Saving For Retirement
When it comes to saving for the future, there are a lot of options, including employee benefit plans, IRAs and more. The trick is to know what is right for you.
Start With Your Employer Plan
If your employer has a 401(k) plan or other retirement option, be sure to maximize it to your benefit. Some employers even have matching programs designed to help your funds grow quickly. Ask your benefits department about your employee retirement savings plan then come in and talk with us about how you can get the maximum benefit from that plan.
For example, if you're a Kaiser Permanente employee, we can show you how to maximize your defined benefit plan, which pays a defined pension based on your years of employment, final average pay and a multiplier around 1.5%. And while you're here, we'll help you set up additional retirement options that fit your needs, especially if your family fits within the 15-25% tax bracket.
Traditional & Roth IRAs
Even if you are participating in your employer's plan, an IRA is a great way to save for the future. Whether you pick a Roth or Traditional IRA, each allows you to invest up to $5,000 in 2010. For anyone over the age of 50, that number goes as high as $6,000 with catch up provisions. And while that number is for 2008 only, over the past ten years, contribution limits have continually gone up as the government has encouraged Americans to save more toward retirement.
Traditional IRAs Offer Pre-Tax Savings
If you want contributions to be pre-tax, the Traditional IRA is the option for you. Having contributions pre-tax will lower your taxable income (check with your CPA) and earning grow tax-deferred until withdrawn.
Roth IRAs Offer Post-Tax Savings
If you want to pay your taxes now and enjoy the fruits of compounding interest later, the Roth IRA is a great option. Especially since you can never be sure if you'll be in a higher or lower tax bracket at retirement. Simply paying the taxes now takes the bite out of it later.
Social Security Is Still Valid
Social Security benefits might not be outstanding, but they are nice to have. After all, it is money you've saved over your working life. Knowing how much you'll receive per month is a great way to plan ahead. Call Social Security at 800-772-1213 for more information.
Need Some Advice?
Call us at 503-813-3242 (toll free 866-813-3242) to open your NCUA insured, Passbook savings and/or Certificate of Deposit IRA today. We can even help you look at your current mix of savings options to find the right account for you.