The new year is almost upon us. If you’re like many people, that means it’s time for resolutions. What’s your plan for 2019? Do you want to start exercising or maybe improve your diet? Do you want to take up a new hobby or even further your education?
When you’re thinking about resolutions, don’t forget about retirement planning. You could make 2019 the year you finally take back control of your planning and get your retirement back on track. Below are a few planning steps to consider:
Maximize contributions to your IRA.
Do you contribute to an IRA? If not, now may be the time to start. An IRA can be a powerful savings tool because it offers a variety of tax benefits. In a traditional IRA, the contribution may be deductible, depending on your income. In a Roth IRA, the contribution isn’t deductible, but distributions are tax-free if you’re over age 59½. In both accounts, your earnings accumulate tax-deferred as long as the funds stay in the account. That tax deferral may help you accumulate assets faster than you would in a similar taxable account.
In 2019, IRA contribution limits increase to $6,000. You can contribute an extra $1,000 if you’re age 50 or older.1 You don’t have to contribute the maximum, though. Even a modest regular contribution can have an impact. Consider setting up an automatic contribution to an IRA. If you already have an IRA, look at your budget and see how you can increase your contributions.
Increase contributions to your qualified retirement plan.
If you’re like many Americans, you probably participate in an employer-sponsored retirement plan, such as a 401(k) or 403(b). If so, you may want to increase your contributions. Even a gradual increase can have a big impact on your retirement savings. Your contributions grow tax-deferred, and they may even earn a matching contribution from your employer. Those two factors make an employer-sponsored plan a powerful savings vehicle.
In 2019 you can contribute up to $19,000 to a 401(k) or 403(b). If you’re age 50 or older, you can contribute an additional $6,000 in catch-up contributions.2 Not everyone can afford to put $19,000 per year into a retirement plan, though. You could resolve to simply increase your contributions by 1 percent. The following year, you could raise them by another percentage point. Over time, those increased contributions could compound to a sizable amount.
Create a stream of guaranteed* retirement income.
Today’s retirees face challenges that previous generations didn’t face. There was a time when retirees could count on a company pension and Social Security to fund their retirement. Today, retirees have to shoulder much of that burden with their own savings. Distributions from savings may not be guaranteed*. If you spend too much too soon, or if your investments decline in value, there’s a risk you could outlive your money.
If you’re approaching retirement, you may want to take time in 2019 to guarantee* a portion of your future income. An annuity can be a valuable tool for creating a guaranteed* lifetime income stream that isn’t affected by market volatility. You get a reliable stream of income that lasts no matter how long you live.
Ready to take control of your retirement strategy in 2019? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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