We all want to know that perfect 401K ratio to save for retirement. How much do we spend? How much do we save? These questions are timeless and should always garner the same response.
“Should I max out the money that I’m putting into my 401K plan?”
It really depends
Well, the answer is it depends on what’s happening in your 401K.
Generally speaking, if your employer is matching contributions to your plan, then you absolutely want to put in at least as much as being maxed.But any amount over that, there are other alternatives for retirement plans that you might want to consider.
So of course, every situation is very specific to what your numbers are. But maxing out your 401K is not always the best advice that you want to consider with that question.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
When it comes to retirement, taxes can have a major impact when you begin using your retirement savings. It goes without saying that taxes will be with us till death do us part. Having the knowledge and diligence to explore all of your options when saving for retirement can make a significant impact on your life.
“What will taxes look like in retirement”?
Exposing Tax Bracket Truths
You know we have heard so many times from so many places that when you retire you will automatically be in a lower tax bracket. Well for 37 years at Barber and Associates, I have been helping people prepare for retirement.
And those who are successful, who really were diligent and saving their money to the point that having enough money is not really a concern, What they have realized when they got to retirement is, many times taxes were higher than they anticipated. Many times they weren’t in a lower tax bracket as they expected and so the taxes on the money become a real issue.
Look at the Options
If those people could do it all over again, I think they would take a look at the options that are available that you can invest your money in retirement plans that have no taxes when you retire. Many people don’t even know there is such a thing.
But, you do have a choice. You don’t have to put all of your money for retirement in IRA’s or 401K’s. You can put it in other places that give you some reduction in the tax liability you are going to have.
So if you are looking at what taxes are going to be, probably going to be surprised there not going to be as low as you would like them to be in retirement. But take a look at some of the options to make a difference in your situation.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
For years, plenty of folks have contributed to their IRAs and 401Ks without giving notice to the thought that the headlining question predisposes. They don’t stop to think that accessing the funds in their retirement plan, before the imminent time has arrived, may be the least attainable during the roughest of times.
In particular, this dilemma has ensued due to the policy that most traditional retirement plans enforce: requiring a qualifying age limit to allow you to have access to your own funds. In other words, you are not allowed to spend the monetary assets put towards your retirement before you have reached the age of fifty nine and a half. So what happens when you need to send the kids to college… or when an emergency occurs and you need money to make it out?
Things don’t always go as planned during this capricious game we call life. Your ship may begin with smooth sailing then hit rough currents and be the first to sink. We rely on the ship’s crew, or in this case, our banks to pull us out of the water in threatening situations.
Just how you rely on your crew, we want you to know that you can confide in Barber & Associates Financial Group if ever you need to obtain a plan that allows you to use your retirement money as you need to. What differentiates us here at Barber & Associates from traditional financial groups is that you have OPTIONS. You have the option for a plan that allows you to use your retirement money as you please. Once you have used it, you can simply put it back into your plan if you choose to at a later point in time.
The most important point to take away from this is that you are not being restricted by the rules that so many of these traditional tax deferred plans hold you accountable to; unable to access your retirement funds. When thinking about the right savings plan for your money, your finances and your retirement, think about options and remember that less is not more!
There are plenty of options when it comes to retirement plans with some being more popular than others. But what is popular may not always be right, and the money you save, may not be as much as you think.
“How do you know what the best retirement plan is for you?”
What are the options?
If you work for a company, they may have a 401K, if you’re a schoolteacher, you probably have a 403B, if you’re an attorney or a doctor, there are so many different kinds of retirement plans that are allowed.
And many people buy into those, not understanding what the long term impact of deferring taxes on too much of their money. Because we’ve been told over and over again by the government and by many financial institutions that you should just tax defer as much as you can to the future.
But in my thirty eight year experience of working with people and helping them prepare for retirement, what many people come to a reality once they retire is, is they may have put money for decades into their retirement plan and never paid taxes on any of that money.
