How can I make sure my retirement years will be financially comfortable?
To make the most of your retirement years, it’s important that you start saving now. Social Security may only cover about 20% of your retirement income, and personal savings will be required to meet your remaining needs. Every month, you should invest a portion of your income in your future, even if it’s only a few dollars. As your retirement age gets closer, you can set aside a higher percentage of your income for retirement in a tax-advantaged plan. The earlier you start, the more you will enjoy the benefits of compounding interest. And as safe as your money would be in a piggy bank or under your mattress, investing your funds could allow you to do much more with your retirement years.
Developing a Strategy for Retirement
What do you plan on doing when you retire? This affects how much you will need to budget for your retirement. Retirees tend to spend more than they expect with exciting vacations and new hobbies. A good way to plan for your future is to keep a journal for a few months of every dollar you spend. This will help you to determine whether your goal budget is feasible or not.
Also, make sure you understand the Social Security and Medicare benefits that you will receive after retirement. Contact the Social Security Administration to receive a printout of your account which will show you how much you can expect to receive after retirement.
Remember, once you put the money into your retirement account, don’t plan on taking it out until retirement. While it can be used for emergency purposes should they arise, it’s best for you to forget it’s there. That way, once retirement comes, you can be assured that you have some savings to fall back on.
Your Retirement Saving Options
Company plans such as 401(k)s offer simple opportunities to build up your retirement funds. You can contribute directly from your salary, free of taxes. The earnings made on the gains of the contributions is also deferred until withdrawal. Investigate your employer’s plan benefits and find out how much you can contribute.
Use the 401(k) Savings Calculator to determine how much you can save for your retirement by using this investment tool.
Another common personal entry into retirement savings is through an Individual Retirement Account. A big benefit of investing in an IRA rather than other investment accounts is that the earnings you make on your investments are tax deferred, which allows your money to grow faster than it would in a similar taxable account. There are two different types of IRAs, and both are easy to open.
A Traditional IRA allows your assets to grow tax-deferred, and you don’t pay taxes on your earnings until withdrawal. Contributions are often tax-deductible for many users as well. You are eligible if you are younger than the age of 70 ½ for the entire tax year and either you or your spouse has earned income.
Many investors are choosing the alternative Roth IRA, with the advantage being that your investment earnings completely escape taxation. You are eligible if either you or your spouse has earned income and if your modified adjusted gross income (MAGI) has not exceeded certain limits.
Use the IRA Comparison Calculator to determine which plan would work best for you.
Whatever kind of life you imagine for yourself in retirement, saving now will help you to get there. Even if you can only invest a small amount each month, it will go a long way toward making your retirement dreams come true.
How can I prepare for a secure retirement?
Whether you’re just starting your career, or have been working steadily for years, our Wealth Management professionals can help you make the most of your retirement years. We can manage a tax-deferred account, such as an IRA to help build your retirement fund. At the same time, you can be confident that your retirement arrangement will be kept up to date with applicable tax laws and regulations. Whether you choose the investments yourself or have us invest for you, we have the tools and expertise you need to help achieve your retirement goals. We can help with the following:
- Individual Retirement Account (IRA), either self-directed or managed
- Simplified Employee Pension (SEP), either self-directed or managed
- SIMPLE Plans (Savings Incentive Match Plan for Employees), either self-directed or managed
Choosing the right retirement plan for your business is one of the most important financial decisions you can make whether you are self-employed or incorporated, whether you have no employees or many. Not only can you set aside funds for your own financial security, but a retirement plan can also attract quality employees to your company and provide them with the financial incentive to stay.
Our Wealth Management team has the people and the resources to assist you in selecting and implementing a plan that is compatible with your own financial objectives and business policies. After making those decisions, we continue our support by managing your plan’s investments and monitoring its compliance in a changing legal and regulatory environment. We can also assist the employer in participant record keeping and preparing required filings with the Internal Revenue Service and the Department of Labor. We can help with the following:
- Profit Sharing Plans
- 401(k) and 403(b) Plans
- Money Purchase Plans
- Other types of qualified retirement plans
Call us today at 1-888-518-7878!
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First Mid Bank & Trust and First Mid Wealth Management are not registered broker/dealers and are independent of Raymond James Financial Services. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.
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