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Every Year a Retiree Skips a Roth Conversion Before 73 Costs About $3,500 in Extra Tax Later. Here’s the Math on the Average $167,970 Balance.

finance.yahoo.com ·

Every Year a Retiree Skips a Roth Conversion Before 73 Costs About $3,500 in Extra Tax Later. Here’s the Math on the Average $167,970 Balance.

A retiree who skips converting a portion of their traditional IRA during the pre-determined "gap years" could face an extra $3,500 in taxes later on. This comes from the discrepancy between the tax rate that applies to traditional IRA withdrawals versus the tax rate during a Roth conversion. The average 401(k) balance reached $167,970 at year-end 2025, according to Vanguard's How America Saves 2026 report.

For those who reach the required beginning age (RBA) for RMDs at 73, skipping a conversion could result in a significant tax difference later. The conversion tax is known and can be calculated, whereas the future tax rate is uncertain. Additionally, conversions raise modified adjusted gross income, which can affect Social Security benefits and Medicare premiums.

The head of the $167,970 average balance provides a solid baseline for calculating the potential tax savings from conversions.

Written by urgent.news from Yahoo Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.

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KiwiSaver: Do you get what you pay for?

Paying a higher fee does not mean that investors receive a higher after-fee return.

  • Higher fees don't guarantee better after-fee returns in KiwiSaver funds.
  • Comparing active and passive funds shows similar outcomes after fees.
  • Fees are controllable, but relationship with returns is uncertain.

·rnz.co.nz

With the shareholder return trend in full swing, will investment in companies that pay dividends and repurchase their own shares also take off? 정부는 지난 24일 '기업 밸류업 지원방안' 등을 발표하며 상장사들의 주주환원 확대를 독려했습니다. On the 24th, the government announced measures to support corporate value enhancement, encouraging listed companies to increase shareholder returns. 특히 기업 밸류업 프로그램은 상장사들의 자율적 노력을 유도하기 위해 세제지원 등 다양한 인센티브를 제공한다는 계획입니다. In particular, the corporate value enhancement program plans to provide various incentives, including tax benefits, to encourage listed companies to make voluntary efforts. 이에 따라 배당이나 자사주 소각 등 주주환원 정책이 활발한 기업에 대한 투자자들의 관심이 높아지고 있습니다. As a result, investors' interest in companies with active shareholder return policies, such as dividend payments or share buybacks, is increasing. 한국거래소에 따르면 올해 1월 2일부터 22일까지 국내 상장사들의 배당락일 기준 배당수익률은 코스피가 1.98%, 코스닥이 1.61%입니다. According to the Korea Exchange, from January 2 to January 22, the dividend yield of KOSPI and KOSDAQ based on the ex-dividend date was 1.98% and 1.61%, respectively. 같은 기간 S&P 500의 배당수익률 1.40%보다 높은 수준입니다. This is higher than the 1.40% dividend yield of the S&P 500 over the same period. 키움증권은 26일 보고서를 통해 "주주환원율이 높은 기업에 대한 투자자들의 선호도가 높아지고 있다"며 "배당수익률이 높고, 자사주 소각을 통해 주주가치 제고에 힘쓰는 기업들에 대한 관심이 필요하다"고 밝혔습니다. On the 26th, Kiwoom Securities released a report stating, "Investors' preference for companies with high shareholder return rates is increasing. We need to pay attention to companies with high dividend yields and those that are working to enhance shareholder value through share buybacks." 이어 "지난해 10월 이후 배당주와 자사주 소각 기업들의 주가가 상승하는 경향을 보이고 있다"며 "주주환원 정책이 기업 가치 상승으로 이어지는 모습이 나타나고 있다"고 분석했습니다. The report further analyzed that "since October last year, the stock prices of dividend-paying stocks and companies that repurchase their shares have shown an upward trend, and that shareholder return policies are leading to an increase in corporate value." 그러면서 "올해에는 금융, 에너지, 자동차 업종 등의 기업들이 주주환원 정책에 적극적으로 나설 것"이라며 "특히, 금융업종의 경우 은행, 보험, 증권사들의 순이익 증가세가 뚜렷해 주주환원 확대 가능성이 높다"고 전망했습니다. The report also predicted that "this year, companies in the financial, energy, and automotive sectors will actively pursue shareholder return policies. In particular, the financial sector is likely to see an expansion of shareholder returns, with a clear increase in net profits for banks, insurance companies, and securities firms."

·hani.co.kr

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