Taxes after retirement
But Uncle Sam controls the formulas and the tax calculation when you take that money back. And what many people discover is that they may pay Uncle Sam back and as soon as three to five years, all of the taxes they saved over decades of their life — and I wish that at that point, Uncle Sam would say, “Enough is enough. I got my money back.”
But that’s simply not the case because you continue to be taxed year after year after year and many times, can end up paying back five to ten times the tax that you pay on your retirement dollars compared to what you saved to actually put those dollars in.
So I would submit to you, when you’re thinking about your retirement plan and what is the best plan, consider the tax consequences that nobody really wants to talk about. Because a tax efficient retirement plan may turn out to be the best plan that you could consider for your future.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
A disability can often alter the amount of money you are able to save for the rest of your life. But, a disability does not have to hurt your retirement. Luckily there are alternatives you can put in place to insure your future.
“What happens to your retirement plan if you become unable and can not save those dollars over the time that you had planned?”
The “what is?” scenario
Many people never thought about that question. What if we got sick? What if you had an accident and your 401K or your IRA or your 403B, the plan that you had intended to save all of your retirement dollars, you weren’t there to work and to save and to contribute those dollars.
I think if you called and asked about your plan, you would find out that there’s no provision to continue those contributions.
Alternatives
Well, good news. You can opt for an alternative.
At Barber & Associates Financial Group, we’ve helped many people establish retirement plans that have disability features attached to them that guarantee if you have an accident or an illness, those contributions that you’re not able to make will be made on your behalf so that your retirement dollars will be there, even if you’re not able to work and to save your money on your own.
So I would encourage you: find out more about this important issue of what happens if you become disabled before retirement.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
If you love to save and you’re planning a good retirement, have you looked at what the impact of Social Security is?
“How does Social Security get impacted by my retirement plan?”
Understanding the Impact of Social Security
If you’re like most people, you’re saving money in a 401K or an IRA, anticipating that time in retirement that you’ll have an income that will give you a wonderful retirement life and you’re looking forward to your Social Security. Many people don’t realize how Social Security gets impacted by retirement.
Social Security has a level that you can receive of income and if you exceed that — and exceeding that happens any time that you take retirement monies out — then they actually begin to tax your Social Security because of any other income that you have. And not knowing that, many people put far too much money into their 401Ks or their IRAs.
Higher Tax Brackets
They find out after age seventy these required minimum distributions force them to take that money, even though, in many cases, they don’t need it. It just pushes them into higher and higher tax brackets and causes your Social Security to be taxed again and again and again.
If you love to save and plan for a great retirement, social security can impact your retirement plan in more ways than one and throw a wrinkle into anyone’s master plan. But there is good news, you can opt for alternative retirement plans that have no impact on what your Social Security is.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
A plan is setup to reach a goal, in this case retirement. Sometimes obstacles such as work or life get in the way and how we once saved is no longer possible and we cannot complete what we started. There are solutions to solving this problem that allow individuals the rights to certain parts of their saved monies.
And we want to address the question today,
“What happens to your retirement plan if you don’t complete it? If you stop working, if you don’t put money in anymore?”
Can you access the money?
This is a very important question that many people have never considered. You know, it depends on the type of plan you have. Obviously, if you have a 401K or an IRA that’s dependent on your contributions, if you stop putting money in, then that plan is going to have whatever balance it is plus the future growth.
What most people don’t realize is because that is a qualified retirement plan, even though you quit working and you’re not adding to the plan, you still do not have access to that money all the way until you reach qualifying retirement age, which is fifty nine and a half.
Many folks don’t realize that until it’s too late that all that money they saved is simply not available to them.
Other options
Well, the good news is there are alternatives.
And I would like to explain to you that you can opt for a plan, such as ones we help people with at Barber & Associates, that when you stop working and you don’t need to contribute anymore that those monies are immediately available to you so that you can use them for whatever purposes.
If you still want to let them grow to provide a retirement income in the future, that certainly is an option. But you’re not restricted as you are under many retirement plans that those monies are not available to you.
