Traditional vs. Roth IRA’s

Perhaps both Traditional and Roth IRA’s can play a part in your retirement plans.

by

Jeffrey P. Kendall, CFP®

IRA’s can be an important tool in your retirement savings belt, and whichever type you choose to open, could have a significant impact on how those accounts might grow, and how you might be taxed.

Per the IRS definition, an Individual Retirement Arrangement, or IRA as we know them, is a tax-favored personal savings account, which allows you to set aside money for retirement.  There are several different types of IRA’s, including traditional IRA’s and Roth IRA’s, which are the two most common.  Traditional IRA’s, created in 1974, are owned by roughly 35.1 million U.S. households.  While Roth IRA’s, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 24.9 million households.¹

Both kinds of IRA’s share many similarities, and yet, each is quite different.  Let's take a closer look.

Street View The Fed and a Look Ahead

LPL Research Chief Investment Strategist John Lynch offers his perspectives on the current challenges facing the markets, though he remains optimistic about U.S. economic growth prospects in 2019.

LPL Research Outlook 2019

FUNDAMENTAL: How to Focus on What Really Matters in the Markets

LPL Research believes the following three themes will be key to the markets:

• Sustaining growth via fiscal policy. We expect the ongoing impact of fiscal stimulus will be readily apparent in 2019 and that policy will continue to play an important role for the economy and financial markets—potentially extending the duration of the current business cycle.

• Creating opportunity amid rising volatility. We believe any bouts of market volatility should be embraced—not feared—by suitable investors as an opportunity to rebalance portfolios toward targeted allocations.

• Fundamentals in focus. Despite the market weakness we saw at the end of 2018, at LPL Research we expect the U.S. economy to grow in 2019 and support gains for stocks. Risks such as trade uncertainty, slowing global growth, and geopolitics do require careful monitoring, however, for their potential impact on the markets and economy.

Is Generation X Preparing Adequately for Retirement?

Future financial needs may be underestimated.

Provided by

Jeffrey P. Kendall, CFP®    

If you were born during 1965-80, you belong to “Generation X.” Ten or twenty years ago, you may have thought of retirement as an event in the lives of your parents or grandparents; within the next 10-15 years, you will probably be thinking about how your own retirement will unfold.1 

According to the most recent annual retirement survey from the Transamerica Center for Retirement Studies, the average Gen-Xer has saved only about $72,000 for retirement. Hypothetically, how much would that $72,000 grow in a tax-deferred account returning 6% over 15 years, assuming ongoing monthly contributions of $500? According to the compound interest calculator at Investor.gov, the answer is $312,208. Across 20 years, the projection is $451,627.2,3

Should any Gen-Xer retire with less than $500,000? Today, people are urged to save $1 million (or more) for retirement; $1 million is being widely promoted as the new benchmark, especially for those retiring in an area with high costs of living. While a saver aged 38-53 may or may not be able to reach that goal by age 65, striving for it has definite merit.4

LPL Research Midterm Perspectives

LPL Financial Chief Investment Strategist John Lynch shares thoughts on policy, market, and economic implications.

When a Windfall Comes Your Way

What do you do with big money?

Provided by

Jeffrey P. Kendall, CFP®

Getting rich quick can be liberating, but it can also be frustrating. Sudden wealth can help you address retirement saving or college funding anxieties, and it may also give you the opportunity to live and work on your terms. On the other hand, you’ll pay more taxes, attract more attention, and maybe even contend with jealousy or envy. You may also deal with grief or stress, as a lump sum may be linked to a death, a divorce, or a pension payout decision.

Rainy Days and Mondays…

Rainy Day Funds Can Come in Handy

By

Jeffrey P. Kendall, CFP®

Like those Monday mornings after a long weekend, no one wants to see a rainy day, otherwise known as an emergency.  But also like Mondays, emergencies are inevitable.  Life is expensive enough without those rainy days, and a little bad luck or a twist of fate can hit us right in the checkbook and challenge us to live within our budget.

An emergency reserves fund can help with major financial disruptions, which is why I have my clients sock away at least three months, and preferably six months, of living expenses, but for the minor ones, a rainy day fund might just do the trick.

2018 Mid-Year Outlook

The Plot Thickens

by

LPL Financial Research

The LPL Research team proudly presents the Midyear Outlook 2018: The Plot Thickens, with investment insights and market guidance covering the rest of the year.

LPL Research believes the following three themes will be key to the markets over the balance of 2018:

Where is your Focus...

Return on Life or Return on Investments?

By Jeffrey R. Karp, CLU, ChFC, CASL^®

Founder/President - Karp Financial Strategies, Inc.

One of the most difficult questions we ask our clients is “Why is money important to you?”  Most people react to the question with a look that says - What a ridiculous question (and you may have just had the same look).  Take a moment to be truthful and answer the question.  Here are some of the responses that we get: 1) Having money means I can pay the bills, 2) I can buy stuff I want, 3) I can leave money for my kids.  How did you answer?  Had you ever considered this question?

Using a Roth IRA as a College Savings Tool

A tax-advantaged option too many families overlook.

Provided by

Jeffrey P Kendall, CFP®

At first glance, a Roth IRA might seem an unusual college savings vehicle. Upon further examination, it may look like a particularly smart choice.