Retirement Planning/IRA's


Hi.I would love to find out more about IRA's.I am 35 and am seriously thinking about planning for retirement at age 60.I don't want to work the rest of my entire life.Neither do I want to be broke during retirement.Please help me to understand how best to invest.I honestly have no clue what to do outside of my company's 401k plan.I contribute 13% of my pay to that and otherwise I have no other savings for retirement.However, I do plan to keep increasing my contribution until I reach 15-20%. My company matches up to 4%.May 3rd will be one year in this investment ment. And I am in some kind of Life cycle plan managed by ING.What should my next move be?

Hi Sharon,

While I can't make any specific investment recommendations in a forum such as this, I can make some other suggestions. IRA's aren't an actual investment but are a set of rules determined by the IRS in regards to the taxation and withdrawal of these accounts. That means you can invest IRA funds into just about anything you like (stocks, bonds, mutual funds, CD's, precious metals, etc. I normally recommend that one invests only enough in their 401k to obtain the company match. The reason being is that employer plans generally have few investment choices and it is hard to tell how much in fees you are paying. There are fees that investment firms are not legally forced to disclose. Investing in an IRA on your own will allow you to have far more investment choices, possibly lower fees and more control over your funds.

Traditional IRA's and 401k's are tax deferred accounts meaning that you do not pay taxes on contributions but will pay taxes on retirement withdrawals. We have no way of knowing what tax rates will be in 25 years, plus, if you end up with a large sum of money, you may end up taking large withdrawals so you could face a heavy tax burden in retirement. So another source of retirement income that you didn't have to pay taxes on would probably be your best bet. A Roth IRA allows you to make after tax contributions with withdrawals being tax free. You could split your retirement income withdrawals into taxable and non taxable withdrawals which would allow you to have more control over the amount of tax you pay. Contribution limits are currently $5500 per year. You could contribute the 4% to your 401k and then put the rest into the Roth. If you max out the Roth and still have funds left to contribute, you could put more into 401k if you wish.

I would recommend that you meet with a good financial advisor or planner to discuss this and see what types of investments may be appropriate for you. I hope this helps. Let me know if you have any more questions. Best of luck!


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David M Iannopollo


I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances. I can also show you how to take advantage of the stock market gains without the risk of loss!


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