So this is a very important issue when you’re looking at your retirement plan. What happens to that money if you leave that employer and you don’t need to add to it anymore?
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
These are available to you free as our gift here on our website, BarberAssociatesFinancial.com.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
The 401K. The grand daddy of all retirement plans. Or is it? Sometimes exploring alternatives can exceed the benefits of going with a traditional retirement plan.
“Is there a better retirement plan than your 401K?”
Think Long Term
You know, many people, when they go to work and their company has a 401K, they automatically sign up and never think about the long term consequences of tax deferring so much of their money.
Well, at Barber & Associates, we’ve helped people for thirty eight years design tax efficient retirement plans using an investment that you probably would never understand would be so helpful in retirement, and that is life insurance.
Life Insurance can exceed your 401K return
You know, life insurance, typically, you think of as a type of investment that’s going to cover you. What happens if you die? But if used properly, the inside growth of a life insurance policy can be returned to you on a tax free basis at retirement; many times, exceeding what you would actually receive after tax from your 401K plan.
Now, I recognize this is probably starting information to some of you, but a wonderful idea for you to check into because there are alternatives to your 401K or your IRA plan that over time, may be far more efficient for you to consider.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
If you are a successful person within your career, you are going to expect the amount of your success to be reflective in what you’ve earned. When you retire, you’d like a retirement income that’s going to display the years of saving and sacrifice you’ve exhibited.
“What do people who earn a lot of money do differently about their retirement planning?”
Options for High Income Earners
You know, frequently, folks find out that they are very limited in what they can put aside into their 401Ks and their IRAs because they earn a lot of money. And so they seek out what are other options where they can invest their money?
If you’re very successful in your career and the job that you have and that’s reflected in what you earn, then you’re also going to be very successful in the amount of money that you have available to invest for your retirement. And that means when you retire, you’d like a retirement income that’s going to reflect all of the years of saving that you had and all the years of sacrifice.
Tax Free Options
For that reason, many people, when they look at what other options are available, find out there are plans available that you can deposit your money for retirement.
You can guarantee that you will never lose any money and the best yet — when you take that money back at retirement, it can be tax free to you if you do it properly.
So many people who are very affluent in their careers and what they earn have found very attractive retirement plans available to them outside of what they can do in a traditional 401K and an IRA.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
When the most unfortunate of times are upon us, our pre planned choices are extremely important when striving to take care of the ones we love. This often avoided subject can also be one of the most important you will ever make.
“What happens to your retirement funds if you die before retirement?”
The Importance of a Beneficiary
Well, the first thing that every person who has a retirement plan should understand is all retirement plans go to a named beneficiary, whoever you put on that document when you first set that plan up.
So if you have a 401K, you should go to your HR department and make sure that your beneficiary is current. If your IRA is held at a brokerage company, you’d want to call them and make sure that that beneficiary form is suitable to you.
Restrictions on your Retirement Funds
But more importantly in a bigger picture question, and that is if you die before retirement, what happens to the person as they receive that money?
And let’s use an example; your retirement funds go to your wife. Well, your wife would find that she has the same restrictions on that retirement money as you do, meaning those funds are not available to her until she reaches a qualifying age, generally, of fifty nine and a half.
And so if you die too early, counting on those retirement funds to provide an income for your spouse before retirement, that would be quite a disappointment for her.
Look at the Bright Side
The good news is I help people with a variety of different retirement plans, many of which transfer all of your retirement money absolutely tax free using death benefits that are unrestricted, so that your beneficiaries have immediate use and control of that money. They are not burned with the tax rules that other types of qualified plans impose upon them. So I would encourage you, take a look at all of the alternatives.
Finding the answers
I created twenty videos responding to the most important questions that people ask me about their money, their financing, their investment, and their retirement plans.
If you’d like to know the answer to these questions, sign up and we will send you, as a free gift, these twenty videos responding to these most important questions.
