How to Retire Early

How to Retire Early: Retiring early sounds like a dream come true, but it’s important to take a look at the cold, hard facts.

The Power of Tax-Deferred Growth

The Power of Tax-Deferred Growth: Why are 401(k) plans, annuities, and IRAs so popular?

Blue Springs Income Tax Preparation Checklist

Our Blue Springs tax organizer will help you organize your tax information and make sure you don't miss any important deductions during tax preparation.  
 
Please complete the following steps to take advantage of this tax organizer.
 
1. Click on the "2017 Tax Organizer" button below to bring up the organizer in a new window. If you have a small business, rental property or a farm please complete the additional organizer as well.
 
2. Fill out all the information you can.
 
3. To schedule a time for us to visit please call 816-220-2001 or schedule online. 

4. Bring the completed tax organizer and all supporting documents to the meeting or you may use our Client Secure File Portal to send us your organizer and supporting documentation.

2017 Tax Organizer

Small Business Organizer

Rental Property Organizer

Farm Income

Where Will Your Retirement Money Come From?

For many people, retirement income may come from a variety of sources. Here’s a quick review of the six main sources:

Social Security

Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker’s 35 highest earning years. If there are fewer than 35 years of earnings, non-earning years are averaged in as zero. In 2017, the average monthly benefit was estimated at $1,360.¹

Personal Savings and Investments

Personal savings and investments outside of retirement plans can provide income during retirement. Retirees tend to go for investments that offer monthly guaranteed income over potential returns.²

Individual Retirement Accounts

Traditional IRAs have been around since 1974. Contributions you make to a traditional IRA may be fully or partially deductible, depending on your individual circumstances. Distributions from a traditional IRA are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.

Roth IRAs were created in 1997. Roth IRA contributions cannot be made by taxpayers with high incomes. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawal also can be taken under certain other circumstances, such as a result of the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.

Defined Contribution Plans

Many workers are eligible to participate in a defined–contribution plan such as a 401(k), 403(b), or 457 plan. Eligible workers can set aside a portion of their pre-tax income into an account, which then accumulates tax deferred.

Distributions from defined contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.

Defined Benefit Plans

Defined benefit plans are “traditional” pensions—employer–sponsored plans under which benefits, rather than contributions, are defined. Benefits are normally based on factors such as salary history and duration of employment. The number of traditional pension plans has dropped dramatically during the past 30 years. 

Continued Employment

In a recent survey, 68% of workers stated that they planned to keep working in retirement. In contrast, only 26% of retirees reported that continued employment was a major or minor source of retirement income.³

Expected Vs. Actual Sources of Income in Retirement

What workers anticipate in terms of retirement income sources may differ considerably from what retirees actually experience.  

Employee Benefit Research Institute, 2018 Retirement Confidence Survey

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax