Do you use an individual retirement account to save for retirement? If so, you’re not alone. Americans own a collective 25 million individual retirement accounts, also known as IRAs. According to a 2013 study from the Employee Benefit Research Institute, those IRAs hold nearly $2.5 trillion in assets, making the IRA one of the most popular retirement savings vehicles available.1
There are actually several different types of IRAs available, and each kind offers its own set of unique advantages. It’s not always easy to tell which kind is right for you. If you don’t currently have an IRA, you may be wondering which type is right for you. Even if you do own an IRA, you may be curious as to whether you should use a different type.
If you’re in your 40s or 50s, you may be at a career stage where your income is higher than it’s ever been. It’s common for workers to see sizable increases in compensation as they enter the later stages of their career. Their accumulated experience and knowledge help them take advantage of promotions, raises and new opportunities.
Of course, as your income increases, you may face a dilemma about how to best use that money. If you’re already maximizing your retirement savings, you may be thinking about other goals. One common financial goal is to fund a child’s education. Another is to completely eliminate debt.
There was a time when retirees could count on guaranteed lifetime income from Social Security and an employer pension to fund their golden years. Today’s retirees still enjoy Social Security income, but very few have access to a pension. In 1998 nearly 60 percent of Fortune 500 companies offered a pension. As of 2015 fewer than 20 percent offer one.1
As employers have shifted away from the pension, also known as a defined-benefit plan, many have adopted the 401(k). Known as a defined-contribution plan, a 401(k) allows employees to save for their retirement and may create a reduced financial obligation for employers.
Many baby boomers worry about supporting their adult children. However, it may not be their children who need help. It could be their parents. According to a study from A Place for Mom, 28 percent of Americans are either already caring for their elderly parents or will need to at some point in the future. The same study found that 86 percent of Americans are worried they won’t have the financial stability to do so.1
Americans’ life spans are extending longer than ever, but that longevity can bring big challenges. While living longer is generally viewed as a positive development, it can also lead to an increased need for care and support later in life.
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.