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If your retirement funds are substantial you would probably also be wise to work with an estate planner in conjunction with your account and attorney.
Obviously as you get closer to retirement your investment strategies should change. By the same case once you are retired, where you have your funds and how you generate income and where you get money for every day expenses should change substantially. Unfortunately we regularly hear how unscrupulous con-men (and women) have separated seniors from their hard earned savings. We have also heard that if it sounds too good to be true it usually is a bad investment, but far too few seniors take this advice to heart.
Here is an excellent U.S. Government site to assist seniors in investing.
investor.gov/seniors-care-package/
This site includes information to make it easy for seniors to learn about savings and investing wisely. Information includes:
- Investing wisely (for seniors and caretakers)
- How to pick a financial professional
- Evaluating your retirement options
- Questions you should ask about your investments
- Questions you should ask people who sell investments or provide investment advice
- Variable annuities: What you should know
Early withdrawal generally should be a last resort
The federal tax penalty for taking money out of a 401(k) or IRA before age 59 ½ is 10% of the amount of the distribution. That penalty goes on top of any tax owed on the amount withdrawn. State taxes and penalties may also apply. For example if you were to take $1000 from your retirement account in additional to your federal tax you would have a federal penalty of $100 plus possible state taxes and penalties. Be aware there are certain exceptions that would allow you to avoid the penalty but not the tax. It is important to talk with a CPA or accounting professional if you plan to make an early withdrawal. |
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Retirement Income Calculator
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This tool has been designed by T. Rowe Price to help you determine:
- How much you may have available to spend each month in retirement
- The likelihood your savings will last throughout your retirement
- Options to make up for potential shortfalls
Simply share some information about your retirement needs and investments — it should take about 10 minutes. They will run 1,000 market simulations to evaluate your chances of success and offer some tips to help improve your situation. http://www3.troweprice.com/ric/ric/public/ric.do. |
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