Investments can play a key role in any financial plan. For individuals, a mix of investment products, income and pension plans can help address short- and long-term goals.
- Mutual Funds
- Certificates of Deposit
- Municipal Bonds
- U.S. Treasury Securities
- Individual Retirement Accounts
- Rollover Plans from previous employers
- Rollover Plans for retirees and individuals getting ready to retire
For employers, I can offer advice on savings and pension plans.
Everyone looks forward to retirement, but not everyone looks forward to planning for it. A strong financial plan can take the hassle out of this process and secure a balance of investment products that may yield the retirement lifestyle everyone dreams of.
While most working Americans will receive Social Security benefits, in most cases, they will not be sufficient to provide a comfortable retirement income. Depending on personal circumstances, either a 401(k) retirement plan or an Individual Retirement Plan can help in accumulating a sizeable retirement account.
Individual Retirement Plans
Another option for retirement planning is to contribute to an Individual Retirement Plan (IRA). IRAs allow a variety of investment options, including variable annuities, stocks, and government securities. There are several types of IRAs, including the Traditional IRA, Non-Deductible IRA, or Roth IRA.
A traditional IRA is funded through after-tax dollars, and can be contributed to even if a client holds another retirement plan, such as a 401(k). A traditional IRA has several tax advantages: all income tax is deferred until money is withdrawn, and the growth of contributions and earnings is generally tax-deferred. The non-deductible IRA is similar to the traditional IRA except that contributions are made with after-tax dollars, and there is no income tax deduction allowed. In contrast to those two options, contributions to a Roth IRA include income tax payments, but when money is withdrawn, it is distributed tax-free.
Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
401(k) Retirement Plans
Employer-sponsored 401(k) retirement plans offer several benefits, including potential employer contributions. Enjoy tax savings by setting aside a portion of pre-tax salary in a tax-deferred investment account, which can also generate compound interest. Depending on the type of plan selected, 401(k) plans can also offer yields from a variety of investment options.
Working together with a financial professional, decide the amount and frequency of 401(k) contributions while taking into consideration contribution limits and employer requirements. Some advantages include:
- Employer contributions in most cases
- Contributions taken from pre-tax salary allow for a reduced tax rate
- Tax deferral of compounding income and growth
- The opportunity to select from a variety of investment products
Other Retirement Planning Options
Depending on the nature of your employment, you may be eligible for other kinds of retirement planning options. For example, 457 plans are designed for independent contractors or employees of a state or local government or a tax-exempt organization. These plans allow participants to exclude certain specified types of salary from their gross income. Other options may include Deferred Compensation Plans and 403(b) plans, which are designed for employees of non-profit corporations and School Districts and Hospitals.
A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages.
• Leave the money in his/her former employer’s plan, if permitted;
• Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
• Roll over to an IRA; or
• Cash out the account value
Contact us today to discuss alternative retirement planning options.
Many investors are careful when choosing where to invest their hard-earned money, particularly given the recent economic downturn.
For this reason, Certificates of Deposit (CDs) are a popular low-risk investment, since they can feature federal deposit insurance. A CD is a deposit account that generally offers a higher rate of interest than a regular savings account. Investors put a fixed sum of money into a CD for a fixed period of time, and when the CD is redeemed, gain the accrued interest, plus the principal amount invested. Several different kinds of CDs are available, including variable rate and long-term CDs.
If a CD is redeemed before it matures, the issuing institutional may enforce an “early withdrawal” penalty or forfeit a portion of the interest.
Contact us today to learn about how Certificates of Deposit can benefit your investment portfolio.
In today’s uncertain investment environment, U.S. Treasuries Securities offer a safe, secure, government-guaranteed option for investors worried about the impact of the recent economic downturn on their savings.
The federal government issues U.S. Treasury securities to raise funds and help pay off its debt. The U.S. government guarantees that interest and principal payments will be paid on time, making securities a source of dependable cash flow.
There are several different kinds of Treasuries Securities, which range from short- to long-term investments. Securities are sold at Treasury auctions, and include treasury bills, notes, bonds, TIPS, and U.S. Savings Bonds.
- Treasury Bills mature in a year or less, and are sold at below par (face) value. When matured, owners can sell them and receive their par value.
- Treasury Notes and Bonds pay a fixed rate of interest on a semi-annual basis until they mature. Treasury notes mature between two to 10 years, while longer-term bonds mature in 30 years.
- Treasury Inflation-Protected Securities (TIPS) pay interest on a semi-annual basis, and their principal value is adjusted twice a year to reflect inflation rates.
Contact us today to learn about how U.S. Treasuries Securities can benefit your investment portfolio.
Business owners can use group retirement and savings plans to help attract and retain quality employees.
Both business owners and their dedicated employees are working towards a safe, secure future. Either provided independently or paired with group benefits, a group savings plan is a convenient, flexible and affordable way for employers to help employees reach their long-term financial goals.
Employees gain instant tax savings for their retirement plan contributions, since they are made using pre-tax payroll deductions. They also receive the peace of mind that comes from knowing every month they are building towards retirement.
A financial planner can help business owners and their valued employees choose group retirement and savings products. Choose from products like:
- 401(k) Plans
- Simplified Employee Pension Plans
- Qualified Retirement Plans
- Other retirement savings plans designed specifically for employee groups
Contact me today to learn about how group retirement and savings plans can benefit your business.