Planning for retirement is an important aspect of your finances that you should consider as soon as you begin your career. Having your finances in check early on, will ensure financial independence during your working years and through your retirement. But what is the best way to plan for retirement? Fortunately, the Certified Public Accountants at Ives, Sultan & Spike on Long Island have a few tips to ensure you’re financially stable through your retirement.
- Begin Saving Early On – It is never too late to start saving for retirement, but it’s never too early either. The sooner you begin putting away funds for your future, the more time your money has to grow.
- Have Realistic Goals – By keeping a reasonable budget, you can assess how much of your income you need to live reasonably now, and how much can be saved for retirement.
- Contribute to an IRA – Similarly to a 401(k), an IRA can offer huge tax breaks. There are two types of IRAs, a traditional IRA and a Roth IRA. To decide which IRA is right for you, consult with your Financial Planner or Certified Public Accountant. You can contribute $5,500 this year; but, if you’re over the age of 55, you can contribute an additional $1,000 to your IRA per year.
- Contribute To Your 401(k) – Contributions to your 401(k) are due by December 31st. Contributions are tax-exempt and by contributing the full amount, you can save a substantial amount of money on federal income taxes. For 2014, $17,500 is the maximum you can contribute to your 401(k). Again, if you’re over the age of 55, you can contribute an additional $5,500 per year.
- Don’t Touch Your Retirement Savings – Withdrawing from your savings early can cause you to lose tax benefits or have to pay withdrawal penalties which can end up costing you more money in the long run.
Planning for retirement early on is the best way to ensure that you will live comfortably in your retirement. For more information about planning for retirement, consult with your CPA.
Ives, Sultan & Spike is a Certified Public Accountant firm located on Long Island, NY. Providing accurate, timely personalized financial, accounting services, tax services, personal finance, retirement planning, bookkeeping, audit protection and more.
For more information about who they are and the services available, please visit their website at www.ives-sultan.com.