Retirement Planning: Nuts and Bolts

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Presentation transcript:

Retirement Planning: Nuts and Bolts

Journal 3.5 "Procrastination is, hands down, our favorite form of self-sabotage.“ How does this quote relate to investing and planning for retirement?

Stock Follow Up Rankings! - www.howthemarketworks.com Make sure you’ve chosen your investments by the end of the day, so you can start tracking

When should you start planning for retirement?

Video https://www.youtube.com/watch?v=LB4k-uL4nwM

How Much Do I Need? Determine the average salary for the career field you’re interested in: http://www.payscale.com/rcsearch.aspx?category=Job&str=accounting&CountryName=United+ States&SourceId=Country Estimate how much you’ll need: https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementIncome Calc.jsf

Plan on $0 from Social Security and be happy if you get some A program where the government helps you live in retirement by sending you money You pay money into it now and get money later What are potential problems? Plan on $0 from Social Security and be happy if you get some

Dividends

IRA Individual Retirement Account No restrictions on who can have one You don’t pay taxes on the money you invest, until you pull it out Gives you “more money” to invest Contribution limit of $5,500 (to all IRAs)

Roth IRA Pay income tax before putting it in the account, but don’t need to when you take it out May be better if you expect to be in a higher income bracket when you retire Shares the limit with a traditional IRA

Venn Diagram

401(k) Employer Sponsored Tax deferred You don’t have to report it on your income tax You pay taxes when you pull the money out Limited to an annual contribution of 18,000 dollars Big fees/higher taxes if you pull the money out before you retire (specifically are still with the company or under 59 ½)

403(b) Literally the same thing… … except only available to certain companies Public schools, healthcare, etc.

Financial Risks Inflation Deflation Recession