Your Retirement

Retirement planning is important to your future. As of 2017, the average monthly Social Security payment was $1,360. Most likely, you will need more than that to live comfortably during your later years, as you will still have bills, medical needs, and may be paying rent or may still paying on a mortgage. Keep in mind that retirement can last 30 years or more these days, and the cost of living will only increase. A retirement plan allows you to provide for yourself and/or your spouse, so you can enjoy your golden years.

There are various retirement options to choose from, including: Traditional IRA, Roth IRA, Simple IRA, 401K, plus other various retirement plans including those available through your employer. IRA’s can host a range of financial products such as stocks, bonds, mutual funds, certificate of deposits (cd’s), and the like.

BUT WHAT'S THE DIFFERENCE?

To understand the difference, we must first look at how each retirement plan operates.

ROTH IRA: Contributions to a ROTH IRA are not tax-deductible, but eligible distributions

are tax free. What this means is, you contribute to a Roth IRA with after-tax dollars, but as the account grows, you will not face any taxes on capital gains. So when you decide to retire and collect, you can withdraw from the account without any taxes being taken out on your withdraw. A ROTH IRA may seem ideal, but keep in mind, there is a limit to the amount of money you can contribute to your ROTH IRA (this is the same for any IRA you contribute to, be it Roth, Traditional, Simple, etc…).

**Tip – Now may be the time to start a ROTH IRA, as you are now in what could be

the lowest tax bracket you will probably every be in. So, as you pay taxes on your

contributions now, not much will be taken out for taxes**

TRADITIONAL IRA: A TRADITIONAL IRA is a type of individual retirement account that lets your earnings grow tax-deferred. You pay taxes on your investments gains ONLY when you make withdraws in retirement. However, there’s no maximum income limit. YOU CAN INVEST IN A TRADITIONAL IRA NO MATTER HOW MUCH MONEY YOU EARN. But only the owner of the TRADITIONAL IRA can make contributions to the account.

SIMPLE IRA: A SIMPLE IRA in an employer-sponsored retirement plan offered within small businesses that have 100 or fewer employees. Small businesses may favor SIMPLE IRAs because they are less expensive and less complicated alternative to a 401(k) plan. Your contributions are tax deductible, but your investments grow tax-deferred until you are ready to make withdraws in retirement. Both the employer and the employee make contributions to a SIMPLE IRA.

401(k): Employee 401(k) contributions are automatically deducted from their pay each pay period. This money is taken out before taxes, meaning when you withdraw from your 401(k) after you retire, taxes will be taken out from each withdraw. The contributions can be

invested at the at the employee’s direction into one or more funds provided in the plan. Although taxes are withdrawn from you 401(k) after retirement, unlike an IRA (again, where taxes are taken out prior to retirement), you are able to contribute a lot more money to a 401(k) than you can to any type of IRA.

Now that you have had a glimpse into the various retirement options available and are

ready to secure your future for retirement, we suggest you contact an advisor and get

started today.

For a private consultation, we suggest contacting EJ at Edward Jones-Financial Advisors. Edward Jones (Edward D. Jones & Co., L.P.), whose headquarters is in Des Peres, Missouri,

USA, is a financial services’ firm that serves nearly 7 million investment clients in both the United States and Canada through its network of over 14,000 locations, with $1 trillion dollars in assets under management worldwide. Edward Jones is a company that focuses solely on individual investors and small business owners.

EJ – Financial Consultant (Manatee County)

Edward Jones – Financial Advisor

5889 53rd Avenue East

Bradenton, Florida 34203

(941) 727.0204