Monday, April 29, 2013

4 Ways to Catch Up on Retirement Savings

When Andy and Joy Trotti sat down to look at their finances three years ago, they realized they were not on the track options for phasing in a decade or more, as they wish. Both entrepreneurs in Tampa, he as an oncologist and she as a real estate entrepreneur, Trottis want to find ways to increase their retirement savings quickly so if they choose to stop working in their early sixties, they can make it comfortable. Together, they chose financed pension plan, a unique option that allows them to maximize the power of their business now for comfortable pension later.

"A funded plan has worked well for us because we have a stream of income from the business my husband that we need to use for everyday expenses," said Andy Trotti. "We are dedicated stream of funding our retirement income, and the back is quite amazing now."

To Trottis not alone. Many employers plan to work forever and then decided that having the option to remove to do. If you're looking for ways to reach out to your colleagues to save for retirement in their careers, here are some ideas to help you.

Financed Planning

As Trottis, business owners can borrow the strength of their business, paying interest along the way, to ensure retirement income later. Use Trottis plan available through Entaire Global Companies, Inc., which funded pensions expert for independent professionals and entrepreneurs .. Lee Novikoff, president of Tidal Group, the oil exploration company Schertz, Tex.., Set a plan two years ago and said to have given an average return of 15 percent. "In the last two years, this is the only thing that I have given a positive result," he said.

Funded pension plans invest business owners' funds of indexed annuities are hedged so that the assets can only go up in value, not down. Plans are available through distributors Entaire Global Financial children, or through an independent insurance agent and certified financial planner.

Social security

While millions of Americans who worked for years counted on Social Security income during retirement, the government plans to "never created a single source of retirement savings," said Donny Sheinwald, director of retirement services for CheckPoint HR advisory and small to medium-sized retirement option business.

Most experts believe that workers retiring in the next five to 10 years could still count on receiving benefits included in the statement of their Social Security Administration, said David Levi, CFP, CPA, managing director of CBIZ MHM, financial advisory services company. But most entrepreneurs need more revenue, because Social Security payments monthly average was $ 1,067 in April 2010.

Even businessmen who plan to retire within the next few years could be relied upon Social Security to supplement their retirement income, "arrangements were made to keep the [Social Security] digestion, and most likely will affect people under the age of 50," said Arthur Montgomery, president of Paramount Financial, LLC. "The main concern I have for many traders if Social Security goes way based tests, in which they look at your assets and decide if you are too rich to qualify for these benefits can be bad for employers because they are likely to have significant assets and no significant cash flow naturally. '

Whole Life Insurance

For some business owners, life insurance plans may offer additional income during retirement, because the plan offers the certainty of cash accumulation value that grows tax-deferred basis year. This accumulation of cash is sometimes referred to as "living benefits," and the business owner can access growth to provide additional retirement income tax free.

Loans against life insurance plans offer tax benefits not available from other retirement strategies, such as liquidating stock portfolio, says Brian Trzcinski, director of business development market with MassMutual Life Insurance Company. "As a 401 (k) or IRA, cash value of a whole life insurance policy grows tax-deferred basis, meaning you do not have to pay taxes every year any reach," he said. "Liquidation of assets of investment, however, will result in capital gain tax, and distributions are taxed as ordinary income. Can access the cash value of life insurance without generating any income tax liability. Dividend Policy and partial surrender can be accepted on the basis of the policy owner's investment contracts without creating taxable income. Additional cash value can be accessed through policy loans, again no income tax consequences. '

Defined Benefit Pension Plan

Growing in popularity, defined benefit pension plan in which the company guarantees a specific monthly benefit at retirement. Benefits are determined by a formula that takes into account the person's age, history of earnings and years of service rather than depending on investment returns. And the plan allows the business owner to keep large amounts of money tax-free, perfect for making saving lost time.

Financial planner Julie Murphy Casserly works with many older business owners who choose to make a cash balance plan, the type of defined benefit pension plans that could potentially allow them to sock away more than $ 200,000 in pre-tax profits each year to retire.

Other defined benefit pension plan that offers tax deductible contribution to the plan (e) 412 (3). Plan "usually allow contributions tax deductible greater than other qualified plans, because of the amount required to fund the purchase of an annuity contract in a relatively short time, 10 to 15 years," says Jeffrey Landers, president of Bedrock Wealth Management, LLC.

412 (e) (3) plans offer guaranteed monthly retirement income based on the claims paying ability of the insurance company issuant. "In retirement, you will have the option to receive a monthly income for the rest of your life or a lower monthly income to continue for the rest of your life and / or your partner," says Landers.

Individual Retirement Accounts

While the IRA usually takes more than a few years only grows substantially, new rules for some IRA proved beneficial for employers who try to capture retirement savings. For example, the IRA September, a business owner can invest up to 25 percent of pre-tax income, with a limit of $ 49,000 in 2010. "The challenge here is that if you have employees, you must do the same for them as you do for yourself," said Casserly.

With the Simple IRA, a business owner can contribute up to $ 11,500 before income tax and corporate matching $ 11,500 in 2010. And elimination of this year Roth IRA income cap, "people will be able to contribute to non-deductible IRA and then convert to a Roth IRA, so as to provide, under current law, non-tax benefits allow for duty-free growth of funds," said Levi.

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