Kiplinger's Personal Finance

As I was reading “How to Prepare for a Really Long Retirement” (Feb.), I kept asking myself, What if federal income taxes don’t go up, and I am not in a higher tax bracket in retirement? I have been reading for years about how everyone should invest in Roth accounts so they don’t have to pay taxes later (when those recommending this idea are suggesting taxes will be higher). In reality, no one knows where income taxes will be in even five years. We have a huge divide on income tax rates in this country and more and more federal politicians wanting to lower income taxes to get elected or re-elected. I have always tried to split my retirement investments between traditional accounts and Roth accounts so that I am…

Spring is the traditional time to buy and sell a home, but advice for buyers and sellers is only a part of our cover-story package on profiting from your home, starting on page 40. We know that our readers, who tend to be established and settled, aren’t trading up (or down) all that often. Many of you have also paid off your mortgage. So we focus on the changing value of the most expensive purchase you’ve ever made. Plus, we explore smart ways to tap your equity, including a reverse mortgage, which can provide retirement income or temporary cash while investments recover from a down market. We also explain financially sound ways to help a first-time buyer, such as a son or daughter, make the leap to homeownership. A changing…

BRINKMANSHIP IS NOTHING NEW in Washington, D.C., but the current showdown over increasing the debt limit is more fraught than most partisan clashes, with potentially far-reaching implications for your investment portfolio and the broader economy. The U.S. hit its borrowing limit in January, but the Treasury Department is taking what Treasury Secretary Janet Yellen calls “extraordinary measures” to prevent the country from defaulting on its debt, now at about $31.5 trillion. These measures could give Congress until June to reach an agreement, but Yellen has said the timing is uncertain. Kiplinger expects Congress to reach an agreement to stave off default, but if history is any guide, it will happen at the last minute. In 2011, an agreement was reached between Congress and the Obama administration on July 31—after Treasury…

At press time, investors appeared to believe that a deal would be reached to raise the debt ceiling. That could change as we get closer to the deadline. In 2011, the S&P 500 index fell by more than 16% in the five weeks before Congress and the Obama administration reached a compromise to lift the debt ceiling. Consider this a good test of your tolerance for risk, along with a reminder of why it’s not a good idea to invest money in stocks that you’ll need in the near future. Retirees should have two to three years’ worth of household expenses in low-risk accounts. David Kelly, chief global strategist for JPMorgan Funds, suggested in a recent report that investors should consider assembling a disaster emergency-response kit, which he likened to…

Bill Parish, senior donated-goods retail consultant for Goodwill, has been directing and supporting the retail operations for Goodwill for more than a decade. This is the time of year when many people clean out their closets for spring cleaning. What does Goodwill need? Clothing is our number-one category, and good-quality clothing is always in demand. But Goodwill appreciates all types of donations, including collectibles, jewelry, antiques, furniture, housewares, shoes, computer items and accessories. What items shouldn’t be donated? Items that shouldn’t be donated at all include firearms, ammunition, fireworks, and broken and unusable items. For other items, local Goodwill team members can advise you on what can or can’t be donated. There are local and regional laws that cover certain items. For example, some municipalities don’t allow the resale of…

WHEN WORKERS CHANGE jobs, they usually pack up their photos and coffee mugs, but they often leave behind a far more valuable asset: their 401(k) plan. Worse, many employees with small balances in their plans cash them out, which could jeopardize their long-term retirement security. In an effort to encourage workers to leave money in their plans, three of the largest retirement-plan administrators, Fidelity Investments, Vanguard Group and Alight Solutions, are launching a service that will automatically roll over 401(k), 403(b) and 457 accounts with small balances to a new employer’s plan. The providers will use a service developed by Retirement Clearinghouse LLC, a financial technology company that works with retirement-plan sponsors. The Portability Services Network, which is expected to become available for some employees as early as this summer,…