Retirement Planning FAQ
Frequently Asked Questions About Retirement Planning
How Much Can I Contribute to My Retirement Plan?
What is retirement planning, and how much can you contribute to it? Simply put, retirement planning is contributing funds to your savings to utilize once your career ends. How much you can contribute depends on whether you’re an individual, employee, or employer. An individual can start a Traditional or a Roth Individual Retirement Account (IRA) which has an annual cap of $6,000 (plus an extra $1,000 if you’re opening after the age of 50). Employees can instead contribute up to $19,500 to a 401(k) or 403(b) (plus $6,000 more if you’re over 50) and $12,500 for a Traditional IRA (add $3,000 more for those 50+). Employers, on the other hand, have many different options and should directly schedule a consultation with Sun Cities Financial Group.
Is There Any Validity to Retirement Planning Rules Such as “Saving 10% of Your Gross Income”?
What works for one person may not work for another, so instead of validating a general statement, we’ll help you assess what works best for you. We believe the following is wise when planning for retirement:
- Contribute plenty and early, but don’t overdo it, especially if you’re still young.
- Check with a financial advisor before setting aside a percentage of your salary. For some, 10% works, but for others, it’s not enough.
- You don’t always need 80% of your salary to live well. It depends if you have loans to pay off like mortgages, or if you have other sources of income.
- Stocks are not suited for everyone, so it’s best to map out your investment goals before throwing a percentage of your income into the market.
- Assess what you and your family would need in an emergency and if you could take out a loan. A blanket term like “save six months of your salary” doesn’t apply to all.
When Do Retirement Plans Need to Be Set Up?
If you’re wondering why retirement planning is important, the answer is straightforward: to live a comfortable lifestyle once your income stops rolling in. It’s never too early to start, and the sooner you do so, the more you’ll have waiting for you once that day comes around.
How Do I Determine My Long-Term Financial Goals?
Being realistic about your financial potential and making your priorities clear is the best way to solidify long-term financial goals. Consider family priorities, health needs, early retirement, tax planning in retirement, and the like.
What Are the 401(k), SEP IRA, and IRA Limits?
You can contribute up to $20,500 to a 401(k) as of 2019 ($27,000 for those 50 and older). Meanwhile, you can contribute 25% of your net earnings with a cap of $61,000 for a SEP IRA. An IRA is instead limited to $6,000 ($7,000 for people over 50).
Can You Help With Retirement Projections?
At Sun Cities Financial Group, we’ll be happy to help you accurately project your retirement income by collecting data and assessing your priorities.
What Do Women Need to Keep in Mind With Regards to Retirement Planning?
Women save on average 60% less for retirement than men, but tend to live longer. Women can prepare to take on their financial futures by identifying and working towards their long-term financial goals.
What Problems Do Unmarried Couples Face Regarding Retirement and Estate Planning?
As unmarried couples lack joint legal rights, they should note that they won’t automatically have the right to inherit property or other assets, and can’t represent their counterpart in the case of a health emergency.
Get Started on Your Retirement Plan Today
Sun Cities Financial Group has been helping Phoenix residents secure safe and profitable retirement funds for more than 20 years. Call us today to schedule a consultation.