On the surface, planning for retirement seems fairly simple—save enough money so that you can live comfortably without working. But it’s often far more complicated than this. To help you work toward your retirement goals, Good Life Financial Advisors offers independent retirement planning services in Mt. Pleasant, SC.
Let us help you build and implement a plan that fits your needs. Contact us today to set up an initial consultation.
Retirement planning consists of some obvious questions like how long you’ll need to live off of your retirement and how much you need to live comfortably. These questions are difficult enough, due to the many unknown variables involved. Planning for retirement becomes even more complex once you factor in things such as social security timing, paying off debt, Required Minimum Distributions (RMDs), and medical expenses.
We will work closely with you to help define these variables for your unique situation so that we can work to ensure your plan is in close alignment with your goals.
In addition to factors noted above, there are also a number of retirement accounts to consider. Like all other aspects of financial life, there is no one size fits all approach. It’s about navigating the journey toward retirement in a way that fits your personal financial needs. Each type of account has its pros and cons, and we’ll help you understand each.
401(k) or 403(b)
When you think about retirement accounts, a 401(k) may be the first thing that comes to mind. For many, a 401 (k) is the easiest and best way to start saving for retirement. You can participate in a 401(k) or 403(b) plan sponsored by your employer or set up a solo 401(k).
One benefit of an employee-sponsored 401(k) is that money is automatically deducted from your paycheck. This means that once you set it up, you’re automatically saving for retirement. If your employer offers contribution matching, make sure to take advantage. Otherwise, you’re turning down free money.
There are three different types of IRA accounts; IRA, Simple IRA, and Roth IRA. If you contribute money to an IRA, your money grows, tax-deferred, until you make withdrawals. You may contribute up to $6,000 annually unless you’re 50 or above, in which case you may contribute up to $7,000 annually.
Simple IRAs allow companies with less than 100 employees to set up IRAs with less paperwork.
Roth IRAs allow you to contribute after-tax dollars, but your money grows tax-free. Once you’re 59 ½ years old, you pay no taxes on withdrawals. Another benefit of Roth IRAs is that, unlike regular IRAs, there are no mandatory withdrawals after a certain age. Roth IRAs can be a great option, but if you make over a certain amount, you may not be eligible.
Health Savings Account (HSA)
An HSA is an often underutilized retirement savings account. If you have a high-deductible health insurance plan, an HSA can allow you to save money, tax-free. You can use the money in this account for medical expenses prior to retirement, but you can also use it as a retirement savings account, since any unused money remains in the account. Once you’re 65, you can withdraw the money for any reason, not just medical expenses.
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Do you need assistance with your retirement planning? Our knowledgeable advisors can provide the tools and guidance to help you reach the retirement goals you’ve been working toward.