slide1
Download
Skip this Video
Download Presentation
Is Retirement Within Your Reach?

Loading in 2 Seconds...

play fullscreen
1 / 40

Begin contributions as soon as possible. Make maximum contributionsallowed - PowerPoint PPT Presentation


  • 180 Views
  • Uploaded on

Is Retirement Within Your Reach?. Is a retirement plan really necessary?. Your Retirement Goals. What’s your choice?. Retire by age ? Work part-time? Travel? Buy home in warmer climate? Reduce lifestyle? Maintain or increase current lifestyle?.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Begin contributions as soon as possible. Make maximum contributionsallowed' - PamelaLan


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide3

Your Retirement Goals

What’s your choice?

Retire by age ?

Work part-time?

Travel?

Buy home in warmer climate?

Reduce lifestyle?

Maintain or increase current lifestyle?

slide5

When do you plan to retire?

$1

$4

How much to save?

Age 55

Age 35

slide9

Sources of Retirement Income

  • Company Retirement/Pension Plans
  • Social Security
  • Individual savings

Tax deferred or taxable

  • Part time work
slide11

Estimating the Amount to Save

  • Retirement income goal
  • Social Security and Pension income
  • Additional income needed
  • Value of assets currently owned
  • Revised amount to save
slide13

Social Security

  • Contribute for 40 quarters
  • Replacement rates between 59% and 24% depending on income earned
  • Collect full benefits at designated retirement age
slide14

Full Retirement Age by Year of Birth

Year of Birth Full Retirement Age

1937 & earlier 65 years 1938 65 years, 2 months 1939 65 years, 4 months 1940 65 years, 6 months 1941 65 years, 8 months 1942 65 years, 10 months 1943 - 1954 66 years 1955 66 years, 2 months 1956 66 years, 4 months 1957 66 years, 6 months 1958 66 years, 8 months 1959 66 years, 10 months 1960 & after 67 years

slide15

Check Social Security Records

  • SSA will automatically mail your statement of retirement, disability & survivor benefits 90 days before your birthday
  • Use “Requests for Earnings and Benefits Form” from Social Security office or call
  • 1-800-772-1213 or consult web site www.ssa.gov
  • Save IRS W-2 Forms
slide16

Retirement Plans

  • Company Retirement Plans
  • Salary Reduction Retirement Plans
  • Individual Retirement Accounts (Traditional or Roth)
  • Plans for the self-employed
slide18

Maximize benefits from your Retirement Plans

  • Begin contributions as soon as possible.
  • Make maximum contributions allowed, if possible.
  • Choose investments that pay high earnings
slide19

Saving in a Tax Deferred versus a Taxable Account

Years

10

20

30

40

Taxable Account

$ 24,420

$ 59,201

$108,740

$179,279

Tax Deferred

$ 26,414

$ 69,414

$139,679

$253,679

slide20

Individual Retirement Accounts

  • Tax-deferred retirement program
  • Must have earned income or alimony
  • Contribute up to *: $4,000 in 2005-07

$5,000 in 2008

*Amounts shown are for individuals.

Amounts double for couples.

slide21

Traditional Individual Retirement Accounts

  • Fully deductible from income taxes if no retirement plan at work.

OR

  • May be partially or fully deductible based on Adjusted Gross Income.
slide23

Deductible IRA Contributions

Reduce taxable income

Report on 1040 tax form

slide24

Traditional Non-deductible IRA Contributions

File IRS Form 8606 with Federal Tax return

Retain copy permanently

slide25

Investing in Traditional IRAs

  • Check yearly maintenance fees.
  • As IRA grows in value see if fee can be removed.
  • 10% penalty plus taxes on amount withdrawn before age 59 1/2.
roth ira
Roth IRA

Contributions made with after-tax dollars

No mandatory age for withdrawals

No mandatory age limit for contributions

Contributions (after-tax dollars) always available for withdrawal without penalty

roth ira rules
Roth IRA Rules
  • Withdrawals of earnings are not taxed if…
    • Account is 5 years old and
    • You are at least 59 ½ or
    • Earnings up to $10,000 are being

used for first time home purchase

or

    • Higher education for self, family & grandchildren
slide28

Roth IRA Contributions

  • Make contribution to Roth IRA until April 15 for previous year.
  • The 5 year waiting period for tax free withdrawal of earnings begins with the year of the first contribution.
  • Ordinary IRA funds converted to Roth IRA must remain at least 5 years or a 10% penalty will apply.
slide29

Investing in IRAs

Don’t have $4,000 all at once? Consider making automatic monthly payments from checking account or payroll deduction.

slide30

Investing In An IRA

  • Contributions held in a custodial account
  • Accounts can be at any financial institution, bank, credit union, mutual fund company, brokerage account.
  • Invest for high return.
slide31

Timing IRA Contributions

  • Make contributions as early in year as possible
  • Can make previous year’s contribution until April 15th, but tell account custodian it is for the previous year
slide32

IRAs - An Example of Return on Investment

Contributions made only between ages 22-30 (9 years)

  • $2,000 contributed each year
  • Total investment of $18,000
  • At an interest rate of 9% by age 65 will have $579,471
slide33

IRAs - An Example of Return on Investment

Contributions made only between ages 31-65 (35 years)

  • $2,000 contributed each year
  • Total investment of $70,000
  • At an interest rate of 9%, by age 65 will have $470,249
slide34

E. M. I. L. Y.

Early money is like yeast, it helps your dough rise!

slide35

IRA Direct Transfers –

transfer of IRA funds from one IRA custodian to another

slide37

Finding Money to Save

One cup of coffee at $1.00/cup x 5 days x 50 weeks = $250/yr.

One soft drink at $1.00/each x 5 days x 50 weeks = $250/yr.

2 video rentals/week @ $3.00 each x 50 weeks = $300/yr.

One fast food meal/week @ $5.00 = $250/yr.

TOTAL SAVED = $1,050/year

Other ideas?

slide38

Retirement Planning Has Changed!

  • More self-directed
  • No “guarantees”
  • Living longer
  • Portable plans
  • Inflation & taxation
ad