Give Yourself the Gift of Retirement Planning This Holiday Season

The holidays are here again. It’s that time of year to shop for gifts, plan parties and spend time with family and friends. If you’re like most people, you’re busy trying to find the perfect gift for your spouse, children, parents or other loved ones.

But have you considered a gift for yourself? It may be tempting to go out and buy yourself the latest gadget. However, consider another item that could pay dividends for years and decades to come: a review and adjustment of your retirement strategy.

According to a Gallup survey, 54 percent of Americans are worried about being able to afford retirement.1 If you’re among that group, now may be the time to take action. The holidays may not traditionally be the season of financial planning, but the year-end represents an ideal time to make changes and take action.

Give yourself the gift of a solid retirement strategy this holiday season. A financial professional can help you conduct a full review and recommend possible changes. Below are a few steps to consider:

 

Year-End IRA Contributions

 

Do you use an IRA to save for retirement? It’s a powerful savings tools because IRAs offer a variety of tax benefits. In a traditional IRA, you may be able to make tax-deductible contributions. Your growth is also tax-deferred until you take distributions. In a Roth IRA, you don’t get deductions for your contributions, but you get tax-deferred growth and tax-free withdrawals after age 59½.

In 2018 you can contribute up to $5,500 to either a traditional or a Roth IRA. That number increases to $6,500 if you are age 50 or older. If you haven’t yet hit those limits, see if you can make another contribution soon. You can actually contribute all the way until April 15, 2019, and still count it as a 2018 contribution.2

 

Increased 401(k) Contributions in 2019

 

Are you one of the millions of Americans using a 401(k) plan to save for retirement? If so, you can put more money away in 2019. The contribution limit for 401(k) and 403(b) plans is increasing to $19,000 next year. If you’re age 50 or older, you can contribute an additional $6,000 in catch-up contributions.3

Granted, $19,000 may be a significant amount to contribute to your retirement plan. However, even a modest increase can have big returns. Consider that your contributions will grow tax-deferred over years and possibly decades. An increased contribution could also lead to increased matching contributions from your employer.

 

Retirement Income Estimate

 

You may know how much you have in savings for retirement, but do you know how much income those savings will produce? If not, give yourself a gift this holiday season and meet with a financial professional to develop a retirement income estimate.

A financial professional can project your potential income from Social Security, a pension, savings or other sources. That can help you determine whether you’re on the right path or if you need to make adjustments.

Ready to retake control of your retirement strategy this holiday season? Let’s talk about it. Contact us today at Sage Financial Partners. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

 

1https://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx

2https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

3https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000

 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, no representation is made as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice, or specific advice for your situation. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18279 – 2018/11/28

Ask These 3 Questions to Develop Your Charitable Giving Strategy

The holiday season is the giving season for many Americans. According to a recent survey, 63 percent of all Americans donate to charity in the final two weeks of the year. The leading recipients of those donations are charities related to church, poverty and children’s issues.1

Charitable donations can take many forms. It could be a cash donation to your favorite organization. You might donate old clothes, furniture or other items. Or perhaps you prefer to contribute your time.

Of course, you may also be looking for ways to make a substantial charitable impact. You may have significant assets or insurance that you would like to use to create a lasting legacy. Before you start writing checks, it’s helpful to develop a strategy. That way you can be sure your donations are used in a way that aligns with your wishes, and you can meet all of your objectives.

A financial professional can help you create your giving strategy. Below are a few questions to get you started. After developing a plan, you can then identify the best tools and methods for supporting your favorite cause.

 

What kind of impact do you want your donation to have?

 

This question is often the best starting point for any charitable strategy. You may know what cause you want to support and possibly even which specific organization, but do you know what will happen to the money after you make your donation?

It may be helpful to have discussions with the charity before you make your gift. Find out how the money will be used. Research the charity’s efficiency to see how much is spent on overhead, salaries and administrative costs. Find out if you can specifically direct how you want your money to be used.

Also consider when you want to make the donation. Do you want to see how the money is used while you are still alive? Or would you like to leave the donation as a legacy after you pass away? If the latter is the case, you may have more options available, such as using life insurance or a trust to facilitate your donation.

 

What are the tax considerations?

 

Many people donate to charity because they are passionate about helping others. However, it doesn’t hurt that you can also realize tax benefits by making a charitable donation.

The specific tax benefits depend on your type of donation. For example, you can usually deduct charitable donations on your tax return. However, there is a cap on the amount you can deduct each year. You may be able to reduce gains taxes on certain assets by donating to charity or using a charitable remainder trust. A tax or financial professional can help you determine which types of donations would provide the greatest tax benefit.

 

Are there any existing assets you could give?

 

Many people think the only way to donate to charity is by writing a check. That’s often the simplest approach, but it’s not the only one. In fact, you may already own assets that could be used as a charitable donation.

As mentioned, if you have assets that have appreciated significantly in value, you might consider donating them to charity through the use of a trust. The trust can sell the assets and avoid gains taxes, then pass the funds on to the charity upon your death.

You can donate permanent life insurance to charity. If you have a policy that you no longer need, consider making a charity the new owner and beneficiary. You get a tax deduction for your paid premiums, and the charity gets the death benefit after you pass away.

 

Ready to develop your charitable strategy? Let’s talk about it. Contact us today at Sage Financial Partners. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

 

1https://www.worldvision.org/about-us/media-center/survey-majority-americans-donate-charity-end-december

 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, no representation is made as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice, or specific advice for your situation. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18274 – 2018/11/27