Having financial security when you reach retirement is something that will take planning and effort. You will need to stay focused and consistent. Only half of Americans have calculated what they will need for retirement. The entire process of saving for retirement can be very overwhelming. However, there are many resources available to help you along the way.
The first step in this process can be to hire a licensed professional to help with your planning efforts. The main job of a retirement planner is to make sure you have enough money to live on when you reach retirement. They will create a personalized plan for you and help navigate any issues that may arise. Your retirement planner can help with many aspects of your financial planning including how to reduce taxation and estate planning.
One topic your retirement planner will likely present is an IRA. There are different forms of this retirement savings approach, including traditional IRA and Roth IRA. The largest difference between the two is the timing in their tax advantages. With a traditional IRA, you can deduct contributions now and pay taxes on those withdraws later. Whereas with a Roth IRA, you can pay taxes on your contributions now and take advantage of tax-free withdrawals later. Gauging your tax bracket at retirement will be a helpful factor in determining which IRA to choose.
Additionally, taking advantage of employer-sponsored retirement savings (401K) is a great option. A 401K allows employees to save and invest a part of their paycheck before taxes are taken out. When the money is taken from your paycheck, it is automatically invested in funds of the employee’s choosing. With a 401K, the taxing does not happen until the money is withdrawn. Investing in your company 401K as soon as it becomes available is a great idea. You could be leaving money on the table if you do not.
Our team of highly trained professionals are ready to help you with all your financial planning needs. Whether establishing your current financial situation, identifying a course of action or drawing up a plan you can stick to, we will be with you every step of the way.