What Your Family Should Know About Saving for Retirement
Saturday, November 26, 2016, 6:00 AM | Leave Comment
We all know we should be saving for retirement and working on a financial portfolio early on.
Your family needs to realize how important this is as well, because it does not matter who is elected or what they promise, social security is not going to be there, and it will hardly be enough to provide a comfortable living for the people you love, if it is.
Your family needs to know there are creative ways to grow a sizable nest egg besides just having a portion of every check put into an IRA or savings.
The following three strategies are some your family should follow to get better savings for retirement now.
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It Is Possible to Set up a Tax-Free Retirement Income
If you have a Roth IRA and Roth 401(k) set up, then the income tax has already been paid on the money you put into it. This means the funds will increase in the account without taxes.
If you happen to take any funds after you are 59 and a half from an account five years or older, then you don’t have to pay any taxes on earnings from investments.
Basically, if you pay taxes now on money you put into a Roth, then any money you make is tax-free. This is a great way to avoid being taxed twice, especially over money you are going to need when you are no longer earning from a job.
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The Saver’s Credit
Often, when talk of IRAs, Roths, or anything related to retirement saving comes up, individuals and couples who earn a lower income are not interested, but they should be, because there are things like the saver’s credit for lower income individuals and couples.
If a single person’s adjusted gross income is $30,750 or less and a couple’s gross is $61,500 or less in 2016, then they qualify for the saver’s credit.
The tax credit can be worth as little as 10 percent and as much as 50 percent as the amount put into a Roth, IRA or a 401(k) for up to $4,000 for couples and $2,000 for people who are single.
There are also other options for getting savings and help with you don’t earn enough or are already paying for other government aides.
A Florida Disability Lawyer recommends considering disability rights after paying for long or expensive medical treatments.
There are many options you may not be aware of, but that can help mitigate costs and keep your savings intact.
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The New myRA
The myRA is something worth discussing with your family as well. It is a new kind of Roth retirement account and is something you and your family will find especially useful because the money put in to save can’t ever depreciate.
A Treasury savings bond is the only investment option for the myRA, and it pays a varying rate of interest.
Another plus for the myRA to pitch, is when it reaches $15,000 or turns 30 years old, all the savings get moved to a private Roth IRA.
Creating a tax-free retirement income account, taking advantage of the new myRA, and using the saver’s credit are three of many things to share with your family.
Saving for retirement is something to discuss with your loved ones and educate your children about. After a lifetime of hard work, we deserve a comfortable and financially stress-free retirement.
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