How to Tune-Up Your Retirement Plan

6:08 pm Retirement Planning

eggs in basket How to Tune Up Your Retirement Plan To keep your vehicle running smoothly, you need to perform regular tune-ups and due to the instability of the financial markets in recent years, the same is true for many retirement plans.  Here are some tips on performing a retirement plan tune-up:

Tweak your 401(k) contribution – in January, the maximum allowable contribution increased to $17,500 for those under the age of 50 and $23,000 to those over 50.  Making the maximum contribution to your 401(k) will help offset other losses.

Re-balance for risk – evaluate your investments to make sure you haven’t inadvertently taken on more risk that you’d like, and make the proper adjustments accordingly.

Evaluate a Roth IRA – since Roth funds grow tax-free, a Roth IRA can make sense if you are currently investing after-tax income in an IRA.  Income eligibility limits have increased this year to a maximum of $112,000 for individuals and $178,000 for couples.

Take the Required Minimum Distribution (RMD) – if you have retirement accounts that are not Roth IRAs and are over age 70 ½, you must take the required minimum distribution (RMD) by the end of each year or face a potential 50 percent tax on what should have withdrawn.

Check liquidity levels – be sure you have adequate liquidity so you don’t have to sell assets in a depressed market.

If your retirement plan could use a tune-up, contact our Orange County law firm for assistance.

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