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Happy Birthday = Happier Retirement!

What do Jon Bon Jovi, Jon Stewart and Chris Cordaro all have in common? Rock star status? Good sense of humor? New Jersey residents?

All true, but additionally, these gentleman were also all born in 1962, which means they will all be turning 50 in 2012. Why is this important from a financial planning standpoint? Those currently over 50 and those turning 50 in 2012 are allowed to put an additional $5,500 into their qualified retirement plans such as 401k’s and 403b’s. This is on top of the $17,000 elective deferral they would be able to put away at any age prior to 70 ½.

If your plan is to maximize retirement savings and take advantage of tax deferred growth, you don’t want to overlook this birthday gift that the IRS allows at the half-century mark. Even if you are ineligible to contribute to an employer-sponsored plan, you may be allowed to make a catch-up contribution of $1,000 to your traditional or ROTH IRAs. While catch-up contributions to qualified plans have increased over the years since they were introduced back in 2001, even if you assume the additional contribution of $5,500 stays the same over the next 15 years and you retire at 65, with a 7% return you’d have an additional $138,000 in your plan balance – not to mention all the savings in taxes along the way.

Tax laws change and eligibility rules for different plans vary, so talk to your accountant as well as your financial advisor when considering catch-up contributions to your retirement savings.

 

Important Disclosure Information

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request. This discussion is not a substitute for personalized advice from RegentAtlantic. This information is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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