overall health of your current financial situation. This can take a little time and effort, but the results give you a complete understanding of what you have now and what you can expect to have in the future.
The good news is both creating a budget and reviewing your retirement plan are part of an annual financial checkup. So, once you perform those first two steps, you’re already well on your way to a complete understanding of your finances.
Performing checkups like this can help you make adjustments to increase your current and future financial health—including during retirement.
Hiring a financial advisor can help ensure you don’t forget any accounts or income. They can also help explain the process and the eventual findings to you.
Which retirement plan should you choose?
When choosing a retirement plan, you have many options. Each has benefits and disadvantages, so your decision depends on your specific goals. Of course, you can have more than one plan to receive the benefits of each.
As always, I would recommend a retirement plan over a savings account. Though savings accounts come with interest rates that help them grow, these rates typically fall far below inflation. This means that, even with interest, the money in a savings account loses value yearly. However, a financial advisor can help you find alternative accounts that can help you earn more on your cash.
The two most popular retirement plans you can choose from are:
401(k) plans
401(k) plans are popular because they’re simple to set up and are widely available. They’re employer-sponsored plans, meaning many companies offer them to their employees—even those who work part-time. Their simplicity even helps small business owners offer employee retirement plans. All employees have to do is sign up and choose how much they’d like to contribute. Contributions typically get invested into a combination of stocks, bonds, and mutual funds.
401(k) contributions are made with pre-tax dollars. This offers two immediate benefits:
First, you don’t pay any income tax on your contributions. This helps your account grow more quickly.
Second, this helps lower your taxes each year you contribute to your plan.
Remember that any distributions you take during retirement are considered taxable income. So, you’ll have to pay income taxes on them at the end of the year.
IRAs
IRAs are Individual retirement accounts. There are several types to choose from, with Roth IRAs among the most common.
Roth IRAs are similar to 401(k)s and offer similar investment options. However, there are two primary differences:
First, they’re not offered by employers, so retirement savers must find and purchase a plan independently.
Second, contributions are made with after-tax dollars. While this means you’ll have to pay taxes on your income before contributing it to your plan, distributions during retirement are tax-free.
Though somewhat less common, you can also purchase a traditional IRA. Like a 401(k), contributions to a traditional IRA are made with pre-tax dollars. This offers the same immediate tax benefits as a 401(k).
Performing a rollover
Any time you leave an employer, you risk accidentally abandoning an employer-sponsored retirement plan. This is a common problem and results in a lot of lost income savings every year.
Rollovers can help transfer funds from an old retirement plan to one with your new employer. Because it concerns employer-sponsored plans, performing a 401(k) rollover is most common.
The process for a rollover is relatively simple. First, you contact your previous plan’s administrator and tell them you’d like to perform a rollover. They can either send the money directly to your new plan (a “direct rollover”) or mail you a check for the balance (an “indirect rollover”).
With an indirect rollover, you have 60 days to deposit the total balance into your new retirement plan. If you fail to complete the rollover within this time limit, it becomes an early withdrawal. This makes it subject to income taxes and hefty penalty fees.

In 2019, the U.S. government recognized the importance of helping people save for retirement. They drafted and passed a law designed to help simplify opening and maintaining retirement accounts.
The original SECURE Act expanded American workers’ access to employer-sponsored retirement plans and extended the age requirements for required minimum distributions (RMDs). These small changes help people open retirement plans, increase their wealth-building potential, and get closer to their retirement income goals.
Recently, Congress passed a new version of the act that includes additional changes to further help Americans save for retirement. These major changes affect the rules surrounding RMDs, when they must be taken, and how.
So, let’s look at the top 3 changes in SECURE Act 2.0.
401(k)s, IRAs, and Roth accounts
Before we discuss how SECURE Act 2.0 impacts your retirement, it might be helpful to talk about the different account options.
A traditional 401(k) is an employer-sponsored retirement plan. You sign up for the account through your employer and make contributions directly from you paycheck. 401(k) contributions usually get invested into a diverse portfolio of stocks, bonds, and index funds.
