August 2019: Roadmap to Retirement

Understanding Retirement

Whether you’re a business owner with a few employees, an entrepreneur or working a traditional 9-5, make retirement planning a priority now! These options will put you in the fast lane on the road to retirement.

Individual Retirement Account (IRA)

  • Anyone can participate
  • Contribute up to $6,000 in 2019 plus a $1,000 catch-up contribution for those over age 50.
  • Tax Benefits: Varies depending on Roth or Traditional

[alert_red]Tax Talk: Roth IRA vs Traditional IRA Roth IRA taxes the money as you contribute, so retirement withdrawals are tax-free. Traditional IRA money is taxed when you withdraw during retirement. People who expect to make more money and gain a higher tax rate near retirement typically opt for a Roth IRA.[/alert_red]

Simplified Employee Pension (IRA)

  • Ideal for a business owner with few or no employees
  • Contributions are tax deductible; retirement distributions taxed as income.
  • Contribute less than $56,000 or up to 25% of net self-employment earnings with $280,000 cap.
  • Must also make contributions for your employees equal to percentage of your own.

401k For A Business Owner With No Employees

  • Spouses can be included
  • Contribute up to $56,000 plus $6,000 catch-up contribution for those over age 50.
  • Tax Benefits: Contribute pre-tax, withdrawals after age 59 and a-half are taxed.


Making Money In Retirement

The fun doesn’t need to stop when you retire! These are a few ways you can still generate income when you’re retired, but you’ll want to start thinking about it now.

Purchase a Second Home for Income

  • Buy a second home before retirement and rent it out to help cover the mortgage.
  • Cash flow can increase when the home is paid off in retirement.

Generate Income From Dividends

  • Stocks that offer cash dividends provide regular income from your investment.
  • Consider reinvesting these dividends to potentially maximize earnings.

Downsize From Your Current Home

  • Evaluate the cost of a potential move and determine if it’s profitable.
  • Profit made or money saved can help pay off debt or fund retirement.

Need a financial planner to help sort it all out? Give me a call—I’ve got a great referral!