Retirement Planning

7 Signs You Should Talk to a CERTIFIED FINANCIAL PLANNER™

Learn the signs that it’s time to talk to a CERTIFIED FINANCIAL PLANNER™ . Get valuable advice on how to manage your finances and achieve your goals!

Retirement Planning, Wealth Management

Is It Time to Rebalance Your Portfolio?

Retirement Planning, Wealth Management / ChatMarketing

If your asset allocation has shifted over time, you may need to rebalance your portfolio.

Generational Planning, Retirement Planning, Tax Planning

Saving for Education: 529 Plans in California

Generational Planning, Retirement Planning, Tax Planning / ChatMarketing

Looking to fund your child or grandchild’s education? 529 plans may provide the answer.

Retirement Planning, Wealth Management

Sequence-of-Returns Risk in Retirement

Retirement Planning, Wealth Management / ChatMarketing

Sequence risk can affect the newly retired. Learn how to protect against it.

No matter where you are on your retirement journey, contributing to an Individual Retirement Account (IRA) is a significant milestone in creating your ideal retirement lifestyle. Though there are different types of IRAs, all of these tax-advantaged savings accounts can help you save and invest to fulfill your long-term financial goals. Take a look at this IRA guide to see which one might benefit you the most. Types of IRAs While the Traditional IRA and the Roth IRA are the most commonly known, here is a brief overview of some of the types of IRAs you may come across. ● Traditional: Contributions made to a traditional IRA are tax-deductible and are tax-free until retirement. Upon retirement, withdrawals are taxed at the ordinary income rate. At age 72, you must begin taking Required Minimum Distributions. ● Roth: Contributions to a Roth IRA are not tax-deductible, but upon retirement, withdrawals can be made tax-free. Unlike a traditional IRA, there are no RMDs. ● Simplified Employee Pension (SEP): This is a traditional IRA which is set up by an employer for employees, and the employer gets a tax benefit. Like a traditional IRA, contributions are tax-free and taxed upon withdrawal in retirement. ● Savings Incentive Match Plan for Employees (SIMPLE): Employees can contribute to this type of IRA through their employer via salary deferral. What’s the difference between a 401(k) and an IRA? 401(k) plans are only offered through employers and there are rules in place concerning employees’ eligibility to participate in those retirement plans. Conversely, IRAs can be set up individually and are a good option when or if you do not have access to an employer-sponsored retirement plan. You can have both a 401(k), if available to you through your employer, and an IRA. Note: If neither you nor your spouse has an employer-sponsored retirement plan, traditional IRA contributions are fully deductible. If there is such a plan in place, the deductions are gradually phased out depending on your modified adjusted gross income. Contribution Limits to IRAs and Penalties As of 2022, the yearly contribution to a traditional or Roth IRA is $6,000. People aged 50 or over are allowed a catch-up contribution of an additional $1,000. If you need to withdraw your savings from a traditional IRA before age 59 ½, you will incur a 10% penalty fee plus get taxed on the withdrawal at your ordinary income rate. There is no penalty for withdrawing your contributions from a Roth IRA, though there are income limits for contributing to one. If you happen to exceed the income limits of a Roth IRA and still contribute, you may face a 6% tax penalty. Which IRA choice is right for you? When considering contributing to a traditional IRA versus a Roth IRA, there are a few factors to think about. As mentioned, each IRA gives you a tax break - but the timing on that tax break differs. Would you rather defer tax with a traditional IRA and get taxed later, or get taxed now and enjoy the tax-free growth of a Roth? You might also consider whether you think you will be in a higher tax bracket in retirement than you are currently. If you’re in a higher tax bracket once you’re ready to retire, then a Roth IRA might be more appropriate. Otherwise, a traditional IRA might be better suited for your needs. Discuss your IRA options with Chatterton and Associates If you want to open or start contributing to an IRA, it’s best to consider your options with your financial and tax professionals. Doing so can help you weigh the benefits and risks before you make a decision that could potentially have unintended tax implications. Contact us today to discuss your IRA options and figure out which one is right for your financial situation.

Retirement Planning, Wealth Management

IRA Guide: Which One Is Right for You?

Retirement Planning, Wealth Management / ChatMarketing

Ready to start contributing to an IRA? This IRA Guide will help.

Retirement Planning

Planning for Three Common Risks in Retirement

Retirement Planning / ChatMarketing

Retirement risks are more common than you think. If you’re affected by something unexpected, here’s how to navigate.

Retirement Planning, Wealth Management

Why Investors Should be Buying I Bonds

Retirement Planning, Wealth Management / ChatMarketing

What is an I bond and how can it help you when inflation is on the rise?

Retirement Planning, Tax Planning

How You Can Save by Considering Charitable Giving

Retirement Planning, Tax Planning / ChatMarketing

If you’ve never considered charitable giving, now might be the time.

Retirement Planning, Wealth Management

Strategic Options for Market Volatility: Roth IRA Conversion

Retirement Planning, Wealth Management / ChatMarketing

Stock market volatility is a part of investing, but a Roth IRA conversion might be a crucial strategy to help investors.

Retirement Planning, Wealth Management

What is Social Security & When Can I Receive Benefits?

Retirement Planning, Wealth Management / ChatMarketing

Discover everything you need to know about social security, when the best time to apply is, what documents are required, and what benefits are included.