Retirement Planning

Today’s investors are facing retirement income planning challenges that simply didn’t exist 20 or 30 years ago. People are living longer than ever before. The traditional pension is going away. Unlike previous generations who had the luxury of having their retirement funded by guarantees made by employers and/or the government, the assets you’ve accumulated in your 401(k) or Individual Retirement Account (IRA) could be your most important source of retirement income.

Longevity risk, market risk, inflation and the increasing cost of health care are risks individuals should consider when planning for retirement. Today, there are many different types of investment products with various features and benefits that have the potential to add value and minimize these retirement planning risks.

According to the Social Security Administration, approx. $4 out of every $10 of the average American worker’s pre-retirement salary will be replaced by Social Security retirement benefits. This leaves a wide income gap retirees must fill with other investment assets. At XBA, we can help you plan for these challenges by providing solutions tailored to your individual profile.

Use the tax code to build wealth. If you’re covered by a qualified employer retirement plan, consider making the largest contributions you can afford, and invest the assets with the potential to provide long-term growth. If you are self-employed or not covered by a retirement plan at work, consider an Individual Retirement Account (IRA). There are several types of IRAs including a ROTH, SEP, SIMPLE, and Traditional.

Contributions to a traditional IRA are potentially tax-deductible each year (subject to income and contribution limits), and your earnings are tax-deferred until you start making withdrawals, after the age of 59.5. Under the new SECURE Act, you can delay your required minimum distribution until age 72, giving you many years of tax-deferred growth potential.