The turn of the calendar from one year to the next often brings with it New Year's resolutions. In addition to improved health, making better financial decisions often tops people’s lists.
The transition from working to retirement impacts just about every facet of a person’s life — yes, even taxes. So, as plan participants prepare to embark on their post-career lives, it’s reasonable to expect them to have new questions about tax implications of retirement account withdrawals.
After a lifetime spent saving, investing, and diversification, with retirement, the participant’s goal may not have changed, but their strategy will. They most likely still aim to achieve a financially secure retirement; but now, they face the challenge of transforming savings and investments into an income stream.
Stress testing can be a powerful tool for financial professionals to personalize their approach to retirement plan service. But retirement plan professionals are far from alone in benefiting from stress testing.
The transition from working to retirement impacts just about every facet of a person’s life — yes, even taxes. So, as plan participants prepare to embark on their post-career lives, it’s reasonable to expect them to have new questions about tax implications of retirement account withdrawals.
After a lifetime spent saving, investing, and diversification, with retirement, the participant’s goal may not have changed, but their strategy will. They most likely still aim to achieve a financially secure retirement; but now, they face the challenge of transforming savings and investments into an income stream.
How many retirement plan rules saw changes in the past year? How many are expected to go into effect over the next year or two? Contribution limits, required minimum distributions, catch-up contributions, income limits, tax rates — the retirement planning landscape is always in flux.
Retirement Savings Contributions Credit, better known as Saver’s Credit, was developed to encourage workers with low and moderate incomes to save for retirement. Few taxpayers actually take advantage of the program, however, with only 5.7% claiming the credit, according to the latest statistics.1
Even the most seasoned investors can sometimes seem to forget that markets move in both directions: up and down. Volatility can spark irrational, fear-driven behaviors that can cause people to pull their investments out, often at a low point, instead of waiting it out for a chance to recoup their losses.
Keeping plan participants focused on long-term retirement strategies to counterbalance market volatility and/or financial anxiety presents both challenges and opportunities.
To that end, knowledge helps empower people to remain confident in the financial decisions they make for their future, regardless of economic climate. The Top 5 Blogs of 2023 may have valuable information for you to review, use in your practice, and share with plan participants:
It’s not hard to see the need for a fresh approach to helping employees save for retirement amid new and emerging challenges. Inconsistent wage growth, recent periods of high inflation and market volatility are making it tough to succeed with only traditional approaches.