A traditional IRA is an individual retirement account you open on your own. With the exception of SEP and SIMPLE IRAs, they’re not sponsored by an employer. So, contributions don’t happen automatically. areWhere a 401(k) locks you into choices made by your employer, an IRA offers you a wider array of investment options. This helps you shop around for an account that suits your retirement goals.
Contributions to traditional accounts are made with pre-tax dollars. Because they’re tax deductible, contributions could potentially move you into a lower tax bracket for that year. However, any distributions you take are considered taxable income.
You also have the option of opening either a Roth IRA or Roth 401(k). They work largely the same as traditional accounts. However, contributions to Roth accounts are made with after-tax dollars. While this means you must pay income taxes on them upfront, you can take tax-free distributions.
Because all of these accounts are intended to provide retirement income, any withdrawals made before age 59 1/2 are subject to a penalty fee.
3 Ways SECURE Act 2.0 Changes RMDs
SECURE Act 2.0 offers many benefits for Americans hoping to save for retirement. Some of the newest changes affect the legal requirements surrounding taking distributions.
These three changes help retirees in a couple different ways. First, the changes help retirement savings last longer as life expectancy continues to rise. Second, they help reduce the burden in the event a mistake is made by a taxpayer.
The 3 major changes the SECURE Act 2.0 makes to RMDs are:
Eliminates Roth 401(k) RMDs
Beginning in 2024, those who own a Roth 401(k) will no longer be required to take RMDs.
This hasn’t traditionally been the case. In previous years, a Roth 401(k) was subject to the same RMDs as most other retirement plans. If you reached age 72 and had money in a Roth 401(k), you had to take distributions or be subject to penalties.
However, Roth IRA accounts were not subject to RMDs. Because of this, many of those who owned a Roth 401(k) would roll over their funds into a Roth IRA to avoid RMDs and the penalties associated with them.
Under this new act, that’s no longer the case. By eliminating required distributions, Roth 401(k) savers can experience indefinite investment growth without the added responsibility of performing a rollover or becoming subject to additional penalties.  
Extends the age limits for RMDs
The original SECURE Act extended the age limit for RMDs from 70 1/2 years old to 72. The new 2.0 rules further extend the age limit. However, there might be some confusion over how the new limit works.
This is because the change comes in two tranches. Starting in 2023, RMDs are required starting at age 73. This means that if you turn 73 years old in 2023, you must begin taking distributions from traditional IRAs, 401(k)s, and other retirement accounts subject to RMDs. However, because the law is still brand new, there’s a grace period. Those turning 73 and above in 2023 have until April 1, 2024 to take their first distribution. This grace period only affects 2023’s RMDs. Every subsequent year, distributions must be made by December 31 of that year.
Please note that if you wait until 2024 to take your first RMD, you must take two distributions within that year. You have until April 1 to take 2023’s distribution. 2024’s distribution must be withdrawn before December 31.
The RMD age limit goes up again 10 years later. Starting in 2033, RMDs will only be required for those 75 or older.
RMD penalty reductions
RMDs are enforced with penalty taxes. Traditionally, failure to take a required distribution resulted in a penalty equal to 50% of the amount not withdrawn. For instance, if you were required to take a $1,000 distribution but only withdrew $500, your penalty would be 50% of the portion you failed to withdraw. In this instance, you failed to withdraw $500 and would have to pay a $250 penalty fee.
SECURE Act 2.0 reduces these penalties.
Under the new law, the penalty gets reduced down to 25% of the amount not withdrawn. However, you do have the opportunity to correct this error for a reduced penalty. If you withdraw the remaining portion within the second year after failing to take the RMD, the penalty gets reduced to 10%. For example, if you fail to withdraw the full RMD amount in 2023, you have until the end of 2025 to complete the distribution and receive a lower penalty.
Earning this lower penalty requires additional paperwork. To qualify for the 10% penalty, you must submit Form 5329 with a written explanation.
Other SECURE 2.0 Changes
In addition to changes to RMDs, SECURE 2.0 offers additional benefits to American retirement savers. Some of these other changes include:
Increased catch-up contributions
Catch-up contributions increase contribution limits for those nearing retirement. This helps ensure build up your retirement savings to meet your goals in those last, crucial working years. These increased contributions are currently limited to $7,500 for those 50 or older. Beginning in 2025, those ages 60 to 63 may increase their annual contributions to $10,000.
