First, don’t stop with the retirement plan selected. It’s only one element of a complete, solid financial plan. Further, your financial plan needs to be unique for you and the ones you want to include – family, business, etc. (hint: as long as you’re working on a retirement plan, work on your financial plan
with an accounting professional.) Our firm works with qualified financial planners.

A solid financial plan also includes:

• Suitable investments
• Tax planning
• Estate planning
• Proper insurance
• Disability protection

There may be other facets for unique situations or even situations where all 6 are not applicable, but the above considerations are elementary, fundamental aspects of any Financial Plan.

Flexible, even newly constructed Retirement Plans are especially important for people in their 50s and older. Sources at various seminars I attend state that the majority of people in this age bracket either have no plan or do not have sufficient funds set aside for their plan. But the good news is that added encouragement is here from the federal government. It doesn’t matter when you get to the finish line as long as you get there.

Retirement plans are important for all people and only one facet of a complete financial plan. Individual Retirement Accounts (Traditional IRA & Roth IRA) have a maximum contribution of $4,000 through 2007. In 2008, the maximum increases to $5,000, and in 2009, it is subject to an annual inflation adjustment.  For people over 50 years old, there is an additional contribution of $1,000 available.

Even if you can’t qualify for a regular IRA , a Roth maybe available. A Roth IRA doesn’t have to be withdrawn, a regular IRA does, provided one meets the 70.5 year old rule – there are stringent penalties, if not followed correctly.

For individuals who are not incorporated, the government has given its okay to 401(K) type plans for one-owner entities.

In order to have an IRA, Regular or Roth, all one needs is earnings – the good part is it’s not just W-2 earnings. So, if you have a side business you can use that to set up an IRA. Further, if contributions are made at the beginning of the year, instead of the end, a greater amount of earnings are tax deferred (tax free)
and this amount is compounded over the years.

Normally, if one spouse is covered at work, the other can’t have a regular IRA, but this is not always the case. A Roth IRA is available even if you, your spouse, or both have a regular IRA. Contributions are limited if Adjusted Gross Income is at a certain level:

Married = $150,000 to $160,000Single = $95,000 to $110,000In a Roth IRA, the contribution is not deductible, as with a regular IRA. Also, withdrawals are not ever mandatory. The withdrawals and earnings are tax free, not tax deferred, as with a regular IRA. Once again, all you need is earnings.

A defined benefit plan may be set up at one’s company. Actuarial calculations are made to state the proper contributions. Defined benefit plans can close the gap profoundly. People in their 50s and older can make up for lost ground in a big way. One can get the same benefits as a pension in their 30s; since there are less years, a greater amount can be contributed and a greater tax deduction achieved.

If you don’t have a solid financial or retirement plan , talk to your CPA and financial planner TODAY. I am more than happy to sit down with you and your financial planner to discuss your options. If you do not have a financial planner I can supply you with recommendations.