Planting a Plant

Saving for Retirement

Let us help you accelerate your retirement savings.

The government wants you to plan ahead and incentives it, are you taking full advantage?

Expect to replace

70 - 85%

of your income in retirement

How much do I need?

Types & Treatment of Tax Preferenced Accounts

Contributions

Growth in the acccount

Distributions

Pre-tax or Tax Deductible

Tax-Deferred

Tax-Free

Health Savings Accounts (HSAs)

Traditional Retirement Accounts

Roth Retirement Accounts

529 Plans (College or ABLE)

Non-Qualified Annuities

Types of Retirement Accounts

Pre-tax or tax-deductible contributions & tax-deferred growth.

Employer-Sponsored

SIMPLE IRA

SEP IRA

401(k)

403(B)

457

After tax contribution

Tax-free growth & withdrawals

Roth 401(k)

Roth 403(B)

Roth 457

Individual

Traditional IRA

Roth IRA

Roth vs. Traditional IRA

Contribute up to $6,000 ($7,000 for 50 and older)

in 2020 combined annual contributions to Roth and traditional IRAs.

Roth IRA

Why choose a Roth IRA?

  • If you expect to be in a lower tax bracket now and a higher tax bracket in retirement.

  • If you need the flexibility to withdraw your contributions at any time without owing taxes or penalties.

  • At 59 ½ you can withdraw your contributions and gains completely tax free, if 5 years into it

Why you might avoid a Roth IRA?

  • Roth IRA contribution limits are reduced or eliminated at higher incomes.

Traditional IRA

Why choose a Traditional IRA?

  • If you expect to be in a higher tax bracket now and a lower tax bracket in retirement.

  • If you need the tax-break today.

Why you might avoid a Traditional IRA?

  • The amount you can deduct for contributions may be reduced or eliminated if you or your spouse is covered by a retirement plan at work.

  • There are Required Minimum Distributions

  • There is a 10% tax penalty for early withdrawals for non-qualified reasons. 

Employer-Sponsored Accounts

  • These are opened only by employers and their specifics vary

  • Try to contribute enough to get the max. match, at least, if offered.

  • You cannot contribute if you leave employer

  • “Rollover” with caution from your employer account into an IRA when you leave your employer.

  • Loans can have high penalties pre-59 ½ .

  • Penalties exceptions exist for education, home purchases, medical expenses, etc.

If your employer doesn't offer a retirement program

  • You might be eligible for Oregon Saves

 

Oregon Saves

 

"Oregon employers are required to facilitate OregonSaves if they don’t offer an employer-sponsored retirement plan." 

www.oregonsaves.com

Saver's Tax Credit

The Saver’s Credit is a great way for low- and moderate-income people to save for retirement while also earning valuable tax credits.

The saver's tax credit is a non-refundable tax credit available to eligible taxpayers who make contributions to....

Employer-Sponsored Retirement Accounts

Individual Retirement Accounts

ABLE Accounts

Claiming a saver's credit when contributing to a retirement plan can reduce an individual's income tax burden in two ways. 

  • the saver's credit reduces the actual taxes owed, dollar for dollar.

  • you receive either a reduced tax bill today or tax free withdrawals in retirement via a qualified account. 

2020 Saver's Credit Income Limits

Credit Amount

Single

Head of Household

Joint Filers

50% of contribution

AGI of $19,500 or less

AGI of $29,250 or less

AGI of $39,000 or less

20% of contribution

$19,501 - $21,250

$29,251 - $31,875

$39,001 - $42,500

10% of contribution

$21,251 - $32,500

$31,876 - $48,750

$42,501 - $65,000

0% of contribution

more than $32,500

more than $48,750

more than $65,000

The credit is worth a maximum of $1,000 ($2,000 if you file jointly).

Besides falling into one of these income tiers, you'll also need to meet the following requirements to qualify for the credit:

  1. You are age 18 or older

  2. You're not a full-time student

  3. No one claims you as a dependent on their return.

  4. Rollover contributions do not qualify

The Power of Tax Credits Vs. Deductions

Deductions lowers your tax bill by reducing your taxable income, a credit directly reduces your tax bill. Saver’s credit is not a refundable credit. 

Have Questions?

Use our online calendar to schedule a complimentary virtual financial consultation today!

If you, or someone you know, is in need of financial advice right now, follow the link below to schedule your complimentary virtual consultation.

 

No obligation or commitments required.

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TODD MANN FINANCIAL SERVICES INC. 
1840 5th St. Springfield, OR 97477  |  (O) 541-583-0093  |  Todd@ToddMannFinancialServices.com

Investment advice is offered through Belpointe Asset Management, LLC. Insurance and annuity products may be offered through D.H. Hill Securities, LLLP. Securities are offered through D.H. Hill Securities, LLLP, Member FINRA/SIPC. D.H. Hill Securities, LLLP, Todd Mann Financial Services Inc., and Belpointe Asset Management, LLC are not affiliated entities. Todd Mann Financial Services Inc. is currently insurance licensed in the states of Oregon, New Jersey, and Wisconsin.

Insurance and annuity products may be offered through D.H. Hill Securities, LLLP. 

 

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