You probably have a retirement dream. After you have put your working years behind you, there is a lot of living left to do.
Are you on track to live the retirement dream? Have you given retirement planning any thought?
If you are not working within a cogent plan that leads to a comfortable future, action is required. Our firm can help you put a solid plan in place that culminates in the fruition of your long-term financial goals.
Retirement planning is a very important piece of the puzzle when you are putting a long-term financial plan together. You want to make sure that you can enjoy your golden years to the fullest, and this takes careful preparation over an extended period of time. Social Security will be part of the equation for most people, so we should provide some information about this program.
Qualifying for Social Security
Everyone does not automatically qualify for Social Security at a particular age. To qualify for Social Security, you must earn sufficient retirement credits.
You get retirement credits while you are working and paying taxes. This post is being written in 2016. In 2016, you earn one retirement credit for every $1,260 that you earn. It is possible to earn a maximum of four retirement credits in a year.
The word “maximum” is operative. Even if you earn a million dollars in a year, you would accrue the same four retirement credits that would be accumulated by someone who earned $5,040 during the year.
Once you have at least 40 retirement credits under your belt, you will qualify for Social Security when you reach the age of eligibility.
Reduced Benefit
Under currently existing laws, you can choose to accept a reduced benefit. When you are 62 years of age, you can begin to draw your Social Security payout, but it will be less than your full retirement benefit.
Plus, you will lose some of your benefit if your earnings exceed a certain threshold.
Full Social Security Benefit
The age of eligibility for your full Social Security benefit will depend upon your year of birth. For people born before 1954 who are not yet eligible for full benefits, the age of eligibility is 66. The eligibility age then goes up by two months per year.
In other words, if you were born in 1955, your eligibility age is 66 years and two months. If you were born in 1956, your age of full eligibility is 66 years and four months.
The age of eligibility goes up in this fashion until the year 1960. People who were born in 1960 and after become eligible for their full Social Security benefit when they reach the age of 67.
It is also possible to delay the submission of your application for eligibility until you are as old as 70 years of age. If you do this, you will receive an increased benefit.
Individual Retirement Accounts
When you are planning for retirement, you should make sure that your individual retirement accounts are optimally utilized. Many employers will match your contributions up to a certain point, and this is something that you should certainly take advantage of if it is available to you.
You should also have a full understanding of the tax laws that govern these accounts. With a traditional individual retirement account, you make contributions before you pay taxes, so the distributions are taxed. Things work in the opposite manner with a Roth IRA. You make after-tax contributions into a Roth individual retirement account. As a result, any distributions that you take from this type of account would not be subject to regular income taxes.
Your retirement planning attorney can explain the differences between Roth and traditional IRAs and make recommendations based on your unique personal circumstances.
Special Report on Individual Retirement Accounts
You should educate yourself when you are looking ahead toward your retirement years. We have assembled an electronic research library that contains special reports on a number of different relevant topics. One of the reports covers individual retirement accounts. In addition to the obvious retirement benefits, when certain circumstances exist, an IRA can be used as an estate planning tool as well.
If you would like to gain access to this valuable free report, click this link and follow the simple instructions: Free IRA Report.
Schedule a Retirement Planning Consultation
Retirement can be one of the most rewarding periods of your life if you plan ahead effectively. We would be glad to discuss your retirement goals with you one-on-one.
To request a consultation, call us at (317) 684-1100 or send us a message through this page: Indianapolis Retirement Planning Attorneys.
Paul A. Kraft, Estate Planning Attorney
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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