Retirement Planning

The Sunrise Wealth Advisors Difference

Sunrise Wealth Advisors have over 75 years of experience from beneficiary payouts to trust establishments and 401(k) rollovers. Our mission is simple; we aim to provide experienced financial planning and objective financial guidance for those seeking assistance in these areas. You can rest assured knowing we have your best interest in mind because we believe the client’s best interest should always come first and never be compromised. Together, we will work with you as a team to provide the financial advice you need to turn your current financial situation into your dream retirement plans.

What is Retirement Planning

Retirement planning builds toward a future of financial freedom, security, and a comfortable and stress-free lifestyle. Retirement planning helps prepare you for living after your working years have ended. This is contingent on many factors such as the age you would like to retire, the amount of savings you will need to cover your expenses in retirement, and the sources of that income. Overall, retirement planning is planning your finances for the period of life after you stop working. This process takes time, thought, and assistance because a one-size plan does not fit all financial scenarios. Many begin retirement planning by saving and investing money through the options available with their employer and personal investments. Many employers offer retirement planning options such as pension plans, 401(K) plans, or a combination of various plans. With these options, you can choose to invest on your own or with the help of financial planners.

Types of Retirement Accounts

Saving and investing for retirement isn’t always so straightforward. Let’s begin with where and how you can save. There are many types of retirement plans, and it can be confusing to decide which account is right for you. Here are some of the different kinds of retirement plans and accounts

401(k) Plans

If offered at your workplace, a 401(K) is available for employees. The IRS allows you to contribute pre-tax income toward your retirement. Your employer may match a certain portion of your contributions. This money is then deducted from your taxable income.

Solo 401(k) Plans

A solo 401(k) is designed for an individual business owner without any workers. If you are self-employed without employees, you may be eligible for this retirement account which offers many of the same benefits that a traditional 401(k) offers with a few key differences.

403(b)

A 403(b) plan is created for tax-exempt organizations. Earnings will grow tax-free until you withdraw them. Distributions made are also considered taxable income.

IRA

An IRA or individual retirement account is solely available to those with earned income. Similar to a 401(k), you will receive a tax deduction for the money you put into the IRA. When funds are withdrawn, they will be considered taxable income. If you withdraw money from an IRA before age 59½, you are usually subject to an early withdrawal penalty of 10%.

Roth IRA

Money in a Roth IRA grows tax-free in the account, and no income tax will be due on withdrawals made in retirement. However, the amount contributed can also not exceed the amount you earned. A Roth IRA does not require that you take distributions at a specific age.

Self-directed IRA

A self-directed IRA differs from traditional IRAs in that they allow you to place funds into alternative assets such as real estate.

Simple IRA

Simple IRAs are for small businesses with 100 people or less. Like a 401(k), the amount you contribute will be deducted from your taxable income, but they will be subject to taxes when you withdraw funds in retirement.

The Benefits of Planning for Retirement

Retirement planning is an essential part of your financial planning. Planning for retirement ensures that you set aside the right amount of funds to create a steady and diversified income stream to support you in your retirement. Retirement planning can have many different benefits for you individually. One benefit that is commonly overlooked is tax diversification. This involves establishing money in various account types from taxable to tax-free and tax-deferred. These different accounts allow you to spread out your money rather than putting all your eggs in one basket, which creates room for you to minimize your tax liability in retirement when you may be in a different tax bracket. Retirement planning can create cost-efficiencies as well. Many of the insurance policies you need can be acquired at a much lower premium when younger and in good health rather than waiting until retirement when rates may be higher, or coverage may be denied because of age or medical condition.

Key Takeaways

It’s never too early to invest in your financial future. With all the expenses of life, it may be hard to think about retirement planning, but every year wasted not planning for retirement can be a setback for your retirement future. There are many decisions to make and factors to consider when planning for your retirement, and Sunrise Wealth Advisors are here to help you navigate retirement planning so that you can have the best retirement for you. The right time to plan is now. Don’t let another day go by that you could be saving towards your future retirement goals.

No system or financial planning strategy can guarantee future results.