MDNews - Cleveland-Akron-Canton

+++++++++++++++++++++++++++ + +++ + +++ +++++++++++++++++++++++++++ FINANCIAL PLANNING W ILL I HAVE enough money in retirement? It's a question more and more Americans are asking. The good news is that you may be able to retire with confidence and enough assets — if you get organized. That means thinking about what you want retire- ment to be, reviewing your current investments and benefits, and taking maximum advantage of some investment vehicles designed to provide retirement income. As with so many things, the key is to set clear goals and then pursue them. Because each individual's idea of the perfect retirement is different, everybody will have different financial needs. Try to determine what yours will be based on your vision of being retired. Don't accept the conventional wisdom that says all of us will require 60–80 percent of our income when we stop working. Instead, try to estimate a budget for your specific vision of retirement. Start by noting what you spend on the basics — food, shelter, clothing, health care and transportation. Add costs for travel, hobbies, entertaining, donations and a second home, if that's something you've worked toward attaining. If you plan to keep working after retirement, account for any income you anticipate. Think about what might happen to your taxes and apply that information accordingly. As you look ahead, be sure to consider that, realistically, you may be retired for a long time — 20 to 25 years or more — and your finances need to reflect that fact. Once you have a sense of your financial needs, look at the benefits you're confident you'll receive from a retirement account and/or Social Security. Also, review your savings and investments. When you know your goals and estimated expenses and income, you can create a written retirement plan that covers investments held in retirement and nonretirement accounts. As you do, it's a good idea to look at several sources of income that you can use to save and invest, such as traditional IRAs, Roth IRAs and annuities. Traditional IRAs tend to work best for people who believe they'll be in a lower tax bracket during retirement and meet the criteria for making tax-deductible contributions. Earnings and contributions are taxable as ordinary income when withdrawn, and withdrawals prior to age 59 and a half may trigger a federal 10 percent penalty. Payments from the account must begin when the investor reaches age 70 and a half. Income Strategies Income Strategies for Retirement by Paul D. Guerra The Roth IRA generally appeals to people who want tax- deferred earnings, are OK with the idea of making after-tax contributions now in exchange for tax-free distributions in retirement, and who expect to be in the same or a higher tax bracket when they retire. Holders of Roth IRAs often use them because they also may need access to their savings. The Roth IRA requires no minimum distribution during the investor's lifetime. With both IRAs, investors make periodic contributions and direct how the money will be invested. Annuities also may have a place in your portfolio. An annuity is a contract between you and an insurance company in which the insurer agrees to make periodic payments to you, begin- ning either immediately or at some future date. Annuities are designed to be long-term investments used for retirement. They have contract limitations, fees and charges that include, but are not limited to, mortality and expense risk charges, sales and surrender charges, administrative fees, and charges for optional benefits. There are limitations on the amount of funds that may be withdrawn without a charge, and withdrawals reduce annuity contract benefits and values. Additionally, withdrawals of earnings are subject to ordinary income tax, and a federal 10 percent penalty may apply to withdrawals taken prior to age 59 and a half. Ultimately, proper planning may help you get the retirement you desire, if you know what you want and what your options are — and pursue both with resolve and clarity. Note: Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Brookshire Wealth Management is a separate entit y from WFAFN. Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences. Please consult your legal advisors regarding your fiduciary duties. Wells Fargo Advisors Financial Network, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. Paul Guer ra i s the manag ing pr incipal of Brook shire Wealth Management in Canton OH. For more infor ma- tion visit www.brookshirewealth.com or e-mail Mr. Guerra at paul.guerra@wfafinet.com. ■ 2 0 | Cleveland/Akron/Canton MD NEWS ■ M D N E W S . CO M ■ M A R C H /A P R I L 2 0 1 5

• Cover