Whether you live in Raleigh, Durham, or Chapel Hill, we know that many of our neighbors have the goal of achieving financial freedom in retirement. We also know, this is not easy. According to the latest estimates from Fidelity, the average retiring couple (65-years old) can expect to pay $260,000 in healthcare expenses in retirement. The rising costs of life after retirement can seem overwhelming to our aging American population. This is especially daunting to those who are nearing retirement age, and may have not saved enough early on. The reality many Americans are facing is that one out of every three Americans has nothing saved for retirement and 56% have just $10,000.
When it comes to achieving financial freedom these retirement tips can help:
We know that by the time you are about to retire, it is seemingly impossible to start saving early enough. Even if you are just 10 years out from retirement, you have time to right the ship and the results can pay off. It doesn’t help to look back and think what if, you can only change behaviors moving forward.
Take Advantage of Retirement Savings Programs
Now is the time to start taking advantages of programs and tax advantages that many employers in the Triangle and government offices offer people to help them achieve financial freedom in retirement.
“Defined contribution plan — A tax-advantaged retirement plan in which workers contribute a percentage of their incomes to these accounts. The employee and/or employer can make contributions on a regular basis for as long as the plan is active. Not all companies match worker contributions, and some that do match do so with company stock rather than cash. The amount the employee ends up with in retirement depends on the contributions made and the return on those invested funds.
For the most part, workers use their own money to fund these plans and bear all investment risk.
Depending on the plan, the employee can make pre-tax or after-tax contributions. Participants in a 401(k) or SIMPLE IRA, for example, get to deduct contributions from their gross income, so they pay less to the IRS upfront. When the employee retires, the money is taxed upon withdrawal from the account. With a Roth 401(k), workers put money in after payroll taxes are withheld, meaning the account doesn’t offer an immediate tax benefit. But when the money is withdrawn, it is tax-free.” -BankRate
“Individual Retirement Account (IRA) — IRAs are retirement accounts with tax advantages. You may contribute up to the limit for each taxable year. Or, if you’re age 50 or older, you can put aside more. But your contributions can’t exceed your earned income. The investment grows tax-free until you begin making withdrawals, usually after age 59½. Take money out before then and you will usually get hit with a 10 percent penalty unless you meet certain specified requirements.” -BankRate
We know the road to achieving financial freedom can seem like a long and difficult one. That is where we come in, we want to help you reach your goals by matching you up with an advisor who understands your needs. Take the next step now and schedule a consultation to get started achieving financial freedom and the retirement life you’ve always dreamed of.
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