Valuable Lesson on Retirement

Below is a link to an article on a couple fully retired- but will they keep their success?

Check out the link below and pick up a valuable lesson. We offer a free consultation and you can see if you are ready for retirement or not in a matter of minutes.  We have helped people save thousands on their retirement planning.  Check out the story and come back to us for your personal no obligation review.

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How Planning Can Save you $1000+

Looks like summer is finally right around the corner. That means the year is almost half over and before you know it’s over.

Too many clients (almost all of them) wait until the winter before they look at their tax obligations. Even worse, they wait until that season before they speak with their professional in any kind of proactive way.

That’s a problem, and it could be costing you some serious savings.

Here’s an example:

Let’s say that you were considering taking money out of a pension (401k) to finance the down payment on a house. It’s quite a common maneuver. But let’s say next that you do this withOUT discussing it ahead of time with a professional. That could be a four (or five) figure mistake.

If you were to come into our offices or contact us before such a move, I would ask you a few easy, but very important questions, and then (depending on the answer) likely advise you to first roll the money ($10,000) into a Traditional IRA. You could then withdraw the money at a savings of $1,000.00. This is because money used for a first home, up to $10,000, is penalty-free when taken from an IRA, but NOT a 401K.

Would you be pleased by that move? I’d guess “yes”, especially if you knew about other clients I know of who failed to plan. This couple just learned of the $41,000.00 penalty they had to pay for doing the same thing, but from their 401k.

Ouch.

There is no guarantee that you will save by speaking to us in advance. But this I CAN guarantee: If you don’t speak with us, we won’t be able to save you a dime.

Let us know if this was helpful.  Do you have a situation that might create a tax issue. Be proactive and contact a tax professional.  Hopefully us.

2009 Year End Tax Tips- 401(k) Plans

401(k) Plans

A 401(k) plan allows you to allocate a portion of your salary to an account where the funds can grow on a tax-deferred basis.  In addition, your company may provide matching contributions based on a percentage of your salary.

Year-end strategy: Adjust your 401(k) plan contributions to increase your retirement nest egg.  For instance, you might defer more dollars to your 401(k) account after you clear the 2009 Social Security wage base of $106,800.  This will result in little or no reduction in your take-home pay.  As with other tax-qualified retirement plans, a 401(k) plan must meet strict nondiscrimination requirements to maintain its tax-favored status.  There is also an annual dollar cap on elective deferrals.  For 2009, you can defer a maximum of $16,500 to your account.

Tip:   If you’re age 50 or over, you can add a “catch-up contribution” of $5,500.  Thus, the total maximum annual deferral for taxpayers age 50 or over is $22,000.

Stay tuned for more 2009 Year End Tax Tips

Related articles on Retirement Funding

• 3 easy ways to start saving now (money.cnn.com)