What does retirement mean to you? Can you picture what you want to do and how you’re going to do it? In today’s world, retirement looks very different to each person or family. It’s certainly not a one-size-fits-all approach. Our financial advisors can provide you with options and plans that can be customized to fit your specific needs.
We’re ready to help you protect and plan for your future with the following retirement funding solutions.
Individual Retirement Account (IRA)
Individual Retirement Accounts (IRAs) can be a good option for individuals who do not have access to an employer-sponsored retirement plan or who want to an option in addition an employer-sponsored plan. An IRA can be a particularly attractive option for those who are self-employed, individual contractors, small business owners or freelancers. There are typically four types of IRA:
Traditional IRA — A portion of your pre-tax income can be directed to this tax-deferred account and may be tax-deductible. The amount will be taxed upon withdrawal. There are contribution limits, depending on the contributor’s age, increasing as you get older.
Roth IRA — Invested income is an after-tax deduction, however, it is tax-deferred and will not be taxed upon withdrawal or distribution, pending all contribution and time requirements have been met.
SIMPLE IRA — A Savings Incentive Match Plans for Employees (SIMPLE) IRA is designed for small business owners and self-employed individuals to make and/or match contributions toward employees’ and their own retirement. Employees are able to contribute to their own account using pre-tax income, which is tax-deductible. Taxes remain deferred until the money is distributed.
SEP IRA — A Simplified Employee Pension (SEP) IRA provides small business owners and self-employed individuals a simple way to contribute to employees’ and their own retirement. With an SEP IRA, only employers can contribute to employees’ retirement accounts. Employees are not able to contribute to their own accounts. It is pre-tax income, which is tax-deductible and deferred until it is distributed.
Employer-Sponsored Retirement Funds
Many companies offer retirement plans for employees, usually with a matching percentage contribution benefit. One example of this kind of plan is the 401(k)
401(k) — This option is named after it's IRS tax code section, 401(k). 401(k) retirement funds are provided by employers for employee payroll-deducted contributions. These deduction can be made on either a pre- or post-tax basis. Employers may make matching or non-elective contributions to the plan on behalf of eligible employees. 401(k) plan earnings are tax-deferred, but will be taxed upon withdrawal. Early withdrawal from a 401(k) plan may incur heavy fees.
There are many options for your retirement plans. Contact a Farm Bureau Advisor today to discuss options for your retirement.
2/12/2020 6:00:00 AMIn December of 2019 the SECURE Act was enacted, altering some of the restrictions and opportunities surrounding the way people save for retirement. Here are some of the ways The SECURE Act may impact your retirement, tax, and estate planning strategies. Read Article: The SECURE Act and Your Retirement Savings »