HOBBIES ARE GOOD FOR YOUR HEALTH

Do you have a hobby? Hobbies can give meaning and purpose to your life in retirement. As Robert Putnam points out in his book, Bowling Alone, it’s easy to discount the importance of hobbies and social engagements. Putnam details the widespread decline in civic engagement, from PTA memberships to neighborhood potlucks and bowling leagues. Over a couple of generations, Americans have misplaced the concept of free time.

SPECIAL PLANS FOR YOUR SPECIAL PEOPLE

Lily is a beautiful, active and full of personality toddler who happens to have Down syndrome. Lily’s parents and I have been friends for years and I have the continuing pleasure of watching Lily and her siblings grow up. While Lily is becoming a physical therapy rock star and hitting all her milestones in a timely fashion, her parents have started planning for the future.

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WHY WE ENJOY OUR HOBBIES

The Merriam-Webster dictionary defines a hobby as “a pursuit outside one’s regular occupation, engaged in especially for relaxation.” Hobbies include anything from playing a musical instrument to gardening, bird watching or sewing. A hobby is a way of focusing on something you enjoy just for the sake of that enjoyment. It may also be a way to clear your mental palette. You could be stressed out by a situation at work or the challenges of raising children and need an escape.

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weigh. For instance, administrative IRA fees may be lower than 401K fees.


Starting at age 70½, owners of traditional IRAs have to make withdrawals from their accounts, according to Fidelity. These are called minimum required distributions. There is no choice about this and not doing so will result in penalties. The exception is Roth IRAs, where there is no minimum required distribution.


Regardless of your age, it is crucial to work with a financial expert and continually review your stock portfolio, bank accounts, investments and assets so you can modify your plans to meet your various financial goals.

The Charles Schwab Corp. defines an individual retirement account (IRA) as one that allows you to save for your retirement and take advantage of tax benefits. There are different types of IRAs, so it is essential to figure out which is appropriate for you. When you understand how withdrawing from your IRA works and know the laws, you can use some tips and tricks to your advantage. You want to plan ahead to be certain your assets will give you the income you need during your retirement years.


Traditional IRAs automatically give you a tax break that can help begin to reduce your annual taxes. Every state has its own rules. People in Kentucky are lucky because IRA withdrawals usually qualify for an exemption from state income tax, even if you are not retired. The laws regarding IRA distributions cater strongly to retirement investors, so being able to exclude most or all of their retirement income from state income tax motivates many people to move to the Bluegrass State.


Other types of IRAs may not be as well known, such as custodial IRAs, which are for kids under age 18 who have earned income. These funds can be used to pay for college.


Anyone looking for extra cash may consider taking a distribution from their IRA regardless of whether or not they are retired. Fidelity Investments says withdrawals made before age 59½ are subject to a 10-percent

ADVICE FOR WITHDRAWING FROM YOUR IRA

penalty as well as state and federal taxes that apply. Kentucky Planning Partners in Louisville named some circumstances in which people can withdraw from an IRA before they reach age 59½ without penalty. These include death, disability, home purchase, unreimbursed medical expenses, medical insurance, higher education expenses, an IRS levy and active duty call-up.


It is a good idea to consult a tax advisor or financial planner about your specific situation to discern the best decision to make. For example, if you have inherited an IRA, there may be a requirement that you begin distributions by a certain date. The IRS notes qualified charitable distributions may satisfy all or part of the required minimum distribution for the IRA. People must report charitable distributions on Form 1099-R for the calendar year the distribution is made.


As you look into the retirement phase of your life, Charles Schwab recommends comparing Roth and traditional IRAs. Each has different features. What is best for one person may not be the most beneficial choice for another. Remember age matters for withdrawals so you can avoid penalties. You also have the option of rolling over an old 401K to an IRA. There are pros and cons here you will want to

JAMIE LOBER

Jamie Lober is a Staff Writer for Living Well 60+ Magazine

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