Contact Us
Firm Overview
Why Legend Is Different
Client Types
Professional Biographies
Frequently & Rarely Asked Questions
Risk Spectrum
Investment Strategies
Second Opinion
Global Investment Pulse
Event Calendar
Press Center
Legend News
Clients Only
Career Opportunities
Directions
Newsletter Sign-up
Site Search
Site Map
Home
Tell A Friend About This Website
 
 
 
Informational Booklets   
Phone: (412) 635-9210
  (888) 236-5960
Connect With Legend:
Subscribe to me on YouTube

Five Smart IRA Ideas For Pre-Retirees

Nobody has to tell you how crucial it is to save for retirement. You may have a healthy balance in your 401(k) or other plan at work, and likely have money in one or more individual retirement accounts. But that doesn’t mean you’re set up for a comfortable retirement.

There’s still plenty you can and should do now to help feather your nest egg, and your IRAs, in particular, may need attention. Here are five good ideas to consider well before you retire.

1. Figure out how far your IRAs will have to go. If you’ll need your IRAs to cover only a small percentage of your retirement needs, you may handle the assets differently than if they’ll play a major role. Start by determining what you’ll likely spend during retirement, and try not to depend on rules of thumb, such as the notion that you’ll need about 70% to 80% of pre-retirement income. Instead, add up what your actual expenses are likely to be, and be certain to include a generous allowance for health care costs. Then, tote up your other sources of income, from a company pension, an inheritance, Social Security, and the like. Subtract that number from your total requirement to see what you’ll need your IRA to contribute. Keep in mind that IRA dollars differ from Roth IRAs and nonretirement accounts because your distributions will be taxed as regular income.

2. Review your asset allocation. Asset allocation within IRAs should be reviewed in conjunction will all your other accounts to ensure a tax-efficient portfolio is constructed and maintained. Broad diversification helps provide steadier returns, with winning investment classes making up for others that may be lagging. But beyond holding several kinds of assets—a variety of domestic and international stocks, several kinds of bonds, and cash—you need to consider what allocation fits your goals and tolerance for investment risk. Recent markets have been turbulent, and that may help you understand how much risk you’re willing to take. If you view the recent downturn as part of a normal market cycle, you may feel comfortable holding mostly stocks in your port-folio, particularly if retirement is still a decade or more away and you need maximum returns to meet your goal. In any case, you’ll likely want to move to a mix that’s less aggressive as your retirement date approaches.

3. Consider a Roth IRA conversion. A Roth IRA has two big advantages over a traditional IRA. Distributions from a Roth during retirement aren’t taxed, and if you don’t need the money and prefer to leave it to your heirs, the government won’t force you to make withdrawals. To gain those benefits, though, you have to pay income tax on the money going into the plan. But if your account balance is reeling from recent losses, you have an opportunity to convert your holdings at a depressed rate and later recover those losses on a tax-free basis within a Roth IRA. Through 2009, a conversion is possible only if your adjusted gross income is $100,000 or less. But starting the following year, anyone will be eligible to convert to a Roth IRA, and if you make a conversion in 2010, you can spread out your tax liability over two years.

4. Check your beneficiary designations. This may seem like a minor issue, but it couldn’t be more crucial. Even if you have an up-to-date will reflecting how you’d like your possessions distributed after your death, it won’t trump the designations on your retirement accounts. So if an old IRA calls for your ex-spouse to inherit it, for example, that’s what will happen. If you have several accounts, it’s easy to lose track of all the provisions you’ve made, and you could have made mistakes in the paperwork. A careful review to assure that the designations for each individual account correspond to your overall beneficiary goals can help avoid problems when you’re no longer around to fix them.

5. Get help with the whole process. When you were young, with much smaller account balances and decades until retirement, it may have made sense to call the investment shots for your IRAs. But now there’s much more at stake. With the clock ticking, you need to be confident that you’re making all the right moves, saving an adequate amount, and investing your assets in a way that gives you the best chance of meeting your goals. Working with a professional can give you confidence that you’re on track to a satisfying life after work. Please give us a call if you’d like to discuss where you stand and what you’d like to achieve.


This article was written by a professional financial journalist for Legend Financial Advisors, Inc.® and is not intended as legal or investment advice.



