Retirement

Retirement
The Importance Of Retirement Planning

The importance of retirement planning cannot be overstated. It is never too early to start saving for retirement, and the sooner you start, the better off you will be.

There are a number of retirement savings plans available, and choosing the right one can be difficult. However, there are a few things to keep in mind that will help you make the best decision for your future.

The first thing to consider is how much money you will need to have saved in order to maintain your lifestyle after you retire. This includes things like your mortgage, car payments, insurance, and other bills. You will also need to account for inflation. The cost of living always goes up, so you will need to make sure that your retirement savings will keep pace.

Another important consideration is how long you expect to live in retirement. This will have a big impact on how much money you will need to have saved.

If you plan on retiring at a relatively young age, you will not need as much money as someone who plans on retiring later in life. This is because you will have more time to make up for any money that you may have missed out on by not working.

Finally, you need to think about what you want to do in retirement. Do you want to travel? Do you want to spend more time with your grandchildren? Whatever it is that you want to do, you need to make sure that your retirement savings will cover it.

Most people don’t like to think about retirement, especially if they are still young. Retirement planning is important, however, because it can help ensure that you have enough money to live comfortably when you retire.

There are a number of things to consider when retirement planning, such as how much money you will need to live on and how you will generate that income. You will also need to think about how long you want to work and when you want to retire.

Retirement planning is important because it can help you achieve your financial goals. It can also help you reduce your stress levels and enjoy your retirement more.

If you are not sure where to start with your retirement planning, there are a number of resources available to help you, such as financial advisors, retirement planning calculators and books.

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The Best Time To Start Retirement Planning

No one ever said that retirement planning was easy. In fact, it can be quite confusing and overwhelming at times. There are a lot of different factors to consider, and it can be difficult to know where to start.

However, one thing is for sure: the sooner you start retirement planning, the better. The earlier you start, the more time you have to save and invest, and the more likely you are to achieve your retirement goals.

So, if you haven’t started retirement planning yet, now is the time. Here are a few tips to get you started:

Figure out how much money you’ll need. This is probably the most important step in retirement planning. You need to have a good idea of how much money you’ll need to cover your expenses in retirement. Start by estimating your annual expenses and then multiplying that by the number of years you expect to be in retirement.

Determine your retirement income sources. Once you know how much money you’ll need in retirement, you need to figure out where that money is going to come from. Will you have a pension? Social Security? An IRA or 401(k)? Make sure you understand all of the different options and how they work.

Start saving and investing. This is where the rubber meets the road. You need to start putting away money for retirement now. The sooner you start, the better. Begin with whatever you can afford, even if it’s just a few dollars a week.

Get professional help. Retirement planning can be complex. If you’re not sure where to start or what to do, consider working with a financial advisor. A good advisor can help you develop a retirement plan that’s tailored to your unique situation.

The bottom line is that retirement planning is important. The sooner you start, the better off you’ll be. So, if you haven’t started yet, now is the time.

This article is provided for general education and information purposes only. It is not intended to provide specific legal, tax, or financial advice. You should always consult a qualified professional for advice on your particular situation.

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How To Use A Retirement Calculator To Maximize Your Savings

If you’re like most people, you probably have a retirement savings goal in mind. But how do you know how much you need to save in order to reach that goal? That’s where a retirement calculator can come in handy.

A retirement calculator is a tool that can help you estimate how much money you’ll need to have saved in order to maintain your current lifestyle in retirement. It takes into account factors like your current age, retirement age, expected inflation rate, and current savings.

Using a retirement calculator is easy. Simply enter your information into the tool and it will give you an estimate of how much you’ll need to have saved.

Once you have your estimate, you can start working on a plan to reach your goal. If you’re not on track to reach your goal, a retirement calculator can help you figure out how much you need to save each month to get there.

If you’re already retired, a retirement calculator can also help you determine if you’re on track to maintain your current lifestyle.

No matter what your retirement goals are, a retirement calculator can be a helpful tool in reaching them.

Are you looking for a retirement calculator that can help you maximize your savings? If so, there are a few things you should keep in mind.

First, when you are using a retirement calculator, you need to enter your current age, how much money you have saved for retirement, and how much money you want to have when you retire.

Second, you need to consider how much money you will need to live on in retirement. This includes things like food, shelter, and clothing.

Third, you need to consider how much money you will need to cover your medical expenses in retirement. This includes things like Medicare and Medicaid.

