Road to Retirement

Your Current Retirement Situation

• Old definition: “Withdrawal from one’s position or occupation or from active working life.”

• New definition: “Achieving a state of financial wellness and security so you can live the lifestyle you desire.”

Questions About Retirement

S1

• How do you feel about your current financial situation?

• How do you feel when you make small financial

decisions?

• How do you feel when you make large financial decisions?

• How do you feel when you think about retirement?

• How do you feel when you talk to your loved ones about

money?

Questions About Retirement

S1

Questions About Retirement

S1

• Only invest with risk capital—that is, money you can afford to lose.

• Gain a high-level knowledge base about any investments you’re considering.

• Build a team of trusted advisors.

• Before making any decision, take time to evaluate it logically.

• Reduce the influence of emotions by partaking in an activity that reduces your stress levels.

Tips to Lowering Emotional Stress When Making Financial Decisions

Retirement & Income

S3

Potential Income Sources at Retirement:

• Social Security

• Pension

• Assets

• Annuities

• Employment

• Business Enterprise

Retirement Plans & Taxes

S4

Tax Impact

• Tax-Deferred. Taxes are paid later with tax-deferred investments. You are able to invest the money that the government would have taxed. Tax deferred investments can include 401(k), 403 (b), and IRAs.

• Tax-Deductible. This feature allows a person to deduct the amount invested from their gross income, lowering overall tax liability. Tax-deductible investments can include 401k, 403b, Simplified Employee Pension Plan (SEP), Keogh and IRAs.

• Tax-Free. Provide returns that are free from federal income tax and in some cases, state tax. Roth IRA, municipal bonds and 529 plans – assuming monies are used for schooling – are all examples of tax-free investments.

Retirement Plans & Taxes

S4

Employee-sponsored Retirement Plans

• These types of retirement plans can help you reach your retirement goals.

• These plans are eligible to receive tax benefits from the IRS.

• Generally three types of plan:

o Defined contribution plan based on contribution and investment performance

o Defined contribution plan based on employee’s salary and number of years in the plan

o A combination of the two plans above