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
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
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
when reviewing your investments, retirement savings plan, and estate plans.
Consolidate your old IRAs and 401ks.
401k Rollover / IRA
4. Take Advantage of your $10,000 per Year Gift
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
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.
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]