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Preparing for your retirement is not a luxury, but a necessity. Most people cannot live on Social Security benefits alone, which means you must have other income streams to support your lifestyle when you retire. Typically, this will include a 401(k), IRA, Roth accounts, and other investment accounts. Our financial planners can help you create a retirement plan that helps you pursue your financial goals and enjoy your retirement the way you want to.
Having a retirement account is not the same thing as having a retirement plan. While a retirement account can help you save for your future, a plan can help you actively pursue your goals. We like to think of it like training for a marathon, you want to try to hit milestones along the way. Your retirement plan includes a comprehensive strategy for how you can move through your life from now to a comfortable retirement. This includes selecting the investments that make the most sense for you and figuring out when you can or should increase your contributions.
Your retirement plan may focus on maximizing the contributions you make to your 401(k), benefiting from employer contributions. It includes reviewing your plan and investments regularly and making sure your assets are in line with your current objectives. Your retirement plan may also include opening up an IRA or a Roth account to funnel additional contributions into tax-advantaged retirement accounts.
Our advisors can help you keep your retirement accounts on track by creating a contribution plan for you. We’ll help you decide which account types are most helpful to your situtation and how much you need to aim to contribute each year. We can help you set up a Roth retirement account to provide some tax-free income during your retirement years. We’ll also team up with you and your tax advisor help you capture applicable tax savings during the accumulation phase.
The decumulation phase is just as important as the accumulation phase. We will help you figure out how to make your money last through your retirement. The challenge is to meet your goals, find ways to make your wishes happen, and make sure it is done in a way that you don't run out of money.
Typical sources of income during retirement include:
Our retirement planners can help you calculate your income needs during retirement and create an income distribution plan that balances a lower tax burden with your desired monthly net income. When appropriate, we can use annuities to provide a fixed income for you during retirement, much like a paycheck.
Your retirement plan should include a contribution plan to help you build a nest egg during the accumulation phase leading up to your retirement. It should include your contribution amounts and what type of retirement accounts and investments you’ll use. Finally, your retirement should also include an income distribution plan that supports your lifestyle during retirement.
While getting an early start on your retirement savings is ideal, it’s never too late to take action for your future. Even if you’re already retired, an income distribution plan can help you budget for your expenses even when you no longer receive a regular paycheck. Call our retirement planners today to see how we can help you.
How much you need to retire depends on your lifestyle and monthly expenses and the timing of your retirement. If you retire later, your nest egg won’t need to be as big, and you’ll also receive more Social Security benefits. We can help you calculate how much you need to retire and start working on pursuing that goal.
A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.
A traditional IRA offers taxable distributions in retirement, but can benefit you now by allowing you do make tax deferred contributions. Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.
Some IRAs have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.
An annuity is a contract. The annuity company promises an amount of income or value increase under various circumstances in exchange for your contribution and agreement with their terms.
Although it is possible to have guaranteed income for life with a fixed annuity, there is no assurance that this income will keep up with inflation. There is a surrender charge imposed generally during the first 5 to 7 years or during the rate guarantee period. The guarantee of the annuity is backed by the claims paying ability of the issuing insurance company.
Annuities are so widely varied in their function it is hard to give a short answer. We will write a more detailed article on this and link to it soon.
It doesn’t matter if you’re just starting out preparing for retirement or planning to retire in the next decade, a retirement plan can help you pursue your financial goals. Don’t wait to prepare for your financial future. Call our retirement planners today to create a retirement plan that’s tailored to your unique situation and focuses on your specific needs.
We’ll Customize Your Path to Financial Freedom