INDEX
  • BUYING A VARIABLE ANNUITY IS USUALLY PROBLEMATIC: SKY HIGH EXPENSE RATIOS CAN SIGNIFICANTLY IMPACT FUTURE RETURNS NEGATIVELY
  • Five Steps When You Inherit Assets
  • How To Spell Estate Tax Relief
  • One Last Shot At A Tax Exemption
  • 5 Ways That Can Help You Pay For Higher Education
  • Seven Smart Money Moves You Should Make In 2017
  • Sticking With The Fundamentals
  • 17 Midyear Tax Moves You Still Can Make In '17
  • A Quick Overview Of Preferred Securities
  • Weigh Five 401(k) Options When Leaving A Job
  • Locate A Tax Shelter Near A School
  • How To Improve Chances For College Financial Aid
  • What Would You Do For A Bigger Salary Or More Benefits?
  • 7 Late Moves To Cut Taxes This Year
  • Seven Good Reasons To Create And Fund A Trust
  • A Good Time To Remember How Long-Term Investors Must Think
  • Remember The Lesson Of Rebalancing
  • Section 529 Plans Keep Getting Better And Better
  • Three Ways You Can Play Good Stock Market Defense
  • When Can You Reconvert To A Roth?
  • 8 Compelling Tax Reasons For Roth IRA Conversion
  • Steer Clear Of These 7 Traps For IRA Owners
  • Make Sure That You Comply With All The RMD Rules
  • How A Financial Advisor Can Help
  • Rising Housing Prices May Be Sign That New Bubble Is Forming
  • After Five Great Years For Stocks, What's Next?
  • What Are Latest Trends In Prenups?
  • The Three Biggest Financial Mistakes That You Can Make
  • 4 Of The Main Reasons To Keep Your Bypass Trust
  • Seven Steps After A Spouse's Sudden Death
  • 7 Expired Tax Breaks That Were Given A Longer Life
  • Will Record Profit Margins Upend The Bull Market?
  • 14 Top Year-End Tax Moves For Individuals In 2014
  • Be An Elephant And Downplay Talk Of Bulls And Bears
  • Five Financial Vows For Newlyweds
  • Will Record Profit Margins Cause Stock Prices To Plunge?
  • Ins And Outs Of Nondeductible IRAs
  • Identifying Investment Risk And Coping With It
  • How Best To Leave IRAs To Your Grandchildren
  • 4 Tips For Assembling A College Savings Plan
  • Don't Be Shocked If Your Tax Deductions Are Slashed
  • 2013 Was A Poor Year For Diversification
  • Risk Rose Slightly In January, But Has Decreased In February
  • Expenses And Behavior Are Key To Investment Success
  • Five-Year Returns Show Why Diversification Is Key
  • Where Can You Invest For Safety?
  • Perspective On Stock Market Trends
  • Find Extra Benefits In DI Insurance
  • Crash Course On Paying For College
  • A Realistic Look At A Hot Topic: Dividend Stocks
  • Don't Ignore These Tips About TIPS
  • Investors Flee Stocks At Precisely The Wrong Time
  • Take A Closer Look At Your RMDs
  • 10 Reasons For The IRS To Flag Your Return
  • Economic Growth Set To Slow Down Around The Globe
  • Where Will You Live After You Retire?
  • Muni Bonds May Show Gains As Tax Increases Approach
  • Two Investment Principles In Tandem
  • Is It Finally Time To Refinance?
  • Do You Understand Investments?
  • The Best Way To Gauge If The Market Is Overvalued
  • Should You Take Social Security Early Or Late?
  • Identity Theft In The New Year
  • Preserving Assets For Generations To Come
  • Managed Futures Mutual Fund Update
  • Give Away Gifts With No Gift Tax
  • Saving For Retirement
  • 21 Shocking But True Statistics About Retirement
  • Why You Shouldn't Do Your Own Estate Planning
  • Take The Time To Give Lifetime Gifts
  • What Does The Downgrade Of U.S. Debt Really Mean?
  • Should You Give Gift Cards? They May Not Be Used
  • What Do You Want Your Legacy To Be?
  • Breaking Up Doesn't Have To Be Hard
  • Do You Have An Administrative Trustee?
  • Will The New Financial Reform Law Benefit You?
  • Roth Conversion Can Hurt College Aid
  • Do Second-To-Die Policies Merit A Second Chance?
  • It's NOT The Economy, Stupid!
  • Biggest Estate Tax Problem? Income Tax
  • The Ins And Outs Of Lifetime Gifting
  • What To Do If Your College Savings Plan Is Battered
  • Identifying And Fixing The Global Economy's Woes
  • Uncle Sam Changes Financial Aid Rules
  • Retirees Eligible For Many Tax Cuts In Recovery Act
  • Funding College Savings Plans For A Grandchild
  • An Update On College Savings Plans
  • Five Smart IRA Ideas For Pre-Retirees
  • Does Your 529 College Savings Plan Match Up?
  • A Reverse Mortgage For Mom And Dad
  • Tax Pros And Cons Of Municipal Bonds
  • How The Bankruptcy Law Affects Wealthy Individuals
  • Limits of Family Limited Partnerships
  • They Don't Call 'Em Trusts For Nothing
