A Quick Guide to Retirement Planning

a quick guide to retirement planning

With all the things that are happening in your life, sometimes retirement planning gets put on the back burner.

It seems such a daunting task to consider planning for a future when getting through the week can be a challenge.

But the first step in developing a retirement plan is to figure out the tools you have available to build that nest egg.

We’re Here To Help

Below are some of the best tools you have for building up to those golden years. And if you’re interested in talking to someone who can help work out at a strategy, we have a great team of investment advisors to help. Stop by, email, or give them a call today.

These are no-cost, no-obligation consultations for all of our current and prospective members in a zero-pressure environment, because your best interests are our best interests.

And remember, the best retirement plan is the one that fits your ability to stick with it. Don’t get fancy. Another good place to start your journey is checking out our retirement calculator. It can give you an idea of what you will need to enjoy your years after your 9-5 days are over.

Tools for Building Your Nest Egg

Here are the most popular (and easiest) ways to build your retirement savings. These are the Big 3 – 401(k)s, IRAs and Roth IRAs - and each is tax deferred, meaning you don’t pay taxes on the money put in or the capital gains (profits) in these accounts until you’re at least 70.5 years old:

401(k): This tax-deferred employer-sponsored plan started in 1978 and refers to the IRS section of the tax code that established it. Generally, these plans are employee funded but employers will ‘match’ a percentage of your contribution. By law, you are only allowed to invest a certain percentage of your salary into the plan, so if you don’t start early, you will likely need to consider another retirement plan as well. Whatever you put in is state and federal tax deductible in the year of the contribution. But you have to withdraw funds starting at age 70.5 and that money is then taxable.

Traditional IRA (individual retirement account): Contributions to Traditional IRAs lower your taxable income in the year you contribute. That lowers your adjusted gross income, helping you qualify for other tax incentives you wouldn’t otherwise get, such as the child tax credit or the student loan interest deduction.

If you’re under 59.5, you can withdraw up to $10,000 from your account without a 10% early-withdrawal penalty to pay for qualified first-time home buying expenses and for qualified higher education expenses. Hardships such as disability and certain levels of unreimbursed medical expenses may also be exempt from the penalty, However, you’ll still pay taxes on the distribution.

Roth IRA: The big differences between this IRA and the traditional IRA are traditional IRAs are tax advantaged when you put your money in and Roth IRAs are tax advantaged when you take your money out. With the Roth, contributions (but not earnings) can be withdrawn penalty- and tax-free at any time, even before age 59½. Earnings are profits from your contributions, so if you put in $5000 and made $300, you could withdraw the $5000 penalty- and tax-free.

Also, if you’re under 59.5, you can withdraw up to $10,000 of Roth earnings penalty-free to pay for qualified first-time home-buyer expenses, provided at least 5 tax years have passed since your initial contribution.

However, your contributions to a Roth aren’t tax deductible.

Getting Some Good Advice

Our hand-picked investment advisors are more than happy to talk to you about the best strategy for building to your future – for free! And through our partnership with CUNA Brokerage Services, Inc., you can manage all your investments, as well as access your account anywhere, anytime and partner with an advisor to help understand your unique financial situation.

Our success is built on your success.

If you like this article and want to read more about planning for retirement, check these out:

And always remember, we are here to serve you. Whether it’s with our retirement calculator or by getting you in touch with one of our hand-picked investment advisors.