Fourth, you need to consider how much money you will need to cover your leisure expenses in retirement. This includes things like travel and entertainment.

Fifth, you need to consider how much money you will need to cover your taxes in retirement. This includes things like federal, state, and local taxes.

Finally, you need to consider how much money you will need to cover your inflation in retirement. This includes things like the cost of living and the purchasing power of your money.

Keep these things in mind when you are using a retirement calculator to maximize your savings.

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How To Use A Retirement Calculator To Determine When You Can Retire

If you’re like most people, you probably have a retirement goal in mind. But how do you know if you’re on track to reach that goal? A retirement calculator can help.

There are a number of different retirement calculators available online, and each one can give you a different answer, depending on the assumptions it makes. So it’s important to understand how a retirement calculator works before you rely on it too heavily.

Here’s a look at how a retirement calculator works, and some things to keep in mind as you use one.

How a Retirement Calculator Works

A retirement calculator is a tool that uses a set of inputted variables to estimate how much money you’ll need to have saved in order to retire comfortably. The inputs usually include things like your current age, your expected retirement age, your current salary, your expected annual retirement income, and the expected rate of return on your investments.

Based on these inputs, the calculator will estimate how much money you’ll need to have saved at retirement in order to maintain your current standard of living.

Keep in mind that a retirement calculator is just a tool, and it can’t predict the future. So it’s important to use it as a starting point for your retirement planning, rather than relying on it too heavily.

Things to Keep in Mind When Using a Retirement Calculator

There are a few things to keep in mind when you’re using a retirement calculator:

1. The inputs you use will affect the output.

If you want a more accurate estimate, you’ll need to input more accurate data. For example, if you’re not sure how much you’ll need to live on in retirement, you can use your current expenses as a starting point.

2. The calculator is only as good as the assumptions it makes.

A retirement calculator makes a number of assumptions, such as the rate of return on your investments. So it’s important to understand the assumptions that are being made, and to adjust them if necessary.

3. The output is only an estimate.

As we mentioned, a retirement calculator can’t predict the future. So the output is only an estimate, and it’s important to plan for a range of outcomes.

4. You can use a retirement calculator as a starting point for your planning.

A retirement calculator can help you get an idea of how much you need to save for retirement. But it’s only a starting point. You’ll also need to consider things like your investment strategy, your Social Security benefits, and your health care needs.

5. There are a number of different retirement calculators available.

There are a number of different retirement calculators available online. So if you’re not happy with the results you’re getting from one calculator, you can try another.

The Bottom Line

A retirement calculator can be a helpful tool for your retirement planning. But it’s important to understand how it works, and to keep in mind that the output is only an estimate.

If you’re not sure how to use a retirement calculator, or if you want help with your retirement planning, we can help. Contact us today to set up a free consultation.

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The Risks Of Not Investing In A 401k

When it comes to retirement planning, there are a lot of options and strategies out there. But one of the most common and basic questions people have is whether or not they should invest in a 401k.

The answer, in short, is yes – you should absolutely invest in a 401k if you have the opportunity to do so. Here’s why:

You’re essentially leaving money on the table if you don’t.

If your employer offers a 401k plan and you don’t take advantage of it, you’re essentially leaving money on the table. That’s because most 401k plans come with some sort of employer match – meaning that your employer will match a certain percentage of your contributions, up to a certain amount.

For example, let’s say your employer offers a 50% match on 401k contributions up to 6% of your salary. That means that if you contribute 6% of your salary to your 401k, your employer will also contribute an additional 3% (50% of your contribution).

In other words, you’re essentially getting free money by investing in a 401k – so there’s really no reason not to do it.

It’s a great way to save for retirement

Investing in a 401k is also a great way to save for retirement. That’s because 401k contributions are made with pre-tax dollars, which means you’ll be able to reduce your taxable income for the year.

And the more you can reduce your taxable income, the less taxes you’ll have to pay.

In addition, the money in your 401k will grow tax-deferred, which means you won’t have to pay taxes on any investment gains until you withdraw the money in retirement.

It’s a simple and easy way to invest

Investing in a 401k is also a simple and easy way to get started with investing. That’s because most 401k plans offer a limited selection of investment options, which helps to simplify the investment process.

In addition, 401k contributions are typically made automatically through payroll deductions, which makes it easy to save and invest without having to think about it.

You may get access to employer stock

If you work for a publicly-traded company, you may also have the opportunity to invest in employer stock through your 401k plan. And while investing in employer stock comes with its own set of risks, it can also be a great way to boost your retirement savings.

