Retirement Realities

We are all living longer: Fabulous. But increased longevity can pose a quandary for those who either did not save for retirement or are worried about outliving their money (i.e. not having saved enough). Not to worry: One way to save for retirement and to ensure that your money lasts as long as you do is to invest in an annuity. What is more, wrapping that annuity into an IRA (traditional or Roth) will further enhance the already generous tax treatment, which the Federal and State authorities afford to annuities. Read More.

Unprecedented numbers of Americans are entering the homestretch toward retirement. Born in 1946, the first of approximately 75 million “Baby Boomers” turned 60 last year. Even the youngest of the generation, who are “40-something”, are thinking about retirement. Although today”s boomers have accumulated more wealth than previous generations, they still wonder: Have we saved enough? How much is enough? How do I set a budget for my years as a “pensioner”.

Other reasons for concern stem from alarming issues regarding Social Security retirement pensions. Even as the government began imposing ever-increasing tax burdens upon such benefits, it also increased not only the full retirement age for many Baby Boomers and their descendants, but also the maximum income level from which FICA taxes are being extracted. And still there is no guarantee that Social Security will protect future generations. It is reasonably certain, however, that significant limitations will continue.

There can be but little doubt, therefore, that Americans must increasingly rely upon personal retirement savings and budgeting plans. There is no choice but to use those tax-deferred and tax-free retirement savings tools that the government has provided to the public: IRAs, 401(k) plans, SEP and SIMPLE plans; and Annuities.

Funding the dream: How much is enough? Answer: Click Here

Plan for Retirement

An individual Retirement Account (IRA) is one of the best and easiest ways to save for the future. IRA”s have been greatly enhanced by new legislation that brought significant changes to Traditional and Roth IRA”s.

Depending on the type of IRA one chooses, the interest earned may either be tax-deferred or tax free and the contributions made may even be tax-deductible (Consult your tax advisor to determine your opportunities). The effective growth rate (up to 5.30%) of a 3.25% tax-deferred or tax-free IRA, Roth IRA or annuity, as offered by Providence, guarantees a rapid accumulation and compounding of savings. The absence of any loads (administrative fees or charges) makes sure that every dollar invested with Providence works for the client.

Traditional IRA’s

A traditional IRA allows an investor to deduct all or part of his IRA pension contribution directly from taxable income. No taxes need to be paid on the interest earned on an IRA, until the client withdraws funds. Penalties may be imposed for early withdrawals (before age 59.5); however, tuition costs, long-term disabilities, a first time home purchase, and/or catastrophic medical expenses qualify depositors for early uses of funds.

Enhancements made to the Traditional IRA also include increased contribution limits and an increase in the Adjusted Gross Income levels for active participants of employer sponsored retirement plans.

Roth IRA’s

Eligible taxpayers can make nondeductible contributions to a Roth IRA which features tax-free withdrawals. Contribution limits for IRA”s in this tax years are $5,500, or $6,500 for participants age 50 and older. Penalty-free early withdrawals are available for tuition and qualified first-time home purchases.

Leaving Your Job? Providence arranges and accepts 401k Rollovers.

For those who are leaving or retiring from a job, choosing what to do with an IRA or 401 (k) retirement plan payout is critical. Current IRS laws make the choices more complicated and critical: Upon leaving a job with a 401k or similar retirement savings plan, a 20% federal tax withholding requirement (or even a penalty) is levied against any payout not transferred into an IRA or a new employer”s pension plan. Happily, Providence can arrange for a tax and penalty free rollover of its clients monies.

Annuities Offer Supplemental Tax-deferred Savings Opportunities

Those who do not qualify for an IRA, or who wish to enhance retirement savings with additional monies, should open a Providence Annuity. This will save on taxes and still earn our high current rate of 3.25%. Annuity plans supplement IRA and other pension savings. The federally approved tax deferred features of annuities afford major investment advantage for the young and for retired pensioners.




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