Approaching retirement? Worried you’re behind on your savings? There’s good news. You have a powerful tool, known as a catch-up contribution, at your disposal. As the name suggests, the catch-up contribution is designed to help you catch up on your retirement savings. It’s an extra amount that the IRS allows you to contribute to your qualified accounts once you turn 50.
Catch-up contributions are so effective because they help you add money to qualified, tax-deferred accounts, such as your 401(k) and IRA. You don’t pay taxes on growth as long as your funds stay inside the account. That tax deferral may help your assets grow at a faster rate than they would in a taxable account.
You can also use catch-up contributions to reduce your taxes today. Contributions to a traditional IRA are tax-deductible. Similarly, your 401(k) contributions are deducted pretax from your paycheck. That means the contributions reduce your taxable income, which in turn reduces your tax exposure.
Planning for your own death isn’t a pleasant exercise, but it’s too important to ignore. That’s especially true if you have children or other financial dependents. Estate planning is a critical component of any financial plan because it helps you protect those you love after you pass away.
An estate plan provides formal, written instructions to your loved ones on how to manage your assets after your death. It may provide financial support to your beneficiaries and loved ones. It also may direct your heirs on how to split up your assets. In some cases, an estate plan helps you protect your assets should you become incapacitated because of cognitive disorders in the final years of your life.
Worried that you’re behind when it comes to planning for retirement? You have company. According to a recent Gallup study, more than 50 percent of Americans are concerned that they won’t be able to fund their retirement. In fact, retirement is America’s No. 1 financial worry.1
The good news is it’s never too late to develop a strategy and take back control of your retirement planning. Below are a few red flags that may indicate you’re not as prepared as you should be. Do any of these sound familiar? If so, now may be the time to take action. A financial professional can also help you implement a retirement strategy.
Retirement is a difficult financial challenge for most people, but it can be uniquely difficult for women. In fact, the National Institute on Retirement Security recently found that women age 65 or older are 80 percent more likely to live in poverty than men. Women age 75 to 79 are three times more likely.1
Why is retirement more difficult for women? There are a number of reasons, and many may vary based on each person’s unique situation. If you’re approaching retirement, now may be the time to identify the risks you could face. By planning ahead, you can implement a risk management strategy.
Below are three challenges that many women face in retirement, along with possible strategies to minimize risk. A financial professional can help you further develop your plan so you can enjoy a long and financially stable retirement.
Are you a business owner without a succession plan? If so, you have company. A recent study from Nationwide found that 60 percent of small-business owners don’t have a succession plan. Among those without one, nearly half said they don’t have a plan because they believe such a plan isn’t necessary.1
A business succession plan is a document that outlines your strategy for transitioning your company to the next owner. You may feel that such a plan isn’t necessary right now. However, the truth is that if you don’t have a plan, you could be exposing your business, employees and family to significant risk.
A business succession plan also helps you realize maximum value for your business and even retain some form of control or financial involvement. You can use the plan to find the right successor and transition the business without disrupting operations or cash flow.
Is your strategy for retirement simply to save as much money as possible? That’s not a bad idea. Perhaps you put money away in a 401(k), an IRA or even a health savings account. Asset accumulation is an important part of retirement planning, especially in the early years of your career.
As you near retirement, however, you may want to consider issues beyond dollars and cents. It’s important to think about not just accumulating assets, but also how you will use those assets in retirement. That means asking yourself questions about your desired lifestyle in retirement.
Below are a few questions you may want to ask yourself as you approach retirement. These questions can help you think beyond the financial aspects of retirement planning. They can also inform your spending decisions in retirement so you can protect your assets and your financial stability.