Retirement Planning
The Key to Retirement: Planning Early
Retirement may seem far away, but financial decisions today can majorly impact how you live later. If you’ve ever wondered if now is the right time to begin planning for retirement, our experience has taught us a golden rule: the earlier, the better. Our Advisors can help you make sense of the options available to you, separate the good, from the bad, from the best, and, if you’re just beginning to save, help you identify your doable but meaningful starting place.
Employer Retirement Plans
Company-sponsored retirement plans are made available to most full-time employees by their employer. These accounts help individuals save for retirement by allowing them make contributions that may recieve special tax treatment if certian conditions are met. Common company-sponsored plans include 401(k), 403(b), and 457 plans, but even plans of the same type can vary dramatically in their specifications and features. If you want to understand more about how your company’s exact retirement plan works, meet with one of our financial professionals for a complementary overview.
Individual Retirement Accounts
An IRA is a tax-deferred personal savings account that allows you to save for retirement without a company-sponsored plan. You can make tax-deductible contributions (subject to limitations) to your IRA throughout your career, which can then be invested in basic securities such as stocks and bonds.
Traditional IRA
With a traditional IRA—the most common type of IRA—income taxes are deferred until you withdraw funds, so you don’t pay annual federal (and, in many cases, state) income taxes on your earnings. At age 59 ½, you can make taxable withdrawals from the account called distributions. If you choose to take distributions before 59 ½ years old, the government imposes a premature distribution penalty of 10% on your withdrawal. Additionally, when you turn 72 years old, you are required to take distributions by April 1 of the following calendar year.
Roth IRA
Unlike a traditional IRA, contributions to a Roth IRA are considered “after-tax” and therefore not deductible, but you can generally take distributions from the Roth IRA tax-free. This option allows investors to make limited annual contributions toward retirement (dependent on gross income). There is no mandatory age at which you are required to take distributions from a Roth IRA. There is also no premature distribution penalty for amounts you withdraw from the principal, subject to certain requirements.
SECURE Act 2.0
In 2022, the SECURE Act 2.0 introduced major retirement reform legislation, causing significant changes in the rules that govern Roth IRAs and other tax-advantaged accounts. We’ll be happy to meet with you to determine how the SECURE Act may impact you.
Self-Employment Plans
If you’re self-employed, you may be eligible for a specialized retirement plan. Schedule a meeting to learn more about plans for self-employed individuals and small business owners.
Managing Your Wealth
Different investment products can help you work toward a variety of financial goals, including retirement and estate planning as well as education financing. Investors should be aware of the risk/return potential of any investment products they consider purchasing and select appropriate investment products based on your goals, comfort with risk, timeline, and a product’s fees and tax considerations.
Our Wealth Management Advisors can guide you through the growing number and complexity of available investments. It is our job to ensure your investment plan fits your short- and long-term financial goals.
