Tips for Retirement Savings Accounts

1. Contribute to an Individual Retirement Account (IRA)

Even if you are not eligible for the tax deduction, IRAs offer tax deferred growth.  With the uncertain future of Social Security extra retirement savings makes sense. Contact Atlantic Financial to find out if a Roth IRA might also be right for you.

2. Use Retirement Programs for the self employed:

If you're self employed, you have the ability to contribute your retirement savings to a special qualified retirement plan called a Simplified Employee Pension (SEP). Call 1-800-559-2900 to receive information about retirement programs for the self employed.

3. Keep Current

Depending on your situation, you may need to schedule meetings with your financial consultant, attorney and CPA from one to four times per year. It is also a good idea to make sure your will and estate plan are updated. Atlantic Financial recommends the use of a written and current financial plan when reviewing your investments, retirement savings plan, and estate plans. Consolidate your old IRAs and 401ks.

4. Take Advantage of your $10,000 per Year Gift Tax

If you have a net worth of over $600,000, your heirs could be subject to an estate tax of up to 60%. By making gifts to your heirs in $10,000 per year increments, you can not only lower the size of your estate, but also receive a deduction for making those gifts.

5. Charitable Contributions

There are many ways to make charitable gifts (Atlantic Financial can help you with over 30 strategies for making charitable gifts). For example, if you have stock which is highly appreciated in value, you may gift that stock to a charity. Not only do you receive a tax deduction for the full amount, but the charity may sell the stock without having to pay any capital gains.

6. Minimize the Amount of Money you keep in Checking and Savings Accounts

Too many people keep large sums of money in low-interest or non-interest bearing checking and savings accounts. Liquid cash can usually earn higher rates in money market accounts, some of which even offer tax advantages. These are available from Atlantic Financial. Our VIP account offers checks and a Visa debit card.

7. Keep Sufficient Liquidity

Other people make the mistake of not having enough of their funds accessible. Usually three to six months living expenses is sufficient. Insufficient liquidity could force you to sell investments at a time when holding would be more prudent, thereby increasing your loss.

8. Diversify

Time has shown that balanced portfolios with several types of stocks or mutual funds with fixed income have performed the best with lower risk than non-diversified portfolios. We suggest using a financial plan designed to help you properly diversify your investments and retirement savings.

9. Be Selective

Many well meaning friends have advised people to make poor decisions regarding the purchase or sale of investments. Top professionals can provide objective investment advice for your retirement savings, based on experience and state of the art information.

10. Be Patient

Perhaps more than any other reason, investors have lost money in investments because they sold at a low. The market has gone though many periods of highs and lows. Over time, the lows have proven to be the best places to buy rather than sell. It is unfortunate that many people have been driven by panic such as in 1987 and 1989. Many people holding carefully selected stocks in a diversified retirement savings portfolio would have realized substantial gains if they had held their investments another six months.

11. Don't Throw Away Used Goods

If you accumulate goods such as old furniture, clothes and books which you throw away you may be missing out on a tax saving opportunity. If the goods are usable, call a local charity. Often, the charity will pick up the goods and provide you with a receipt that can be used for tax deductions. Not only are you helping the environment and a charity by not throwing the goods away but you are saving money as well.

12. Tax Exempt Investments & Municipal Bonds

If you are in a high tax bracket, municipal bonds may make sense for your conservative assets. Municipal bonds are considered second only to Federal bonds in terms of safety - they offer interest which is free (not deferred) from state and federal taxes. Atlantic Financial has a wide variety of municipal bonds and other tax-free investments available. [a]

Contact Atlantic Financial

For more information or to have us answer any questions you may have, please call 1-800-559-2900,
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