Last Week’s Question of the Week: Does a Front-End Load fund charge a fee at the beginning when you first invest, or at the end?
ANSWER: A front-end load fund charges the fees at the beginning when you first invest.
HOST: As we finish up 2019, what can we do in the way of getting a head start in our retirement planning into the New Year!
KLAAS FINANCIAL: Yes, we all love new beginnings! And we are all about goals, and making changes when it comes to our retirement planning.
STEP 1: Assess where you are at CURRENTLY in terms of the following:
- Debt – how much? How expensive is the debt? Budget?
- Savings – how much is too much or too little?
- Targeted Retirement Date- time is your friend, but will you have to work longer than you expect?
- How much do I want to retire with? What is the dollar amount you feel you will need to be comfortable in retirement? Remember a 4% pull from your investments should be anticipated.
HOST: What is the average retirement age today?
KLAAS FINANCIAL: Today, the average person retires at age 63, and enjoys an 18-year average length of retirement. The average amount of retirement savings of a 55-year-old in the U.S. today is $374,000. Even with that high amount of retiring savings for the average person, it should be noted that 36% of Americans over 65 rely completely on Social Security, and 38% of Americans have put nothing away.
STEP 2: So, what should you be doing NOW?
- Look at your retirement accounts, and make sure that you are attempting to maximize your retirement contributions every year. Divide by the amount of pay periods and make sure that you have enough put into your plan on a monthly basis.
- Remember you can add money into spousal IRA’s for non-working spouses. You have until April 15, 2019, to add $$ into your IRA’s. $5500/$6500 limits with earned income.
- Find out if you have a ROTH 401k option through your employer for the NEW YEAR!
- Make sure you are currently taking advantage of a full match by your employer.
HOST: How do I know what investments to choose in my retirement accounts? Does it really matter?
KLAAS FINANCIAL: Yes, review your retirement plan investment choices can make a big difference. Look for advice from a qualified financial planner who can steer you towards a mix of investments proper for your age and your current financial situation.
HOST: How important is it to take action with these things today?
KLAAS FINANCIAL: Well, the sooner we are serious about this, the more retirement options we will actually have. Discuss tax-deferral opportunities; $$ go further invested sooner than later; rule of 72.
Sign onto SSA.gov to find out TODAY what your benefit will be.
HOST: What about planning for a retirement date?
KLAAS FINANCIAL: Yes, another good planning item in the New Year would be to consider two questions:
- What is my Targeted Retirement Date? Remember that time is your friend, the sooner you begin a plan, the better the future rewards. Will you have to work longer than you expect?
- How much do I want to retire with? What is the dollar amount you feel you will need to be comfortable in retirement? Remember a 4% pull from your investments should be anticipated.
- THEN, taking action today can really help. Well, the sooner we are serious about this, the more retirement options you will have — discuss tax-deferral opportunities, dollars go further invested sooner than later; sign onto SSA.gov to find out TODAY what your benefit will be.
HOST: I hear you talk a lot about the idea of ‘Simplify, Consolidating and Diversifying’…
KLAAS FINANCIAL: Yes, that is one of our regular talking points. Our company is in its 43rd year of business and this is something we regularly communicate to our clients.
Look at ASSET allocation and appropriate risk. Talking about getting a handle on old 401k’s & other retirement plans and possible IRA rollovers. Assemble your financial team, with a good quarterback to put you in the driver’s seat for investing, taxes, estate planning etc.
Catch C.J. Klaas and Maleeah Cuevas on Money in Motion every Thursday on Madison's 1310 WIBA from 8:05-8:35am.
