It’s time. You’re ready to plan how you will save for retirement, or finally do a spring cleaning of your current investments to ensure they’re actually working for you. Perfect! In addition to the program your employer offers, know that you can take control of your financial future by independently setting up accounts to better manage your wealth.
Here at Elevations Credit Union, you can work with a CFS* Wealth Management Advisor to assess your retirement needs, identify long and short-term savings goals, then set up the types of accounts that best mesh with your current income flow and financial needs during retirement. Your advisor can also review your current portfolios and refresh your investment strategy so your established accounts work harder for you.
So, let’s get to it. Use our Retirement Calculator** to see how much you may need to save for retirement in a snapshot. Then, review the top seven ways individuals are saving for retirement and taking control of their financial futures.
1. College planning
During retirement, you may consider taking a handful of college courses or enriching your education with a new degree. It’s also not uncommon for grandparents to start college savings plans to gift their loved ones when they graduate high school.
A CFS* Wealth Management Advisor can assist with education planning. Ask about Education Savings Accounts (ESAs), 529 plans, Coverdell education savings accounts and Series EE bonds, all tax-advantaged, or tax-deferred, programs focused on college planning.
2. Traditional IRA
If you’re age 70 1/2 or younger and are earning an income, you can contribute to a traditional individual retirement account (IRA). This might be via an employer-offered program or one you set up independently. With this type of savings, your money grows tax-deferred. This means you will pay taxes when you withdraw the money in your retirement years.
There are annual contributions limits with IRAs, so if you want to put aside more money than is allowed, you’ll want to diversify your retirement savings beyond just one type of saving plan.
3. Roth IRA
This type of IRA also has annual contribution limits but is invested using money that’s already been taxed. So, when you withdraw the funds in retirement, the tax burden has already been satisfied.
Roth IRAs are popular among small business owners. Lower income means lower tax responsibilities in the formative years of the small business, making it easier to put aside money into the Roth IRA.
Review this detailed information about IRA and retirement plan limits** for 2020.
This retirement plan is offered by an employer to an employee. You may have lingering 401(k) accounts from past jobs sitting unmanaged or have the opportunity to sign-up for this program when starting a new job. Employers may offer matching funds (up to a set percentage) to encourage employees to save for their futures by investing pre-tax dollars.
We can help you decide if a 401(k) is a good choice for you, roll existing 401(k) accounts into new 401(k)accounts or transfer them into an IRA of your choice.
5. Certificate accounts
This is an amplified savings account for those who can leave their money untouched for a specific amount of time. Why do this? You’ll enjoy higher interest rates than on an everyday savings account that allows for daily withdrawals. A certificate account may be a good option for you.
6. Life insurance
Yes, this is part of retirement planning, too. Planning for your final expenses by investing in life insurance helps reduce the number of tasks (and expenses) left for your loved ones after your death.
As you browse life insurance policies, consider whether you want to simply pay for your funeral and debts (such as a mortgage or credit card) or if you want additional funds to financially assist a spouse, child or family member. It’s up to you!
7. Estate planning
When you look at your entire financial picture, we consider this your total worth, or estate. As we discuss retirement investing and life insurance, conversations usually lead into making a plan for what to do with accounts, assets and investments at the time of death. Knowing where your investments will go provides peace of mind and is an essential part of retirement planning.
Estate planning can include optimizing existing investments for performance, creating new investments, writing a will, electing a power of attorney, outlining guardianship and listing beneficiaries for your investments (property and monetary).
We can also help you review and understand your Social Security benefits** and when those funds will be available to you to supplement your retirement living cash flow.
Would you like to review these options with a professional? Contact us today by phone, online chat or visit one of our branches to be connected with a CFS Wealth Management Advisor. Through Oct. 30, 2020, you’ll get a $100 Amazon or Visa® gift card if you put $25,000 in your new or current investment account with CFS Wealth Management. Learn more about this special offer!
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Elevations Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
**This link leads to a third-party website.