Invest in Your Future – Invest Pre-Tax

Have you ever asked yourself, “Will I have enough saved up to fulfill my retirement dreams? Will Social Security be enough to sustain me?”  Unfortunately, the answer to the latter question is, probably not. Government assistance is not designed to sustain you through retirement, so you must be proactive in saving for your future. The good news for you is that with smart investing, you will be able to retire comfortably.   There are two things that you need to have in place before you decide to retire… 1) a solid 401(k) or IRA investment account and 2) a Michigan life insurance policy.

Pre-Tax Investing for a Sound Future

Retirement is expensive, plain and simple. Experts estimate that you will need 70 percent of your pre-retirement income (90 percent or more for lower earners) to maintain your standard of living when you stop working. It’s time to take charge of your financial future today. Here’s how to maximize pre-tax retirement savings:

• § Invest in your employer’s pre-tax savings plans, such as a 401(k). Contribute as much as you can and use the automatic deduction feature to place money into your retirement account at every pay period. Over time, compound interest and tax deferrals will make a huge difference in the amount you will accumulate.
• § Place your money into an Individual Retirement Account (IRA). When you open an IRA, you have two options – a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA that you choose.
• § Avoid dipping into your retirement savings, as you will lose principal and interest and may lose tax benefits. If you change jobs, roll over your savings directly into an IRA or to your new employer’s pre-tax retirement plan.
• § Start saving early. The sooner you start saving, the more time your money has to grow. Devise a savings plan, stick to it, and set goals for the future.
• § Put the maximum amount allowed into your employer-sponsored retirement accounts. If you cannot afford the maximum, try to contribute enough to maximize any employer matching funds. This is free money, so take advantage!
• § Study your investment choices carefully. The more you know about investing, the more likely you will choose wisely.
• § Learn as much as you can about your plan’s administrative fees, investment fees and services fees to avoid reducing the amount of your retirement benefits unnecessarily.

Investing pre-tax will benefit you right now and during retirement. For instance, if you are in the 20 percent tax bracket, your paycheck will only be reduced by 80¢ for every dollar that you invest. You will also not pay taxes on those contributions or earnings until you start to withdraw them.

Investing a predetermined amount on a regular basis through your company 401(k), a Roth IRA, etc. makes solid retirement sense. For more information, contact your agent to learn more about retirement and Michigan life insurance solutions that can help you prepare for your future.

Make Saving for Retirement a Priority

Experts estimate that you will need about 70 percent of your pre-retirement income for retirement. For lower income earners, you may need 90 percent or more to maintain your standard of living when you stop working. Take charge of your financial future… start saving now and have a secure Michigan life insurance policy in place… so you can relax and enjoy later!

Retirement Planning Tips

The average American spends 18 years in retirement. Here are some ways to maximize your saving potential for the future:

• Select a target date for your retirement and calculate how much you think you will need by that date to live comfortably.
• Learn more about your Social Security benefits by reading the statement that you receive around your birthday each year.
• Take advantage of employer-sponsored 401(K) or 403(B) retirement plans and invest at least the maximum amount that your employer matches. If you don’t have a 401(K) or 403(B) plan through your employer, contact your financial institution. Otherwise, contact your Michigan insurance company, when you start up a life insurance policy, for references on reputable institutions to start a retirement plan.
• Ask your employer for a pension or retirement plan if there is currently not one offered.
  • Do not touch your long-term savings of which should only be for retirement. You will lose principle, interest and could lose tax benefits. Use your short-term savings for emergencies only as well.
  • Diversify your assets in stocks, bonds and mutual funds.
    • Seek out the advice of a financial advisor who can help you place your money where it can earn the most.
    • Review your investments and goals at least annually and make modifications to increase your returns.
    • Open an Individual Retirement Account (IRA), either a traditional or Roth, and deposit the maximum amount allowed per year.

Talk to your employer, your bank or your financial advisor and ask questions about how to more effectively save for retirement. Get practical advice and act now.

Financial security doesn’t just happen; it takes planning, commitment and your money!

Ask for your Michigan life insurance agent for more information on protecting your investments before retirement.