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Building, Protecting and Enhancing Your Wealth

Start buttonIf you save early and often, thanks to the power of time and the magic of compounding you will find yourself very comfortable in your retirement.

If you are interested in how you might build, protect and enhance your wealth throughout your life check out these time-test tools.

Start Now. A 25-year-old who saves $450 a month in a tax-deferred retirement account and earns an average yearly return of 7% will have about $1.1 million at age 65. If he or she waits until age 35 to start saving, they’d have to save $950 a month to reach the same balance by age 65. You should aim to save 15% of your income, including any employer match for your retirement plan.

Take advantage of employer incentives. For your company’s 401(k), you can contribute up to $18,000 ($24,000 for people 50 and older) in 2017 to this pretax account. Your employer may also add another 4% to 6% of your pay, maybe more. Try to save 15% of your income, including the company match, from the beginning of your career until the end. Even if you have to cut back for a few years, contribute at least enough to get the full company match, and boost your contributions later to get back on track.

Take stock. Calculate the future value of your current savings and see how much more you’ll need to save to attain your retirement goal.

Plan a plan. Create your retirement budget, with a column for essential costs (housing and food) and another column for discretionary expenses. Factor inflation at 2.4% over the next 20 years, and consider a separate calculation for health care costs which likely will increase at a much higher rate, perhaps as much as 5%. Match your expenses to guaranteed income, like pensions and Social Security, plus the annual amount you plan to withdraw from savings. If you see a gap, you’ll need to spend less or work a bit longer. That may not be a bad thing since staying in the workforce for a few extra years gives you more time to contribute to your retirement accounts—and you have fewer years to finance when you do retire.

Up your contributions. If you’re 50 or older, you can make catch-up contributions to your IRA and 401(k). This year, you can add $6,000 to your 401(k) above the $18,000 annual contribution limit. That’s a total of $24,000 for the year. You can also save an extra $1,000 in a traditional or Roth IRA beyond the $5,500 annual contribution limit (a total of $6,500 for the year). If you invest $24,000 in a 401(k) every year starting at age 50, you’ll boost your retirement savings by more than $580,000 by the time you’re 65, assuming a return of 6% per year. If you invest $6,500 in your IRA during those years, you could accumulate over $157,000 in your IRA in 15 years.

Self-employed savings. If you’re self-employed like I am, you can contribute up to 20% of your net self-employment income (business income minus half of your self-employment tax)to a SEP-IRA in 2017 with a cap of $54,000. In a solo 401(k) plan, you can save more, because you can contribute as both an employer and an employee. The maximum contribution this year is $54,000, or $60,000 if you’re 50 or older.

Reference: Kiplinger (March 2017) “5 Time-Tested Tactics to Save for Retirement”

 

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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.