A major component of financial planning is preparing for your eventual exit from the workforce. Retirement may seem like it is in the far distant future for you, but it is never too soon to start saving up. The average life expectancy continues to climb steadily and people are spending more years in retirement than ever before. This, in conjunction with the rising costs of living, means that you will need to plan carefully if you want to ensure financial security through your golden years. At Gainesville Financial Planner, we will help you come up with a personalized strategy that allows you to meet all of your financial goals. We know how easy it can be to put off saving for retirement when there are other, more pressing goals in front of you. Paying off your student loans, saving up for a house, or sending your kids to college can often take precedence over setting aside money for your retirement. That doesn’t have to be the case, however. Our financial planners will work with you to determine how you can achieve your short-term goals without sacrificing your future.
Saving for Retirement
A Roth IRA is a tax-advantaged retirement savings account that offers many benefits over a traditional IRA. In addition to allowing for tax-free withdrawals, there is no minimum required distribution. You can keep your money in the account indefinitely, and continue contributing after the age of 70 as long as you earn an income. While contributions must be made in cash, there are a range of investment options available to you once the money is in the account. This means that you can use the money to invest in stocks, bonds, mutual funds, ETFs, CDs, and money market funds. There are some differences between Roth IRAs offered by different financial institutions. It is a good idea to ask your financial planner for advice when opening an account.
Why Choose a Roth IRA?
To maximize your retirement income, it is important to choose a savings account that will work in your favor. Because Roth IRAs are funded with after-tax dollars, you are able withdraw your money tax-free during retirement. This can be beneficial if you expect higher taxes in retirement. It should be noted, however, that Roth IRAs are not for everyone. In order to contribute to a Roth IRA, your income needs to fall below a certain threshold. As of right now, the limit is $137,000 a year for an individual and $203,000 a year combined for a couple. There is also a maximum contribution amount of $6000 a year. After the age of 50, this amount will increase to $7000 a year.
Contact Gainesville Financial Planner to discuss your retirement income strategy today. There’s no time like the present to get your future in order. Early planning will make saving for retirement less stressful and allow you time to adjust your strategy to adapt to any unexpected changes in your life.