  • The Roth 401(k) - Is It Right For You?
  • Planning Ahead A Couple Of Generations
  • Use FLPs To Transfer Assets And Cut Estate Taxes
  • What You Need To Know About The AMT In 2008
  • Coping With Estate Tax Uncertainties
  • Thinking of Remarrying? Think Prenup
  • Many Americans Fail To Take Care Of Financial Basics
  • Beware Of Social Security Identity Theft
  • Regulatory Guidelines Update
  • Energy Systems Scale and Timeline
  • Free Credit Reports Available Online
  • Don't Forget About Roth 401(k)
  • The Oil Patch Profit Squeeze
  • Understanding the Importance of a Fiduciary Standard
  • Timber As A Liquid Investment
  • Emerging Market Food Consumption Growth Equals Rising Prices
  • Ethanol: Salvation or Panacea?
  • Timber Facts
  • Bank Loan Funds - A Primer
  • The Dangers of Medical Identity Fraud
  • A Primer On Managed Futures
  • REITS: A Very Good Portfolio Diversifier, But Should You Invest In Them?
  • Does Investing Internationally Still Diversify Your Portfolio?
  • Another Way To View The Current Valuation Of REIT Sector
  • Understanding Risk-Preparing For The Unseen
  • Why Not Alternative Fixed Income Investments?
  • How Dangerous Is A Dollar Crash?
  • What Is Shorting Expense?
  • How Volatile Can The Stock Market Be?
  • GMO 7-Year Asset Class Return Forecast Is Bleak
  • Too Many ''Phish'' In The Sea
  • The Case For Industrial Metals
  • Ways To Improve The Score
  • Know The Score
  • Total Credit Market Debt (All Sectors) As % Of U.S. GDP
  • To Reinvest Or Not To Reinvest
  • Just How Expensive Is The Market?
  • Beware of Brokerage Firms' Misconduct
  • Identity Theft : Correct Those Credit Reporting Errors
  • Risk-Controlled Investing
  • What Do Rising Interest Rates Mean For Money Market Yields?
  • Q & A With Robert Arnott
  • Identity Theft : Applying For Credit? Better Check Your Credit Report First
  • Identity Theft: Everyday Prevention
  • Identity Theft: Help Is On Its Way
  • Identity Theft: Tips to Protect Yourself
  • Identity Theft: A Note About Social Security Numbers
  • Identity Theft: What Documents Should You Shred Or Store?
  • Identity Theft : Don't Fall For That E-Mail!
  • Identity Theft : One More Reason To Protect Your Credit
  • Section 529 Plans Are Popular But Not The Only Way To Go
  • Exit Gracefully: How Business Owners Should Plan For A Comfortable Retirement
  • The Importance Of Commodities In A Portfolio
  • A Tale Of Two Hedges
  • What Is Risk?
  • How To Find A Great Financial Advisor?
  • Is It Time To Find A New Financial Advisor?
  • 4 Steps To A More Secure Investment Portfolio For Your Retirement
  • Traditional Investing May Decrease Your Retirement Lifestyle
  • Year-End Tax Planning Can Help Generate High Return On Investment
  • Is Your 401(k) Plan A Failure?
  • Understanding Deflation
  • Tax Issues To Consider When Buying A Long-Term-Care Policy
  • Evaluating The Quality Of A Company's Earnings
  • Investing In Times Of Uncertainty And Risk: The Importance Of Diversification
  • 2001 Tax Relief Act Changes Education Planning
  • Yesterday's Great Companies
  • A Retirement Plan Primer After The 2001 Tax Act
  • Beware Of Common Home Repair Scams
  • Custodial Accounts: One Way To Make Gifts To Children
  • Estate Taxes To Be Reduced Then Repealed In 2010
  • Faulty IRA Conversions Can Lead To Tax Penalties
  • Many Individuals Pay Private Mortgage Insurance Beyond When It Is Necessary
  • Rethinking Estate Planning
  • Retirement Plan Contribution Limit Changes
  • Shopping For A Bank Account That Pays The Highest Possible Rate Of Interest
  • Early Retirement Incentives For Tenured Faculty Waives Fica Tax Payment
  • Do It Yourself Tax Preparers Watch Out: Tax Answers From IRS Centers Oftentimes Are Incorrect And/Or Insufficient
  • Your Medical File Report May Need A Check-Up
  • Five Tips For Preventing Thefts From Your Checking Account
  • Home Office Deductions: Hoops To Jump Through
  • Income Tax Effect On Single And Married Taxpayers
  • Income Tax Planning For Investments
  • Property Tax Challenges Should Not Be Overlooked
  • The IRS Will Follow Your Wealth To The Ends Of The Earth
  • When Do You Need Life Insurance
  • REITs: A Great Diversification Investment
  • Bank Loan Funds: A Great Fixed Income Investment As Interest Rates Rise
  • Estate Tax Will Be Reduced Gradually, Then Repealed in 2010



  • ©2017 Legend Financial Advisors, Inc.®. All rights reserved.