Achieving the dream of a secure, comfortable retirement is much easier when you have a plan in place well ahead of your retirement date. Start early and work with an advisor to strategically manage your streams of income so you can enjoy your golden years.
To maximize your Social Security payout, you need to be aware of what your benefits are and when to tap into them. In order to receive full benefits, you must wait until you reach the Social Security Administration's full retirement age, which varies based on the year you were born. You can start receiving partial benefits as early as age 62. If you continue to work full-time beyond retirement age, you may be able to increase your benefits, which will be added in automatically from the time you reach full retirement age until you start taking benefits or reach age 70.
Individual Retirement Account (IRA)
IRAs provide an excellent vehicle for tax-advantaged savings beyond what your employer may offer. While there are different variations of both, the two primary types of IRAs are Traditional and Roth.
- Traditional IRA: These potentially tax-deferred retirement plans allow you to avoid paying taxes on contributions and earnings until you withdraw the funds. Both deductible contributions and earnings are then taxed at your regular income tax rate when the money is withdrawn. Contributions can be made as long as you have earned income and you're below age 70 1/2.
- Roth IRAs: Roth IRAs allow for tax-free growth over your lifetime. While contributions are not tax-deductible in the year they're made, withdrawals that are classified as "qualified distributions" are tax-free. Contributions can be made beyond age 70 1/2 with earned income. You can choose when to withdraw funds, thanks to no required minimum distributions.
- Employer-Sponsored Plans: Employer-sponsored retirement savings plans offer employees automatic savings devices with the added benefits of tax breaks and, in some cases, employer-matching. There are several different plans; understand what is available to you and what your responsibilities are in taking advantage of them.
A rollover occurs when you withdraw cash or assets from one eligible retirement plan and contribute it to another eligible plan within 60 days. Rolling over your retirement accounts gives you the chance to consolidate on a tax-deferred basis. You can opt to roll all of your retirement accounts into one account or to roll them into another type of account to increase your earning potential.
Build a portfolio to enhance what you already have. With expert guidance, you can grow your nest egg through a targeted mix of investment options.
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