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It is never too early to plan for your retirement. This section includes a number of features to assist you with your retirement questions. For a more comprehensive look at your retirement planning needs, please call this office.

Many employers offer what are commonly referred to as 401(k) plans, named after the tax code section that created the plans. These plans allow employees to defer part of their earnings for retirement. Some employers offer matching contributions that increase the attractiveness of the programs.The value of 401(k) plans is enhanced even further by increasing the general contribution limit and allowing individuals over age 50 to make additional contributions. Where an employer’s plan permi...

Taxpayers who have reached the age of 70½ and have qualified retirement plans are generally required to take minimum distributions from those plans annually. Quite frequently, taxpayers have multiple IRA accounts in addition to one or more types of qualified plans.This gives rise to a commonly asked question, "Must I take a distribution from each individual account?" For purposes of the annual required minimum distribution, a separate distribution must be taken from each type of plan. ...

The decline in the stock market has adversely affected the value of taxpayer’s retirement investments. This decline in value of retirement accounts has uniquely affected taxpayers who have taken early retirement.Generally, taxpayers who withdraw from their pension plans including IRAs before reaching age 59 ½ are subject to the 10% early withdrawal penalty. However, taxpayers who retire can avoid that penalty by using a special exception that requires that they take substantially...

This is a nonrefundable income tax credit for 50% of the administrative and retirement-education expenses for any small business (less than 100 employees) that adopts a new qualified defined benefit or defined contribution plan (including a Code Sec. 401(k) plan), SIMPLE plan, or simplified employee pension ("SEP"). The credit is limited to 50% of the first $1,000 of administrative and employee retirement-education expenses in each of the first three years of the plan.

You may encounter certain financial situations making it necessary to withdraw funds from your IRA account. Funds withdrawn from a Traditional IRA are taxed at the regular income tax rates AND are subject to a 10% early withdrawal penalty if you are under 59-1/2 years of age at the time of the withdrawal. However, in addition to death, there are exceptions to this 10% penalty when you meet certain conditions or the funds withdrawn are used to pay certain qualified expenses. But remember even ...

The long-term benefits of tax-free accumulation provided by Roth IRAs are hard to ignore. Parents can do their children a real service by encouraging them to establish a Roth IRA at the first opportunity. A Roth IRA, left untouched until retirement, will ensure that your child has a substantial nest egg.Take for example a youngster, age 17, who contributes $2,000 to a Roth IRA and allows that single deposit to accumulate untouched until retirement at age 65. At a 8% annual growth, the Roth IR...

The Saver's Credit provides a nonrefundable tax credit for contributions made by eligible, low income taxpayers to IRAs and qualified elective income deferrals. The plan provides incentives for lower income individuals to save for their retirement through available qualified plans. To qualify, the taxpayer must have reached the age of 18 by the close of the year and cannot be a full-time student or dependent of another. The credit ranges from 10% to 50% of the first $2,000 contributed by each...

Tax laws provide for plans that allow self-employed individuals to establish retirement plans for themselves and their employees, if they have any. Those most frequently encountered are the SEP (Simplified Employee Pension) and Keogh Profit Sharing Plans. Even though they are not IRAs, the SEP plans utilize an IRA account as the depository for the SEP plan contribution, thus minimizing the administration requirements of the employer. The compensation limits for both of these plans is generall...

Withdrawals from a Roth IRA are tax-free if the funds have met the five year aging requirement and the following criteria is met.  The account owner is at least 59-1/2, or The funds are used for a qualified first-time home purchase (up to $10,000), or The accountholder becomes disabled or dies. Suppose a taxpayer does not meet the requirements for a tax-free withdrawal. The funds contributed to the IRA are always tax-free, because taxes were paid on those funds before ...

Your age at the time you make a taxable withdrawal from your Traditional IRA account can make a big difference in the amount of tax you will pay. Generally, there are three periods within your lifetime where different tax rules apply: Under Age 59½ - If you withdraw the IRA funds before you reach age 59 ½, you will pay tax and a 10% early withdrawal penalty unless you can avoid the penalty through one of the several exceptions provided in the tax law. Note: Some states also ...

The IRS does not allow IRA owners to keep funds in a Traditional IRA indefinitely. Eventually, assets must be distributed and taxes paid. If there are no distributions, or if the distributions are not large enough, the IRA owner may have to pay a 50% penalty on the amount not distributed as required. Generally, distribution begins in the year the IRA owner attains the age of 70½.BEGINNING DATE REQUIREMENT IRA owners must take at least a minimum amount from their IRA each year, starting with ...

For those who annually contribute to their IRA account and wish they could contribute more, there is good news. The annual contribution limit is inflation adjusted each year and is slowly increasing. Taxpayers 50 and older are allowed larger contributions through so-called “make-up” provisions (see table below).The contribution limit for Traditional IRA Accounts for taxpayers that do not have a qualified plan with their employer is as follows. IRA Contribution Limits Ye...

When one spouse works and the other does not, tax law allows the non-working spouse to base their contribution to an IRA on the income of the working spouse. This tax benefit is frequently overlooked when spouses have been working and basing their individual contributions on their own income for years, retire and fail to recognize the opportunity to make IRA contributions for a retired spouse. Even if the working spouse has a pension plan at work and his or her income precludes him or her fro...