Creating Wealth and Dignity through Retirement Savings
Living comfortably does not have to be a dream for your future. Through proper investments in your IRA planning and growing your other investments, you can create a lifestyle for yourself that cannot be taken away very easily. Here are a few of the strategies that you can employ in order to create dignity and wealth for yourself through these investments.
Use the tax benefits of the IRA.
If you own a business and you are expecting to retire from that business, then you may be feeling the burn of over-taxation. Fortunately, there are many tax deferred accounts that you can use to your benefit including the individual retirement account.
Depending on whether you choose to invest in a Roth or a traditional individual retirement account, you will be able to move your tax obligation to the front or the back end of your deposit/withdrawal cycle. Depending on your income at any given time, this may be advantageous for you. For instance, if you are nearing retirement, then you will likely make less money in a few years. Taking the money then will ensure that you pay a lower overall tax rate.
Create equity in your investments that can be used for business purposes while you are alive.
You do not have to wait until you retire in order to take the benefits of your retirement accounts. Certain types of accounts will allow a tax deferred or tax free withdrawal for certain expenses such as a home buying expense, a medical emergency or other business purposes. Talk to a reputable tax accountant so that you will understand your options under different accounts. The laws are always changing, so make sure that you have an accountant that keeps up with the most current iteration of the tax law.
Living comfortably means living out of debt.
Saving at least 10 percent of your income whether you expect Social Security or not is essential to staying out of debt during your retirement. These investments should be placed into accounts that will provide you with dividends. For instance, after you have maximized the amount of money that you can put into your retirement accounts, you may benefit from placing your money into blue chip, dividend bearing securities with a history of paying out every quarter and never reducing their benefits to the shareholders.