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Most retirement experts say that the typical person will need an estimated 70 to 80 percent of his or her income to live comfortably during the retirement years. It's never too early to begin planning for your retirement or to re-evaluate your retirement goals.
First, you should determine how much money you'll need, when you'll need it and the sources you'll use to achieve these goals. Our online investment planner will give you a better idea of the amount you may need to save to achieve your retirement goals. Start your retirement savings early.
Time is an important factor when saving for retirement. Of course, the sooner you begin saving, the longer your money has to grow. The longer you wait, the more difficult it will be to accumulate enough money to help you achieve your retirement goals. Saving early and gradually over many years makes it easier for you to save more over the long-term. Look at our Potential IRA Values Chart to see the benefits of saving early. You can choose from one of the many retirement accounts we have available to help meet your needs.
If your employer's savings plan is not enough to achieve the retirement lifestyle you desire, there are other ways to add to your retirement savings. An Individual Retirement Account (IRA) allows your money to grow tax-deferred. View our Tax-Deferred Compounding Chart to see the difference between the future value of a tax-deferred retirement account vs. a taxable account with an identical return. You may be able to maximize your retirement savings by choosing the right IRA. Traditional
IRA
For 2007, you can contribute up to $4,000 ($5,000 if you are age 50 or older) to a traditional IRA. Contributions may be tax deductible and you must begin taking required distributions by age 70½. A traditional IRA is an ideal account to roll over assets from your 401(k) as you change jobs. You can continue growing your investment and deferring income tax on distributions until retirement. Roth
IRA
In a Roth IRA, you can contribute up to $4,000 ($5000 if you are age 50 or older) for 2007, provided your income does not exceed certain limits. Contributions are not tax deductible, however distributions at retirement are generally tax free. Unlike a traditional IRA, there are no mandatory distributions at age 70½. If you're wondering if a Roth IRA or Traditional IRA would be better for you, take a closer look and compare the two accounts. Retirement Plan Options for Small Business Owners and
the Self-Employed SIMPLE
IRA
If you are a small business owner with 100 or fewer employees, SIMPLE IRAs allow you to offer tax-advantaged savings to employees with employer-matching funds for each participating employee. SEP-IRA
Independent contractors, partnerships and certain small businesses can take advantage of this easy-to-set up retirement plan. Let us help you create
a retirement plan. Contact your H&R Block financial
advisor today.
Don't yet have an advisor? Visit our office locator
to find an advisor near you or call 1-866-295-7912. Contact H&R BLOCK Financial Advisors for a complimentary financial review.
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