- Types of Tax Incentives
- Maximize Company
- Automatic Savings
- Contribution Limits
- Types of Retirement
- Small Business &
- Asset Allocation
- Educational Savings
If you take a step
back and look at the big economic picture, there are concerns.
Over the past few decades, large parts of the working population were baby
boomers, who had their retirement savings on automatic. Most of the money
went into equities, causing equity values to be somewhat inflated. As the
population ages and money starts flowing out of the market to fund
retirement, children’s college bills or their daughters’ weddings, stock
values may decrease. PE ratios may shrink. Your investment approach will
differ, depending on where you are in your life cycle. Young adults need to
monitor this issue closely, to avoid having their retirement savings used to
cash out the baby boomers, to their detriment.
Wider investment choices
and inexpensive trading tools are needed to prevent mishaps from occurring,
when assets are passed from one generation to another.
Early withdrawals on
pretax IRAs are another issue for investors.
If you need your money early, the government can take approximately half in
taxes. Yes, that’s correct; one half! With these accounts the government has
an informal, but real, fluctuating lien on your assets. Another way of
looking at it is that the government has its hands in your retirement
wallet. Early withdrawals carry excessive penalties, and the higher income
can move you into higher federal and state tax brackets. Advance planning is
required because early withdrawals are expensive.
Next review the regulations on: