Saving for retirement and planning for the best senior living service is one of the most important financial goals that we need to achieve in our lifetime. It’s also one of the most challenging. With the right advice from an estate planning attorney, however, the right savings plan, and good planning, we can be certain we will retire a “financially free” woman.
How Does a “Financially Free” Woman Save for Retirement?
1. Use a Roth IRA. With the proper planning, any working person can contribute up to the annual limit of $5,500 a year to a Roth IRA. It’s an excellent savings vehicle. It is not a 401(k) or 403(b) plan, so you are not required to contribute to it. A Roth IRA is designed to help working people with retirement plans. It is not designed to be a money-losing retirement plan. 2. Use a Traditional IRA. The following steps will help a woman save money by using her traditional IRA (or by using her Roth IRA): (a) Start by contributing the first $5,500 of earnings from the last two years of your employment. Then make contributions to the rest of the balance over the next 5 years, with the balance reaching $53,500 by the time you are 59 1/2. (You can use the earnings from your last year of employment as the basis for the contribution.) (b) You can also contribute after-tax dollars to your traditional IRA, as long as you have less than $10,000 in the account. This is important, since the money in your account can’t go to your traditional IRA. You can’t do this without the approval of your tax advisor, and you should consider the rules on traditional IRAs and Roth IRAs to determine whether or not this is the best strategy for you. (c) You can also contribute after-tax dollars to a Roth IRA and be allowed to roll that money into a traditional IRA. The difference between a traditional IRA and a Roth IRA is that the money in a traditional IRA cannot be rolled into a Roth IRA. However, if you don’t need the money in a traditional IRA, you can contribute after-tax dollars to a Roth IRA.
2. You can contribute after-tax dollars to a Roth IRA, but you can’t take advantage of the retirement income tax credit. You can make after-tax dollars contribution to a Roth IRA and take the same amount of money out of a traditional IRA.
3. After-tax dollars cannot be added to a Roth IRA.
4. When you contribute to a Roth IRA, the IRS automatically converts the after-tax dollars you make to Roth IRAs. Your after-tax dollars cannot be withdrawn from the Roth IRA until you take your tax-deductible contributions, even though you have the same amount of after-tax dollars available in your Roth IRA. You can withdraw the after-tax dollars in any of the following ways: a. You can withdraw your after-tax dollars in the following year: (1) after you have taken the money out of your IRA, (2) before you take the money out of your IRA and (3) any time after your contribution is converted into a Roth IRA, including, but not limited to, a contribution for the following year and after that year, (4) before your contribution is converted into a Roth IRA and (5) any time after your contribution is converted into a Roth IRA.