CCH, a part of Wolters Kluwer and a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com) takes a look at state tax rates, changes and compares differences across the nation. “Costs of living are obviously a huge consideration in deciding where to live or retire to,” said Sandy Weiner, JD, State Tax Analyst for Wolters Kluwer, CCH. “Retirees should really do their homework on the types of taxes they’d be responsible for paying and the rates they’d be taxed at when comparing different locations.”
These Baby Boomers are doing what they love. And they used their retirement savings to do it, using a process called rollovers-as-business-startups (ROBS) to finance their businesses.
Editor's note: I am very leery of this new technique, but people are doing it. What happens if the business goes bust and now their retirement nest egg is gone as well?
One reason many people are financially unprepared for retirement is that they tap into their retirement savings before they retire. They tap it when they lose their jobs, or at the onset of poor health, or to pay for a new home. A large percentage cash out retirement savings when they change jobs instead of rolling it over.
Throughout much of our lifetime, we receive income from a single source: our job. That changes when we retire. Most retirees receive income from a variety of places, including Social Security, retirement account withdrawals and increasingly a part-time job, according to a recent Gallup survey of more than 2,000 U.S. adults, including 636 retirees. "Obviously retirement these days is expensive, and you probably need to draw on as many different sources as you can," says Jeffrey Jones, managing editor of Gallup Poll. Here are 10 of the most common ways to pay for retirement:
Each week, I'll describe a few steps you should take during the week. The focus will be on actions that affect your financial security, although some will involve your health and lifestyle, since these topics are all related. The goal is to help you answer important questions such as:
Some franchises are promoting a strategy known as ROBS, which stands for Rollover as Business Start-Ups, where you roll over your IRA to fund the start up cost of the business. The I.R.S. has not prohibited so-called ROBS transactions, but the agency hasn't declared them legal either. Which is a good reason to be very cautious about taking a chance that might cost you penalties and taxes. But I also have another concern about the strategy — and that’s what happens when a business owner attempts to exit from a company formed this way.