How to build the right retirement strategy
Everyone wants a clear path to a comfortable retirement. As a Nurse Anesthetist security and enjoyment in your golden years requires a game plan customized to your needs.
Unfortunately, creating a solid retirement strategy takes the time that we may not have. It requires tactics that seem designed to confuse and frustrate us, and that’s wrong.
You shouldn’t have to overthink your retirement plans. Your retirement strategy should be comprehensive and simple to implement.
To develop a clear retirement strategy, you must focus on three essential elements of wealth management:
Investing throughout your career in preparation for a bright future.
Maximizing growth on every investment.
Reducing your tax burden so that you can keep what you’ve saved.
This approach identifies the amount of money you will need to save and determines the rate of growth that your savings will need to have in order to retire comfortably. It will also help you determine the right tactics for protecting those assets from extensive and unnecessary taxation.
And a savvy tax plan is especially important.
As a Nurse Anesthetist, you have the potential to become a high-income earner. For someone in your position, asset protection is as vital as saving.
A financial advisor will help you do this by creating a customized saving and retirement strategy to maximize your ability to keep what you’ve earned. So how do you start building this strategy?
First, know the saving retirement tools available to you.
There are several retirement savings tools available to you, each with their own requirements and benefits.
You’re probably already familiar with these tools, but here’s a breakdown:
A retirement savings plan sponsored by your employer. You may also be eligible for an employer match to your contributions. Instead of a 401k, you may be eligible for a 403b plan which is similar in nature.
This tool allows you to invest and save a portion of your paycheck before taxes. 401(k)s have a higher limit than IRAs (see below) and you can accelerate your deposits after age 50. Your contributions grow tax-deferred.
Taxes are only paid out once 401(k) assets start being liquidated, which can start after age 59 1/2 without the 10% penalty tax. You may or may not be in a lower tax bracket at that time. Careful consideration must be made when determining whether you set aside funds on a tax-deferred basis or utilize the ROTH option which is an after-tax deposit but allows you tax-FREE withdrawals at retirement.
Individual Retirement Accounts (IRAs) are retirement savings plans that can be established by an individual. While the contribution limit is lower than a 401(k), the investor has the flexibility to invest where they want.
Contributions to an IRA are tax-deductible, with taxes on the principal and accumulated interest is deferred until the IRA is liquidated during retirement. Like the 401(k), you will have to calculate your projected retirement income and anticipate paying taxes on the IRA savings you elect to incorporate into that income.
Simplified Employee Pension Individual Retirement Arrangements (SEP IRAs) is a modification of the traditional IRA and allows business owners to provide retirement benefits to their employees as well as themselves. Functioning like a traditional IRA, your taxes on these savings will be deferred until retirement.
Unlike IRAs and SEP IRAs, the Roth IRA allows you to make contributions to a retirement savings plan using the money you’ve already paid taxes on. In other words, the taxes are not deferred.
The benefit of a Roth IRA is that your assets have the potential to grow tax-free and you will not pay taxes on the principal investment or its interest when you withdraw from it during retirement.
Understanding the general function of these retirement savings avenues helps you and your advisor develop a saving strategy suited to your needs.
A retirement plan is not a one-size-fits-all thing. Using a financial and retirement planner will help you utilize each one of these approaches to your best advantage.
To find out how CRNA Financial and Retirement planning can help you, book a consultation.
Build for the future with a clear game plan. Don’t let confusion get in the way of a great retirement.