Retirement Savings (NOW!

)
 Introduction
Today, youve got to come up with
retirements funds by yourself. (how?)
We all need to know about Social
Security, employer-funded pensions,
and current retirement plans. FICA
taxes paid today are providing benefits
for todays retirees. The money you
pay is not being saved up and
invested in an account for you.
 Eligibility (Social
Security)
95% of Americans are covered. And it
keeps many Americans above the
poverty rate.
Benefits formulareplace 42% of
average earnings based on number of
earnings years, average level of
earnings, adjustments for inflation,
income brackets.
Increased benefits if you delay
retirement (can lose 30+% if starting
early). The text has the specific numbers.
Poverty Rates Before and After Social Security for
Persons Aged 65 and Older, by Gender, 2009
Funding Your Retirement
Needs
 MyPlan
Lets look closer at Step 6: Determine How Much
You Must Save Annually Between Now and
Retirement
Put money away little by little, year by year.

Use online retirement planning websites

This one is rather fun, and easy. This will be

included in your financial plan. You may have an
updated link in your news for the course.

MyPlan - http://
personal.fidelity.com/planning/retirement/content/m
yPlan/index.shtml
Online Retirement Planning
(cont.)
 Plan Now, Retire Later
What Plan Is Best For You?

Most plans are tax-deferred ( Much

better option for saving!!!)
Contributions can be made on fully or
partially tax-deductible basis.
Earn compound interest on non-taxed
contributions and earnings.
Taxed when you withdraw funds
(traditional IRAs).
 Defined-Contribution
Plans
You and employer or your employer alone
contributes directly to a retirement account
set aside for you.
Different plans : Profit-Sharing Plans,
Employee Stock Ownership Plan (ESOP), and
401 (k) Plan
How much can you contribute?

$18,000 for 401(k) and 403(b) plans in

2016

Catch up of additional $6,000 (if 50+)

 Self-Employed and Small Business
Employees

Keogh Plan or Self-Employed

Retirement Plan
Simplified Employee Pension
Plan (SEP-IRA)
Savings Incentive Match Plan
for Employees or SIMPLE plan
 Individual Retirement
Arrangements (IRAs)
Traditional IRA - Savers tax
credit
Roth IRA - Money grows tax free
and withdrawals are tax free.
Coverdell Education Savings
Account (known as Education
IRA) and 529s
 Traditional Versus Roth IRA: Which is Best for You?

Choose the Roth IRA if you can pay your

taxes ahead of time and you want to
avoid the interest charges on growth
(more $$ the longer the time). The
younger you are the better this is for
you.

If you are currently in a high tax

bracket the traditional IRA may be
better. You can do both!

REGARDLESS START NOW

Skipping Just 1 Year Can Cost You Almost
$235,000
 In summary
You need to fund your own retirement
Set your estimated amount needed
(http://www.deathclock.com/ (quick & easy)
or Live to be 100
https://www.livingto100.com/ (more
accurate). This just gives you an idea. If
you were born on 1/1/90 (female, optimistic
non smoker) you will live to be 103. If you
retire at age 65, you will need to have 38
years of income!!!!! SoSTART NOW!!!

14
 In closing
Welcome to your
FINANCIAL
FUTURE

today!

Make good choices