The IRA catch-up limit of $1,000 remains unchanged.
However, all catch-up limits (including for IRAs) will be indexed to inflation, meaning they could go up every year.
Roth employer match
Previously, employer match programs have been limited to traditional, pre-tax contributions. However, SECURE 2.0 will allow employers to offer after-tax matching contributions to their employees’ account balance. While employees will carry the tax burden of these Roth contributions, it can help lower their income tax bill when they take distributions during retirement.
Automatic enrollment
Starting in 2025, SECURE Act 2.0 requires employers with new 401(k) and 403(b) plans to automatically enroll their employees into the plan. This will help more workers begin saving for retirement. However, employees will have the ability to opt out of retirement plans if they wish.
Additional contribution match
The law adds an additional matching contribution of up to $2,000 for qualified savers. Qualifying for this extra benefit depends on your age, tax filing status, and modified adjusted gross income (MAGI) for the tax year.
No maximum age for IRA contributions
Previously, Americans older than 70 1/2 years old could no longer contribute to their IRA plans. Under SECURE 2.0, anyone contribute to their IRA no matter their age. IRA contributions are still limited to $6,500 for those younger than 50 or $7,500 for those over 50. Those who earn less than that in a year can contribute an amount equal to their earned income.

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Toxic treasuries are a made up thing.  Just because banks own treasuries doesn't make them toxic.  It is how they are held and length of maturity during a rising rate that can cause problems.
Not intended to be investment advice. Advisory Services offered through Quiver Financial Holdings, LLC 949-492-6900 www.quiverfinancial.com
 

Financial checkups are crucial for setting and meeting our financial goals. Unfortunately, it’s one task forgotten by many year after year. While reaching your goals without a checkup is possible, the chances go way up when completing annual financial checkups.
Think of it this way: we all understand that remaining healthy is crucial for a long, healthy life. While diet and exercise help, regular doctor visits keep us updated on how our bodies are doing and what we should do to maintain or improve our health.
Financial checkups work much the same way. By consulting with a professional, we can maintain a stable financial status and provide for our future financial needs. We can also learn how close we are to reaching our goals and what actions we should take to ensure we do.
If you’ve never performed a financial checkup or don’t know how, that’s okay! To help, we’ll outline what a financial checkup is, how to perform one, and how they can help.
What is a Financial Health Check-up?
A financial health checkup is an assessment of your various financial assets and holdings. It reviews your income, expenses, debts, budgets, credit score, and assets to determine where you stand financially and whether you’re on track to meet your financial goals.
By performing an annual financial checkup, you can determine which of your financial habits work best, where you can improve, and whether to reevaluate your long-term goals.
How to Perform a Financial Health Check-up
A financial checkup consists of reviewing all financial holdings and assets. There’s no one way to perform the checkup, but having a plan or checklist can help ensure you’ve covered all your bases. While you can perform a checkup independently, hiring a financial advisor can help ensure a thorough assessment, explain the findings to you, and suggest a course of action for future financial well-being.
When performing a financial health checkup, consider these steps:
Consider major life changes
Financial health can fluctuate with events in your personal life. These can be events that incur a significant financial burden or offer you an unexpected windfall. Alternatively, the changes can offer more subtle changes to your daily budget, income, or expenses.
These should be changes that have occurred since your most recent financial checkup. Consider changes such as:
Marriage/divorce
Having a baby
Major purchases: house/car/etc.
Change of job: promotion/demotion/layoff/etc.
Retirement
Receiving an inheritance
Changes to your health
Review income and expenses
Create a detailed list of income and expenses. This can help you understand whether you’re living within your budget.
If you have more money coming in than going out, that’s great! Earning more than you spend is essential for saving money and ensuring financial health.
If you earn less than you spend, you can determine which expenses are essential, which you can do without, or whether to take action to increase your income.
Affordable budgeting software exists to help you maintain and reassess your budget regularly. Alternatively, you can create a budget with free spreadsheet options like Google Sheets.