For example, if you had invested $10,000 in Apple stock in 2001, your investment would be worth over $1 million today.

You may be able to take advantage of a 401k loan.

Another benefit of investing in a 401k is that you may be able to take advantage of a 401k loan.

A 401k loan allows you to borrow money from your 401k account, without having to pay taxes or penalties. And while you will have to pay interest on the loan, the interest will go back into your 401k account.

401k loans can be a great way to access cash in a pinch, without having to tap into your retirement savings.

The Bottom Line

Investing in a 401k is a no-brainer for most people. Not only do you get access to employer matching contributions, but you also get to enjoy the benefits of tax-deferred growth and potentially lower taxes in retirement.

So if you have the opportunity to invest in a 401k, be sure to take advantage of it.

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The 401k Limits For 2022 – What You Need To Know

The 401k contribution limits for 2022 have been announced by the IRS. Here’s what you need to know.

The contribution limit for employees who participate in 401k, 403b, most 457 plans, and the federal government’s Thrift Savings Plan will be $19,500.

The catch-up contribution limit for employees aged 50 and over who participate in these plans will remain $6,500.

The contribution limit for employees who participate in SIMPLE retirement accounts will be $13,500.

The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE retirement accounts will be $3,000.

The contribution limit for employees who participate in SEP retirement accounts will remain at the lesser of $58,000 or 25% of compensation.

The contribution limit for employees who participate in SARSEP retirement accounts will remain at the lesser of $75,000 or 25% of compensation.

The contribution limit for employees who participate in qualified retirement plans, such as 401k, 403b, most 457 plans, and the federal government’s Thrift Savings Plan, will be $19,500 in 2022. The catch-up contribution limit for employees aged 50 and over who participate in these plans will remain $6,500.

The contribution limit for employees who participate in SIMPLE retirement accounts will be $13,500 in 2022. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE retirement accounts will be $3,000.

The contribution limit for employees who participate in SEP retirement accounts will remain at the lesser of $58,000 or 25% of compensation in 2022.

The contribution limit for employees who participate in SARSEP retirement accounts will remain at the lesser of $75,000 or 25% of compensation in 2022.

The 401k contribution limits for 2022 have been announced by the IRS. Here’s what you need to know.

The 401k contribution limit for 2022 will be $19,500, an increase of $500 from the limit in 2021. The catch-up contribution limit for those aged 50 and over will remain at $6,500.

The 401k contribution limit is the maximum amount of money that you can contribute to your 401k plan each year. The IRS adjusts the limit each year to keep up with inflation.

The 401k contribution limit is important because it determines how much money you can save for retirement. The more money you can contribute, the more money you’ll have saved when you retire.

If you’re already maxing out your 401k contributions, then you don’t need to do anything differently for 2022. If you’re not maxing out your contributions, then you’ll need to contribute more money to reach the new limit.

If you have any questions about the 401k contribution limits for 2022, please contact a financial advisor.

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The Centers for Medicare & Medicaid Services (CMS) announced the 2016 premiums and deductibles for the Medicare hospital (Part A) and physician and outpatient hospital services (Part B) programs.  Since there was no cost of living increase to Social Security  due to a hold harmless clause in the legislation, most current Medicare recipients will not experience an increase in their Part B premiums.  Those who don’t fall under the hold harmless provision were expected to have had a 52% raise in premiums. Congress acted to avoid that large increase.

Instead, premiums for those people increased 16%.  Note that those recipients not subject to the hold-harmless include people who are not yet collecting their Social Security benefits, those who are enrolling in Medicare for the first time in 2016, and recipients who have higher incomes. Here are the new premiums based on income.

Modified Adjusted Gross IncomeMonthly Part B Premiums per personChange
SingleJointCurrent 2015Starting 2016Income related adjustment (versus the standard premium)Percent Change from 2015
Up to $85,000 and already enrolledUp to $170,000 and already enrolled$104.90$104.90$0.000.0%
Up to $85,000 who are new enrolleesUp to $170,000 who are new enrolleesNA$121.80NANA
$85,001-
$107,000		$170,000-$214,000$146.90$170.50$48.7016%
$107,001-
$160,000		$214,001-$320,000$209.80$243.60$121.8016%
$160,001-
$214,000		$320,001-$428,000$272.70$316.70$194.9016%
Above $214,000Above $428,000$335.70$389.90$268.0016%
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Don’t Rush to Retirement

I loved this article by Robert Laura as it reflects what I continue to see in my financial planning practice.  The idea of retirement can seem very enticing.  We long for an unstructured day with plenty of time for hobbies,  relaxation, and travel.   But many of us take for granted the social and intellectual stimulation we gain from being employed.  As Mr. Laura states in the article:

“Too often, retirement is portrayed as the ultimate goal and sign of freedom, but when people get there, it can feel very empty or hollow. In some cases, it causes people to feel isolated or unimportant because they are being sold on only part of retirement’s true meaning and needs.”

