Retirement planning involves evaluating your current financial standing and creating an accumulation strategy that will help to ensure a desired retirement lifestyle. Because an individual's retirement years can span decades, retirement planning generally dominates other financial goals. A successful plan put into place during the wealth-building lifespan should address ways to maximize growth and tax-efficient distributions, as well as how to leave retirement assets to the next generation.
There are several ways to save for retirement:
- Qualified employer-sponsored plans (401(k)'s, 403(b)'s, 457's)
- Individual retirement accounts (IRA's)
- Personal savings
- Executive deferral plans
Qualified plans are employer-sponsored retirement plans such as 401(k)s and pension plans. While there are contribution limits and strict distribution rules, these plans are popular because of their tax benefits. Generally, employers will make participation even more attractive by matching all or a portion of an employee's contribution. It's important that you choose the optimum plan to benefit the key people in your company.
IRAs are inexpensive, easy to establish and maintain, and also offer favorable tax incentives. They can be created by an individual or provided by an employer. Most people use IRAs to consolidate retirement savings that were previously held in employer-sponsored plans. Our process coordinates your IRA investments with your other savings plans.
You may find that qualified plans, IRAs, and social security won't provide enough money to support your desired retirement lifestyle. By identifying your retirement gap, you can develop a strategy for personal savings invested outside of the traditional retirement vehicle.
Business owners or executives may have access to other tax-advantaged retirement savings vehicles. Nonqualified executive compensation is a generic term used to describe a compensation arrangement that provides retirement income—and, in some cases, death benefits—to key employees of a business.
You know you should be saving for retirement; it’s just a matter of overcoming the minor obstacles in your way. Let guilt be the motivator that propels you to take action and start saving. You don’t want to find yourself at age 60 with little in savings, wondering when—and if—you’ll actually be able to retire.
Remember, saving for your retirement is your responsibility. If you haven’t begun to save, start now. If you’re already saving, see if you can find ways to save more. And if you need guidance along the way, we would be more than happy to sit down with you and help!