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Friday, July 24, 2015

Retirement Planning Can Start with an IRA

IRA accounts are a good “first step” in retirement planning.  When you invest through a traditional or Roth IRA, you give those invested assets the potential to grow with compounding and you also position yourself for present or future tax savings.

An IRA is an account into which various investments can be placed.  It is yours and you control it, as compared to an employer-sponsored retirement account that you lose control over when you leave a job. 

IRAs are tax-advantaged.  In both Roth and traditional IRAs, account earnings compound with tax deferral until withdrawn – that is, they grow without being taxed.  With a traditional IRA, contributions are usually tax-deductible, based on your income, but withdrawals are taxed as ordinary income after age 59 ½.  With a Roth IRA, tax-deductible contributions are not permitted, but your earnings can be withdrawn tax-free.  That is the main difference between a traditional IRA and Roth IRA.  While both give you the chance to build retirement savings with tax advantages, the traditional IRA offers you a sizable tax break today, while the Roth IRA offers you a big tax break tomorrow.

Several variables should be considering when deciding to open a traditional IRA or a Roth IRA.  One key question is whether you will be in a lower tax bracket when you retire.  If you will be, a traditional IRA might be the better choice.  If you have decades to go until retirement and think you will retire to a higher tax bracket than you are in today, then the Roth IRA may be the better option.  When considering your options, chat with a financial professional to help you make the final decision. Then again, you could always open one of each!


Posted by: Patrick Carroll at 10:02 AM
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Friday, July 24, 2015

Taking Care of Your Wealth

Families that have created high value businesses often don’t take the necessary precautions in order for it to continue after they have passed it on.  There have been countless mistakes made causing family fortunes to diminish that could have just as easily been avoided.  Staying aware of all possible financial weaknesses and being proactive with planning and long-term strategies will prolong your family’s wealth for generations.

Failing to realize weaknesses among your financial plan such as not having the correct beneficiary named can leave assets subject to probate.  An incident such as this may be inconvenient but needs to be taken care of in a timely manner or else risk losing the assets.  Only 56% of American parents have a will or living trust.  This means that just under half of American families have not yet planned for what will happen to their wealth and how it will get there.  If you factor in history of family health, separated marriages or family business owners then more extreme planning is necessary that involves coordinating the estate and succession planning.

Although technology has become a major factor in building a business it also has its’ disadvantages.  More and more computer hackers are gaining access to email accounts allowing them to have control of bank accounts, brokerage information and asset transfers. This can be devastating to a business because it not only loses money but shows weakness and flaw to clients.  Security systems can be put in place to avoid such error but it is important to meet half way.  Be on the lookout for suspicious activity and keep vital information protected.

When talking about future planning it is necessary to include anyone who might have access to the estate.  Not including children on decision making can neglect them from understanding the process of sustaining wealth.  Without keeping them updated on how and why decisions are made they will be inexperienced when it comes time for them to be the prime decision maker.

It is never too early to begin planning for your future.  Developing a strategic financial plan can have potential to increase a family’s wealth and prolong it for generations.  Collaboration between family members and professionals will enhance your future and put your mind at ease. 


Posted by: David Shober at 10:01 AM
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