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The latest news and financial insights from your friends at 1st Nor Cal Credit Union.
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Win $50!
There are two member numbers spelled out within the text of this eNewsletter. Find your number and give us a call at
(888) 387-8632 to claim $50!
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Retirement Planning Ideas Based on Age
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by Jason Vitucci, CFP®
Our financial planning practice focuses on helping our clients plan for their retirement and helping them reach for their retirement goals. Here are some ideas for retirement planning based on age.
Most people would argue that your 40s are one of the best times in your life. You’ve hit your stride - from your personal life to your career - and have learned how to juggle boardroom meetings and soccer practice. From a financial perspective, this is really where the rubber meets the road.
Check out this list to see if you’re on track in your 40s: - Invest outside of your retirement workplace account. If you’re taking advantage of your 401(k) and maxing out your contribution, it’s time to start investing outside of your workplace plan. Contribute to a Roth IRA until you no longer qualify. Start thinking about diversifying your investment account types - most people have the bulk of their investments in tax-deferred retirement accounts. Planning to invest in taxable accounts will give you the freedom to access your investments should you need it for a large purchase.
- Establish college savings plans. If you have children, college will be here before you know it. 529 plans are a great way to start saving.
- Cut your debt. It’s time to get serious about reducing your debt load. If you have credit cards, student loans, or medical bills, create a plan to get out of debt. If your interest rates are high, consider using a home equity loan to pay off your high interest debt. This must be paired with a plan to get out of debt, otherwise you’ll end up where you started. Your 40s are the time to plan to pay off your mortgage by retirement.
Turning 50 is a milestone for many reasons. You’re likely in your peak earning years and no longer have kids at home. You’re paying down debt, and your wealth is higher than it was a decade earlier.
Changing circumstances means changing strategies. Here are some financial goals to consider in your 50s: - Run projections. If you haven’t done any type of retirement projections, start to play around with online calculators that help you figure out how much income you might have in retirement given your current portfolio. Keep in mind that most online retirement calculators don’t accurately account for taxes. This can make a big difference in the results.
- Create a retirement budget. Getting a handle on your upcoming retirement budget helps you to make smart choices about the retirement lifestyle you want. You may find there are trade-offs you’re willing to make that might enable you to retire earlier, travel more in retirement, or have more money for fun and hobbies.
- Consider long-term care insurance. The great unknown of retirement living is medical costs. If you remain healthy, no problem. But any chronic condition can turn into an ongoing expense that greatly restricts your lifestyle. Look into long-term care insurance - many plans are only available to people in their 50s because older retirees no longer qualify to buy or simply can’t afford long-term insurance.
With retirement closing in, your 60s are all about making sure you have the right plan in place.
Here are some great ideas to implement in your 60s. - Make an estate plan. If you don't already have a will, put creating one at the top of your to-do list. If you have one in place, make sure it still reflects your current wishes and that all your beneficiary information is current.
- Evaluate your insurance needs. You may no longer need a life insurance policy to protect your family, but some affluent families opt to buy one to leave money behind for their heirs. Some long-term care policies also include a death benefit.
- Be tax smart. Most people’s retirement income is drawn from a variety of sources; some of which are taxed more heavily than others. We can meet to discuss creating a tax-efficient withdrawal strategy, so you can keep more of your wealth. Similarly, if you don’t plan to spend it all before you go, an estate planner can advise you about how to minimize the tax burden for your heirs.
How can you take full advantage of your golden years? Here are some tips for being financially savvy in your 70s and beyond: - Review your estate plan. Develop or review a plan for your property and assets, including your will, trusts, liquidity of assets, and gifting.
- Re-evaluate budget and cash flow. Creating a budget is crucial to fulfilling your plans for retirement. Be sure to set aside an emergency reserve when evaluating your needs.
- Communicate. Being retired doesn’t mean that retirement planning is done. Continue to have regular meetings with a financial professional and take prudent steps with your tax-efficient investments and savings.
As a valued 1st Nor Cal member, we welcome you to contact us for a complimentary financial analysis. All meetings are currently being held by phone or screen share as our office remains closed to in-person meetings for now. We have webinars posted to our website along with other financial education information, and we welcome you to view them. For more information about our practice, please visit our website www.vitucciintegratedplanning.com.
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2890 N. Main Street, Suite 201
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Securities through First Allied Securities, a registered broker dealer, member FINRA/SIPC. Advisory services offered through First Allied Advisory Services, Inc. Registered Investment Advisor. Investments not FDIC or NCUA/NCUSIF insured, not insured by Credit Union, may lose value. Products offered are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. 1st Nor Cal CU, Bay Area Retirement Solutions and First Allied are all separate entities. Jason Vitucci CA Insurance Lic.: 0F59894, Gene A. Schnabel CA Insurance Lic.: 0663016 Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer’s official statement and should be read carefully before investing.
Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state's 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investing in any state's 529 Plan.
Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty.
A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes. Converting from a traditional IRA to a Roth IRA is a taxable event.
A diversified portfolio does not assure a profit or protect against loss in a declining market.
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BRANCH LOCATIONS
1111 Pine St, Martinez
538 Center Ave, Martinez
4261 Century Blvd, Pittsburg
8660-E Brentwood Blvd, Brentwood
560 First St, Suite B-106, Benicia
1420 Pomona St, Crockett
2500 Nevin Ave, Richmond
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HOURS OF OPERATION
Mon - Wed: 9:00am - 4:00pm
Thursday: 9:00am - 6:00pm
Friday: 9:00am - 5:00pm
Crockett Branch Hours Only
Mon - Wed: 9:00am - 4:00pm
Thursday: 7:30am - 4:00pm
Friday: 9:00am - 5:00pm
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Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administrations, a U.S. Government Agency.
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We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.
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The information contained in this email (the “Content”) is provided for informational and educational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Content is not intended to be and does not constitute financial, investment, tax or accounting advice or a solicitation to buy or sell securities. The Content is necessarily general in nature and is not specific to you or anyone else. YOU SHOULD CONSULT YOUR OWN INVESTMENT, TAX OR ACCOUNTING ADVISORS BEFORE IMPLEMENTING ANY ADVICE INCLUDED IN THE CONTENT. By viewing or utilizing the Content, you agree that you will not hold Marquis Software Solutions, Inc., 1st Nor Cal Credit Union or their affiliates or agents responsible for loss or damages resulting from the Content.
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