So many of us derive our “relevance” from our career achievements and work environment.  When people retire and lose that “connectedness” and sense of being, they often fall prey to depression, substance abuse, and marital discord.   Mr. Laura tells the story of a friend who retired and feels a loss of purpose:

I said to my buddy, “It must be great being retired … to have the time, money, and freedom to come and help your son like this.”  He paused for a moment, looked me square in the eye, and said, “Bob, don’t ever retire, because the minute you do, you won’t mean anything to anyone anymore.” Those were his exact words, “You won’t mean anything to anyone anymore!”

Furthermore, a decision to retire, especially if it is early, can create other financial planning issues.  In this article from Fox News, 50 is the new 30, the author discusses how how longevity is complicating retirement planning.   To account for the fact that people are living longer they will need to assume that their money needs to last longer, perhaps 10 years longer than they anticipated, and also plan for long term care.  According to the article, statistics show that, “Only a lucky 30 percent of the population is estimated not to need long-term care after age 65”.

Focusing on these long term qualitative and quantitative issues is the essence of successful retirement planning.

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End of Year Checklist- Don’t Forget Your RMDs

If you are over 70 1/2 and have retirement accounts or you have an inherited IRA, you will likely need to take RMDs, or Required Minimum Distributions, by the end of the year.  Failure to do so would result in a penalty of 50% of the amount not taken.

Post 70 ½ RMDs

Once you reach age 70½, you must withdraw at least a minimum amount each year from your tax-deferred retirement savings accounts. This includes your IRAs and any qualified retirement accounts such as 403bs, 401ks, etc. Your annual RMD for 2015 is equal to your retirement account balances as of December 31, 2014 divided by your life expectancy factor according to the Uniform Lifetime Table. (If your spouse, however, is more than ten years younger than you, you will need to use the Joint Life and Last Survivor Table.

Note that if you are still working full time at age 70 ½ you can delay your RMDs for your current workplace retirement accounts until April 1 of the calendar year following the year you retire.  Click here for more information and assistance with your calculation.

Inherited IRAs

You must take RMDs by Dec 31st of the year after funds were inherited.  To determine your RMD for this year you will need to take the balance from December 31st, 2014 and divide by the factor (which is age based) on the single life expectancy table.

Here is the table for RMDs for inherited IRAs and here is a calculator to aid with the calculation

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Congress Kills File and Suspend Strategy for Social Security

Currently, individuals who are married can file for Social Security and then voluntarily suspend their application in order for their spouse (and dependents if they qualify) to file for benefits.

The purpose of this strategy is to:

  1. Allow their spouse to collect benefits under their record. In doing so, their spouse would then allow their own retirement benefit (if they have work experience) to earn delayed retirement credits resulting in an 8% increase per year after full retirement age up to age 70.
  2. Allow the individual who suspended to earn a delayed credit up to age 70.

Note that this strategy was ideal for those couples who both had a work history, particularly higher income households or couples with similar earnings.

Since this strategy allowed both spouses to take advantage of the delayed credit, it was a popular method to maximize Social Security benefits over the couples’ lifespan.

Under the Bipartisan Budget act of 2015, however, this file and suspend strategy will no longer be allowed.  Congress has decided to close this loophole.  Anyone who files for a retirement or spousal benefits will be deemed to have filed for any eligible benefits. Suspension of a benefit will affect other spousal and dependent benefits that were acquired under a restricted application.  To wit, the new law specifically states that “no otherindividual will be eligible for benefits based on the earnings record of the person who voluntarily suspends benefits.”

According to the bill, this change will be effective for individuals who attain age 62 after 2015.  The original bill implied that benefits would be ended for those who were currently receiving benefits, but the language is being revised to clarify that only new suspensions will be affected.

Note that the voluntary suspension is still allowed In order to qualify for delayed credits and claimants who file early can change their mind in the future and delay benefits.

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