Retirement planning and laws.

Being prepared for retirement is an important part of every American’s economic plan. Whether they are in their 30s or they were born in the 30s. If you are older, the chances are you’ve got some kind of plan in terms of financial stability, and when that’s the case it’s important to know the law that surrounds your estate and savings, that’s where communicating with elder law professionals is definitely advised.

If you or a loved one hasn’t put into action a retirement plan, it’s never too early to get the ball rolling with IRAs, 401(k)s, or a savings account. Having a plan is of utmost importance when it comes to financial stability. Many Americans are underprepared for retirement and according to a 2015 Federal Accountability Office study cited in a Forbes article by Peter Fisher, only about half of households 55 and older have retirement savings plans in place. This is an unfortunate statistic, as one can never be sure when their income might suddenly decrease or disappear. Putting excessive amounts of money in stocks or investing in cryptocurrencies like Bitcoin are ill-advised when it comes to such an important pillar of your financial stability—talk to a lawyer, talk to an accountant, make sure you are secure now and will be well into the future. One form of saving that many financial experts recommend is investing in a Roth IRA, which allows you to pay taxes on investments upfront and grow it over time with no additional taxation on gains. Investors more often than not earn more spendable income from investing in Roth IRAs over a traditional IRA because of these tax laws.

Know the law.

The Employee Retirement Income Security Act of 1974 (ERISA) is a Federal law that establishes standards for private retirement plans. It makes sure that if your employer offers a retirement plan for employees you (as an employee) must be allowed to become a participant. These plans differ greatly from industry to industry, but knowing which plans are available to you is important. ERISA also requires accountability of plan fiduciaries. A fiduciary is anyone who exercises authority over control of retirement asset management or provides investment advice to retirement plans. If fiduciaries do not follow the principles of conduct laid forth by this and other laws, they can and should be held accountable for restoring losses to your retirement plan. Again, speaking to a lawyer is always a good idea when dealing with issues pertaining to potential negligence from a fiduciary or anyone involved with your retirement or asset protection.

Know how to withdraw your money.

When you are retired and need to use your hard earned money that you have been saving up (hopefully for the duration of your career) there are some things that you should keep in mind. One of those things is that, if you have a traditional IRA through personal or professional means, there are required minimum distributions (RMDs) that take place annual by April first of the year after you turn 70 ½ and December 31st in subsequent years. If you fail to make on-time RMDs a 50% tax will be thrown at your withdrawal. When you are setting up RMDs be in mind of it changing from year to year, this is because it’s determined by your age, account balance, and other factors.

When you’re withdrawing money from accounts you set up for retirement, it’s smart to start with withdrawing from taxable retirement accounts and leave your Roth IRAs alone for as long as is possible for you and your situation. You won’t have to take RMDs from Roth IRAs and they accrue better interest that can be taken out free of taxation in the future. The law and best practices related to withdrawal of retirement funds can be tricky, talk to a financial expert or lawyer about what your first or next move should be.

We’re here for you!

Stay protected as you age, know the law, and make sure you and your loved ones are prepared for whatever the future brings. The lawyers at Rheinhardt and Bray have the knowledge and expertise to ensure your assets will be protected and you are following the law to best take advantage of your money and estate for the rest of your life.



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