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Retirement Basics

Retirement Basics . Roth IRA Traditional IRA 401K. Roth IRA. After tax contributions Best if you expect to be in a higher tax bracket during retirement than now. Can hold a large range of investments (Stocks ,Bonds, Mutual Funds, Real Estate, etc.)

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Retirement Basics

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  1. Retirement Basics Roth IRA Traditional IRA 401K

  2. Roth IRA • After tax contributions • Best if you expect to be in a higher tax bracket during retirement than now. • Can hold a large range of investments (Stocks ,Bonds, Mutual Funds, Real Estate, etc.) • $4000 maximum per year (2007) if income is under $101,000. Your 2008 contribution can be up to $5000.

  3. Traditional IRA • Before tax dollars (tax deferred) • Taxed when withdrawn • Best used if expecting a lower tax bracket in retirement • Large range of investment options (Stocks, Bonds, Mutual Funds, Real Estate, etc.) • $4000 maximum per year if income is under $50,000.

  4. Other Considerations • Dividend treatment • Tax bracket consideration • Traditional to Roth rollover • Congress can change the rules for Roth or Traditional IRAs anytime

  5. 401K Plans • Matching contributions • Can be rolled into an IRA when switching employers • Sometimes limited investment options • Maximum contribution depends on income and company structure

  6. Get Started NOW! • Most brokers offer IRAs with small or no minimum investments. • Invest as much as you can in your employers 401K plan. Try for at least all of the match.

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