Simple Retirement Plan

Personal Retirement Advice

When it comes to retirement, it is difficult to predict what will happen. The economy is always changing, which means it is hard to know how much money is enough and how you should prepare. Here are a few ideas to get your feet planted…

If your employer is offering a retirement plan, it is almost always a good idea to participate in this. Many plans allow employees to contribute pre-tax dollars and some employers even match contributions up to a certain percentage.

As you choose an investment mix for your retirement plan, consider your tolerance for risk and the length of time you have until retirement. If you do not have a lot of time until retirement, you may want to steer clear of more aggressive investments, which tend to be more volatile.

Remember that traditional IRA contributions may be tax-deductible. For the 2001 tax year, the modified adjusted gross income deductibility threshold for active participants in an employer-sponsored retirement plan ranges from $33,000 - $43,000 for single filers and $53,000-$63,000 for a married couple filing jointly. If you are not participating in an employer-sponsored retirement plan, 100% of contributions are deductible. If you are not able to deduct a Traditional IRA contribution, consider a Roth IRA. With the Roth, income grows tax-free.

If at all possible, try to avoid withdrawals from your retirement account. For example, if you are changing jobs, roll your 401k (or other pension plan) directly into a Conduit IRA. This type of IRA will maintain your plan's tax-deferred status and allow it to be rolled over to a future employer's plan.

IRA contributions for a tax year that are made any time before April 15 of the following year may still be deductible on the previous year's return. Talk to a tax advisor for more information.

There are plenty of things to think over when it comes to retirement, but make sure to keep these ideas fresh in your head. Retirement will creep up on you faster than you think, so it’s best to be ready for whatever it may throw at you.