Posts Tagged ‘IRA’

Which IRA Is Right For Me?

Monday, August 26th, 2013

While there are only two main types of IRAs – the Roth and the traditional IRA – choosing the right one for you and your financial needs can still be a daunting task. Fortunately for you, we are here to help. Following the three below steps can help you determine the right type of IRA for you.

1. Know the Basics

The first step in choosing the right IRA is to understand the differences between the two. So let’s dive in…

Traditional IRA: The biggest advantage to this type of IRA is tax-deferred compounding. You won’t have to pay taxes on your IRA’s investment earnings until you start taking distributions for it after you retire.

Roth IRA: Unlike traditional IRAs, this type of IRA has no restrictions governing when you are allowed to start taking distributions. Furthermore, qualified distributions from a Roth IRA are tax-free, not just tax-deferred.

2. Determine Your Eligibility

There are certain eligibility requirements associated with both Traditional IRAs and Roth IRAs. Do you know what they are?

For starters, you can’t make a deductible contribution to a traditional IRA is your income is above a certain level. Furthermore, if you make over a certain amount of money, you may not even be eligible for a Roth IRA. And that is just the beginning. It gets pretty complicated. To help simplify the task, I suggest you check out the TurboTax IRA Calculator.

3. Weigh Your Options

This is where a Safe Retirement Solutions and some in-depth financial planning can work wonders.

Safe Retirement Solutions is your full service, independent financial advisory firm dedicated to providing you with the very best in retirement income planning.

We help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

If you have any questions or want to know more about what we can do for you, please contact Safe Retirement Solutions by calling 877-268-4086 or visit our websitetoday!

You can also follow Safe Retirement Solutions on Facebook and Twitter.

Solutions:

Finding the Right IRA in Three Easy Steps

Testing Your Financial Knowledge

Wednesday, March 28th, 2012

You don’t need professional financial advice, right? You know enough to get by.

Well, it is time to test your knowledge or current financial affairs. The following test was developed by the National Center for Financial Education (NCFE) to help you gauge your financial knowledge and how well you are taking advantage of the financial opportunities presented to you.

Answer either: True, False, or Don’t Know

1. The tax Reform Act of 1986 eliminated the tax advantages of real estate investments.

2. Two earner couples can take a deduction up to $3,000 or 7.5%, whichever is greater.

3. Mutual funds only invest in common stocks.

4. Since interest payments on a mortgage are tax deductible, home owners should always itemize instead of taking standard deduction.

5. A tax “deduction” of $1,000 is better than a tax “credit” of $1,000.

6. If an individual is in a 28% federal tax bracket, 28% of their income goes to the federal government.

7. A couple wants to establish an “education account” for their four year old child. If they use the child’s social security number they will not have to pay income tax on the investment’s earnings.

8. An investment which simply “defers” income tax offers no real tax advantage since the tax must be paid eventually.

9. Life insurance is an inflexible contract which offers no investment options, such as stocks or bonds.

10. If you own a mutual fund, outside of an IRA, there is no way you can avoid being taxed on dividends paid.

11. A wife should usually be the “owner” of her husband’s insurance policy to avoid paying federal estate taxes when she collects on the policy.

12. Joint tenancy is the best way for a couple to hold title to property.

13. Since annuities are offered by insurance companies the primary benefit is insurance.

14. An “insured” municipal bond fund has no investment risk.

15. Interest earned in a life insurance policy is always lower than the rate of interest you can earn in a certificate of deposit.

Questions 16-20 – Answer by Circling One Answer

16. Currently, a self-employed individual will contribute what percentage of his or her income towards Social Security?
a. 6.5% b. 7.51% c. 13.02% d. 15.30%

17. If you invest $1,000 for your child or grandchild, age 1, and the yield averages 12%, approximately how much will the investment be worth when the child reaches age 65?
a. $250,000 b. $500,000 c. $1,000,000 d. $1,500,000

18. In fiscal year 1995, the highest federal rate at which income is subject to tax is:
a. 28% b. 31% c. 39.6% d. 36%

19. Currently, corporate employees earning $50,000 will have the following amount contributed to their social security account:
a. $3,312 b. $4,243 c. $7,650 d. $7,848

20. A 45 year old individual would like to retire on $2,000 a month at age 65. Assuming an average inflation rate of 7.2% over the next 20 years, how much income will this individual need each month in retirement to keep pace with inflation?
a. $4,000 b. $6,000 c. $8,000 d. $10,000

FINANCIAL FITNESS SCORING

ANSWERS TO THE QUIZ:

Questions 1 through 15 are all FALSE

16 = d

17 = d

18 = c

19 = c

20 = c

SCORING: Total the number of correct scores and multiply by five. Twenty correct answers = 100%

RATING:

90-100% = Excellent shape

80- 89% = Good shape

70- 79% = Fair shape

60- 69% = Poor shape

How well did you do? Are you still confident in your knowledge of financial affairs?

For professional financial advice, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

Safe Retirement Solutions’ financial advisers help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

You can also follow Safe Retirement Solutions on Facebook and Twitter.

Sources:

A Financial Fitness Test