Shift Retirement Savings into Gear without a 401(k)
published on 03/21/2017
If you don’t have access to an employer-sponsored retirement plan, you are not alone. According the Bureau of Labor Statistics, nearly half of Americans don’t participate in any type of retirement plan at work.
No worries. There are ways to save for retirement outside the office. Consider these.
Set up direct deposit
Start now saving money automatically. Set up a direct deposit from your paycheck to a savings account, individual retirement account or other investment plan. Have money taken out each paycheck. You can also set up automatic money transfers from your checking account to a savings or other account. You’ll be surprised how fast your money will grow if you set it on cruise control.
Fund a Roth or Traditional IRA
Contributing to an individual retirement account may offer tax advantages.
With a Roth IRA, you pay taxes on your contributions now, but will not pay federal taxes on your earnings, provided certain conditions are met1.
With a Traditional IRA, some or all of your contributions may be tax-deferred now, but you will pay taxes on contributions and earnings when you withdraw the money from the account.
Deposit your tax refund into your IRA
What a great way to jump start your contributions for the next year. Presently, you can invest up to $5,5002 per tax year.
No matter how you choose to save for retirement, start now. Talk with a banker or financial planner and a tax professional to discuss options that fit your needs.
Pictured: Jeremiah Williams.
Joe Langley, CFP®, MSFS, RFC, Wealth Advisor, RCB Bank Trust
Bureau of Labor Statistics, Employee Benefits in the United States – March 2016, https://www.bls.gov/news.release/pdf/ebs2.pdf, July 22, 2016.
Investments are not insured by the FDIC. Not a deposit or other obligation of, or guaranteed by the depository institution. Subject to investment risks, including possible loss of the principal amount invested. Ask for details.
1A distribution from a Roth IRA is tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, death, disability, qualified first time home purchase.A distribution from a Roth IRA is tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59 1/2, death, disability, qualified first home purchase.
2 2017 contribution limit. If you’re 50 or older in the calendar year of your contribution you can invest up to $6,500 per tax year.
Financially Fit is your home fitness guide for all things financial, provided by RCB Bank. Find money-building tips, insights and inspiration to help you improve your financial well-being at RCBbank.com/GetFit. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.