Assess your debt
Assessing your total debt is essential for understanding your current financial situation. Listing all debts can help you determine how much you owe and create an approximate payback timeline. It would also help to consider the interest rates tied to each debt. This way, you can prioritize which to pay down first or which should be refinanced.
This can also help you craft a more accurate budget that prioritizes those debts against the rest of your spending.
Consider debts such as:
Mortgages
Personal/student/auto loans
Credit card debt
Healthcare/medical debt
Review retirement savings
Retirement is probably the most long-term savings goal you have. And, because it affects your income once you’ve stopped receiving a regular paycheck, it’s crucial that you meet your goals. Remember that Social Security benefits only cover a fraction of retirement expenses, so you’ll likely need other sources of income.
Consider how much you’ll need to sustain your lifestyle during retirement. It’s important to review all financial accounts designed to provide retirement savings. This includes savings accounts, investment portfolios, and retirement plans. Assess how much you have saved, your growth rates, and whether you’re on track to meet your goals.
Consider reviewing every retirement plan you have, including:
Traditional and Roth 401(k)
Traditional and Roth IRA
Simple IRA
403(b)
Check your credit report
Your credit score can give you a quick assessment of your current finances. Of course, this depends on how accurate your credit report is! Consider checking your credit report for any inaccuracies that could affect your score. An inaccurate credit report could impact your ability to get a loan, the terms of those loans, and the interest rates offered to you.
The three major credit report agencies are legally bound to give you one free report each year. Many websites are available where you can access these reports, with some allowing you to check them regularly at no charge.
Understanding your credit score and which factors are impacting it can help you prioritize which debts to pay down, whether to refinance a loan, or whether to consolidate.
If you do find any inaccuracies, you can contact the credit bureau to have them corrected.
Assess your insurance
Insurance needs can fluctuate. When assessing your finances, you should ensure your insurance coverage meets your needs. This is important for two reasons: first, it helps protect you against unexpected financial hardships. Second, it helps ensure you can afford all your insurance premiums.
Track all your current assets and whether they are or should be insured. Keep in mind that many assets legally require insurance.
Consider:
Health insurance (Including for yourself and your family)
Homeowner’s/Renter’s insurance
Auto insurance
Disability insurance
Long-term care insurance
Life insurance
Review estate plans
No matter the size of your estate, it’s important to plan for what happens in a worst-case scenario. Luckily, your financial checkup has given you a complete understanding of your finances and assets! Consider how those assets impact your will and who you might choose to be your executor, trustee, and any beneficiaries.
Consider your taxes
It’s likely that your employer withholds more than enough to cover your income taxes. However, that’s not a given. The IRS offers a free tool to calculate your optimum withholding amounts to ensure you don’t receive an unexpected tax burden at the end of the year.
But it’s just as important to consider any other tax burdens you might have. Consider items such as estate taxes, property taxes, and gift taxes. This can help you save enough throughout the year to ensure you have enough to cover your taxes.
Reassess your goals
Once you fully understand your finances, you can determine whether your goals need amending. Your financial goals may fall short of your needs. Alternatively, you might not be as close to meeting your goals as you’d assumed.
A financial advisor can help you determine more accurate goals and develop a plan for meeting them that you can follow.
Benefits of a Financial Check-up
A deep understanding of your finances offers many benefits. Performing a checkup annually brings those benefits to you every year. This way, you can keep up with your financial situation and make the most of the benefits available.
Some of the most important benefits of a financial checkup include the following:
Improved Financial Health: A financial health checkup can help you identify areas of weakness in your finances and take steps to improve them. This can help you achieve financial stability and security.
Better Financial Planning: By reviewing your finances, you can set goals for the future and develop a plan to achieve them. This can help you make better financial decisions and avoid financial stress.
Improved Credit Score: Checking your credit report and correcting errors can help improve your credit score, leading to lower interest rates on loans and credit cards.
Increased Savings: By reviewing your savings and investments, you can identify ways to increase your savings, create an emergency fund, and achieve your financial goals faster.
Reduced Financial Stress: Knowing where you stand financially and planning for the future can reduce financial stress and anxiety.
Retirement Readiness: A financial health checkup can help you identify areas where you need to save more, what debt could impact your retirement, and whether you can further optimize your contributions to retirement plans.