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Aim for disability insurance that replaces 60-70% of your income, as this is standard. If you pay premiums with after-tax dollars, this can provide benefits equivalent to 80-85% of your take-home p...
Read moreThe elimination period is the number of days you pay out-of-pocket before disability benefits start, with common options being 30, 90, 180, or 365 days. Choose a period that matches your emergency ...
Read moreOwn occupation pays benefits if you can't perform your specific job duties (highly recommended for specialized professionals). Any occupation only pays if you can't work in ANY job you're qualified...
Read moreTax treatment depends on who paid the premiums. If you pay premiums with after-tax dollars (money you've already paid income tax on), benefits are 100% tax-free. If your employer pays premiums or p...
Read moreDiscretionary income is your Adjusted Gross Income (AGI) minus 150% of the federal poverty guideline for your family size and state. For example, if your AGI is $50,000 and 150% of poverty line is ...
Read moreSAVE (new 2024 plan) charges 5-10% of discretionary income based on loan type with the most generous forgiveness. PAYE charges 10% (20-year forgiveness), IBR charges 10-15% (20-25 year forgiveness)...
Read moreYour Adjusted Gross Income (AGI) from your federal tax return counts. This includes wages, self-employment income, investment income, and taxable retirement distributions. It does NOT include pre-t...
Read moreFor IBR and PAYE, filing separately can dramatically lower payments if your spouse earns significantly more than you, but you'll pay higher taxes and lose many tax benefits (IRA deductions, educati...
Read moreMaximize pre-tax deductions to lower your AGI: contribute to traditional 401(k)/IRA (not Roth), HSA, and FSA accounts. These reduce taxable income, which reduces AGI, which reduces discretionary in...
Read moreDividend Reinvestment Plans (DRIPs) automatically use cash dividends to purchase additional shares of the same stock. Instead of receiving dividend payments as cash, the dividends are reinvested to...
Read moreCompounding occurs when reinvested dividends buy more shares, which generate their own dividends, creating exponential growth. For example, a $10,000 investment with 7% growth and 2% dividend yield...
Read moreIt depends on your goals and life stage. Reinvesting is ideal for long-term wealth building (10+ years) when you don't need the income. If you're retired or need cash flow, taking dividends as inco...
Read moreReinvested dividends are still taxable income in the year received, even though you don't receive cash. Qualified dividends are taxed at 0-20% (preferential rates), while ordinary dividends are tax...
Read moreDRIP offers several advantages: automatic reinvestment (set it and forget it), no trading commissions on most brokers, purchasing fractional shares, dollar-cost averaging into the market, and power...
Read moreDRIP automatically uses your dividend payments to buy more shares of the same stock, including fractional shares. This creates a compounding effect where dividends buy more shares, which pay more d...
Read moreYes, even if you reinvest dividends, you still owe taxes on them in taxable accounts. Qualified dividends are taxed at 0-20% (long-term capital gains rates), while ordinary dividends are taxed at y...
Read moreTake cash dividends when you need income in retirement, want to rebalance your portfolio, believe the stock is overvalued, or want to diversify into other investments. For long-term wealth building...
Read moreDRIP can make a significant difference over decades. For example, a $10,000 investment with 4% dividend yield and 3% dividend growth can be worth $50,000+ more after 30 years with DRIP vs taking ca...
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