Three Retirement Savings Plan Tips

Retirement Plan Considerations

Throughout your career, you may face important decisions involving your retirement savings plan.

For example, if your plan provides for Roth contributions, you’ll want to review the differences between these and traditional pretax contributions to determine the best strategy for your situation. While pretax contributions offer an upfront tax benefit, you’ll have to pay taxes on distributions when you receive them. On the other hand, Roth contributions do not provide an upfront tax benefit, but qualified withdrawals will be tax free.1 Whether you choose to contribute to a pretax account, a Roth account, or both will depend on a number of factors.

At times, you might face a financial difficulty that will tempt you to take a loan or hardship withdrawal from your account, if these options are available in your plan. If you find yourself in this situation, consider a loan or hardship withdrawal as a last resort. These moves not only will slow your retirement saving progress but could have a negative impact on your income tax obligation.

Finally, as you make decisions about your plan on the road to retirement, be sure to review it alongside your other savings and investment strategies. While it’s generally not advisable to make frequent changes in your retirement plan investment mix, you will want to review your plan’s portfolio at least once each year and as major events (e.g., marriage, divorce, birth of a child, job change) occur throughout your life.

To learn more about our CFS* Wealth Management Services at Elevations Credit Union, click here.

1Qualified withdrawals from Roth accounts are those made after a five-year waiting period and you either reach age 59½, die, or become disabled.

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. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members. For specific tax advice please consult a qualified tax professional.

Author John Marx

John has been in the financial services industry since 1986 and is currently Elevations VP of Wealth Management, in addition to being a registered Financial Advisor through CUSO Financial Services, L.P. He shares helpful tips on investments, insurance and money management.

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