Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.
We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.
Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.
Yes, You Can Expand Your Approach to 401(k) Investing
If your company offers a pension plan, you’re a rarity. While that was the most popular retirement planning tool for decades, not many organizations offer pension plans today. The tool that’s now in its 40th year and has taken the place of pensions is, of course, the 401(k) for investing.
401(k) investing has great benefits. For example, in 2018, your contributions are tax deductible up to $18,500. If you’re 50 or older, the IRS allows you to contribute $24,500 a year – tax deductible. Another benefit to the 401(k) investing method is that many employers will match contributions to a certain percentage (it varies, but rarely goes above 6 %).
What Are Your Options?
While the 401(k) has been around since 1978, a Roth 401(k) option was added in 2006. The traditional 401(k) investing model allowed for tax deductions upon contributing, but in retirement, those funds are taxable. The Roth model does not allow deductions on your contributions. Rather, you pay taxes up front, and then in retirement as you withdraw money, all of it – contributions and earnings - comes to you without a tax bill.
For employees in a lower tax bracket, the Roth model makes a lot of sense, because they can potentially see a big tax benefit upon retirement and are likely not depending on current tax deductions.
Another benefit of the Roth 401(k) is that there is no income limit. Plus, the traditional Roth IRA caps contributions at $5,500, or $6,500 for those 50 or older.
Getting the most you can out of your money should be a priority, but it can be difficult to do without professional guidance. That’s why it’s smart to bring a fiduciary in to guide you through all the options, and there are many more than most investors know about. More options mean more ways to get to the freedom you want, whatever that looks like.
At Family Investment Center, we’ve made it our mission to understand all the possibilities that exist for our clients. We’ll listen to you as you talk about your goals, and we can plan your route in meeting them. Contact us today and let’s discuss your options.
Retirement Planning With 401(k) Investing: A Quick Review
Now that 2018 is more than halfway completed, were you aware that you can increase the amount you put into your 401(k)? If not, there’s still time. Each year, the IRS assesses what the contribution limit should be, which is an important number for those focused on 401(k) investing for their future. For three years, the IRS held the limit to $18,000 per year. For 2018 and until they make another change, the limit will be $18,500. This means that investors can make changes to how much they contribute at any time, as long as their elective contributions don’t exceed $18,500.
It’s also important to note that if you’re age 50 or older, you can take advantage of something called the “401(k) catch-up,” which allows an extra $6,000 per year to be invested into the account. This amount remains unchanged, but it’s still a useful tool for those who got a late start investing for retirement.
If you’re self-employed or own a small business, you will also see a change in the amount you can save in your SEP IRA or solo 401(k). It goes up from $54,000 to $55,000. If your employer lets you take advantage of after-tax contributions in your 401(k) investing, you will also be able to take advantage of that increase to $55,000.
Furthermore, the phase-out of deductibility for IRA contributions will also change. There will be an increase to income phase-outs adjusted to the gross income limits for those interested in the saver’s credit. Unfortunately, the limit to your individual retirement accounts will remain the same at $5,500 per year. This has gone unchanged for six years.
Your IRA catch-up (age 50+) opportunities also remain unchanged at $1,000. However, your deductions for IRA contributions to a traditional IRA are phased out at higher income levels. You can still contribute if you’ve earned too much to get a deduction, but it’s going to be non-deductible.
Are you interested in the savers credit? You can get the savers credit if you and your spouse file jointly and make up to $63,000. This is an increase from $62,000 last year. If you’re filing as the head of the household, the limit will increase by $750.00 from last year to $47,250, and from $31,000 to $31,500 for singles and married couples filing separately.
There are a number of ways to get ahead on your retirement goals. To make sure you don’t miss a step, contact us at Family Investment Center. As a fiduciary, we’ve always acted in your best interests – so let’s talk about your goals and let us show you the ways you can reach or exceed them.