Planning for your retirement is vitally important so you don’t end up without the income that you need to live on as a senior– and that means you need to understand your retirement account options. A retirement planning lawyer at Frank & Kraft can assist you with evaluating different kinds of retirement accounts that can provide you with generous tax breaks. Our legal team can also work with you to understand income limits, contribution limits, and pros and cons of each different kind of tax-advantaged retirement account.
Frank & Kraft has helped many people to make comprehensive plans for their retirement, to find ways to effectively carry out those plans, and to protect their growing nest egg. If you are ready to start saving for your future or if you want advice on whether your current retirement savings strategies are serving you well, you should give us a call today to talk about your retirement account options. You can also read on to find out about some of the most popular retirement account options that you should be considering.
A 401(k) may be available through your employer. You’ll be allowed to contribute a maximum of $18,500 into a 401(k) with pre-tax funds in 2018, according to the IRS (this is up from $18,000 in 2017). Older employees can make catch up contributions and contribute an additional $6,000, for a maximum contribution of $24,500. Your employer may also match a percentage of your 401(k) contributions. Any money that your employer contributes to your 401(k) through an employer match is not counted towards your contribution limits. Because you invest in a 401(k) with pre-tax money, you will pay taxes on the money that you withdraw from this account when you are a senior. Early withdrawals can also be taxed and hit with penalties. A 401(k) is a very popular option for retirement savings, and many workers are auto-enrolled in these accounts at their jobs.
A Traditional IRA
A traditional IRA allows you to contribute up to $5,500 in pre-tax funds and individuals 50 and over can make an additional $1,000 catch up contribution. You can contribute to an IRA even if you have a 401(k). However, if either you or your spouse is eligible for a retirement account at work, you are not allowed to make tax-deductible contributions to an IRA once your income is too high. You should talk with an experienced attorney about the income limits for traditional IRA contributions and whether these limits apply to you. You will be charged on the money in your traditional IRA when you take it out, just like with a 401(k), and you also cannot take out money early except in limited circumstances or you could face taxes and penalties.
A Roth IRA
A Roth IRA works differently than a traditional IRA because you contribute to this account with after-tax dollars. Instead of getting an upfront tax break, you pay in with post-tax funds so it costs you more to invest as you put money in. However, the money that you contribute to a Roth IRA can grow tax free and, as long as you follow the rules by keeping the money in the account for at least five years and by not withdrawing the money before your retirement age, you can withdraw the money tax free. Having tax free income during retirement is a big benefit. However, there are also contribution limits and income limits for Roth IRA contributions — and you have a combined limit of $5,500 for both a Roth and a traditional IRA.
Getting Help from a Retirement Planning Lawyer with Your Retirement Account Options
A retirement planning lawyer at Frank & Kraft will go over your retirement account options with you, will help you to understand what accounts you can contribute to, and will assist you with making the type of comprehensive plan that will put you on the path towards a secure retirement. It is much easier to make your retirement plans and to carry them out if you begin investing early, as you can take advantage of compound interest so you don’t have to invest as much to grow a big nest egg.
You shouldn’t wait to find out about retirement options available to you and you shouldn’t wait to get your plans in place. Give us a call at 317-684-1100 or contact us online today. You can also join us for a free seminar to find out more about the retirement planning process that our legal team can guide you through. Call today, as your future financial security could depend upon the retirement savings moves you are making today.
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.
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