The cold hard fact of the matter is that retirement is not something that everyone is entitled to by virtue of contributing into the Social Security program.
It is simply a matter of math. You can retire when and if you have the financial resources to do so, and it has nothing to do with celebrating a particular birthday.
If you register on the Social Security Administration website you can access your personal statement at any time. This will tell you what you can expect to receive from Social Security when you do in fact apply for the program.
When you see this figure you will inevitably come to the immediate realization that you are going to have to supplement your Social Security income.
You should have a significant amount of personal savings entering retirement. One way to accumulate a financial underpinning would be to contribute into a traditional individual retirement account over a number of decades.
This can also be part of your estate plan, because if you make wise financial moves you may actually find that you do not need to spend the money in the account after you retire.
When you open the account you name a beneficiary or beneficiaries who would assume ownership of the resources at the time of your passing.
Many people will endeavor to “stretch” the IRA. The beneficiary must take a required minimum distribution out of the account annually. Taxes must be paid on the distributions so the lower they are the better on that level.
The older the beneficiary is the higher the required minimum distribution will be, so if your spouse and children do not need the resources you may want to consider making your grandchildren the beneficiaries.
To learn more about weaving individual retirement accounts into a comprehensive plan for the future take a moment to set up a consultation with a licensed and experienced Indianapolis retirement planning lawyer.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.