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Retirement Planning

Retirement Planning

Social Security and Medicare are faced with declining revenues and increasing expenses. Now, more than ever, it is up to the individual American to be proactive in saving for retirement.

 

  • Contribute to Employer Retirement Plans such as 401(k)s, 403(b)s, 457s.
    • 2017 maximum contribution is $18,000; 2018 maximum contribution is $18,500.
    • Those 50 and older can contribute an additional $6,000 in 2017 and 2018.

 

  • Contribute to Individual Retirement Accounts (IRAs)
    • 2017 maximum contribution is $5,500
    • 2018 maximum contribution is $5,500
    • Those 50 and older can contribute an additional $1,000 in 2017 & 2018
    • Traditional IRA contributions may be deductible or non-deductible and qualified distributions will be taxable or partially taxable
    • Roth IRA contributions are non-deductible and qualified distributions will be tax free
    • 2017 IRA contributions can be made until April 17, 2018.

 

  • Contribute to Self Employed Retirement Plans such as SEPs, SIMPLEs, Solo 401(k)s
    • Contribution limit varies with plan
    • Additional contributions available to those 50 and older vary by plan.

 

  • Consider making additional investments in taxable accounts or the use of annuities.

 

  • Make a financial plan for your retirement
    • Estimate your retirement expenses.
    • Catalogue available resources for retirement
    • Determine priority order of accessing catalogued retirement assets
    • Calibrate the rate at which to draw down the retirement assets

 

  • Manage retirement assets
    • Allocate assets, include stocks and bonds
    • Rebalance at least annually
    • Consider time period to retirement and time period through retirement
    • Consider risk tolerance

Planning for retirement is daunting, but “failing to plan is planning to fail” and no one wants to fail in retirement. Take action!