Retirement Planning

Its never too early to start thinking about retirement.  Careful planning can insure you have ample funds and minimize the taxes you pay.  We can help!

 

Retirement planning can be challenging, the tax rules are complex and the jargon is overwhelming.  IRAs, Roth IRAs, SEPs, 401k, Roth 401k, SIMPLE are just some examples.  We put the information below together to help you better understand your options and provide basic guidance.

But, as with many financial options, the correct choice is dependent on your personal financial situation and life goals.  The plan for someone age 25 may be very different from a 60 year old.  We are here to help!  Call JOD CPAs at (507) 334-5516 for an appointment.

Retirement planning news

  • IRA for those under age 50 - $6,000

  • IRA for those 50 and over - $7,000

  • SIMPLE plan for those under age 50 - $13,500

  • SIMPLE plan for those 50 and over - $16,500

  • 401(k) plan for those under age 50 - $19,500

  • 401(k) plan for those 50 and over - $26,000

2020 and 2021 Limits

2021 Social Security

 

The Social Security Administration announced a 1.3 percent boost to monthly Social Security and Supplemental Security Income (SSI) benefits for 2021. The increase is based on the rise in the Consumer Price Index over the past 12 months ending in September 2020.

For those still contributing to Social Security through wages, the potential maximum income subject to Social Security tax increases 3.1 percent this year, to $142,800 (up from $137,700 in 2020). 

 

Retirement planning basics

How to have a comfortable retirement

 

If you're age 35 or more and haven't made a serious effort to plan for retirement, your dreams of a comfortable and active retirement could turn into the nightmare of being old and poor.

Scare tactics, you say? Consider this: most experts say you need at least 66% of pre-retirement income to live comfortably when you retire. But an active retiree may need 70-80% of pre-retirement income to pay for added travel and health care costs.

Will your company pension and social security replace 60-80% of your salary?

Retirees and taxes

When it comes to taxes, growing older can have its advantages. But older individuals may also have additional tax-related requirements. Here's a quick overview of the tax and financial breaks available as you reach a certain age.

Is a Roth IRA right for you?

For most taxpayers, you have until April 15th of the following year to contribute into a Traditional IRA or a Roth IRA. Is an IRA an option worth considering for you? If so, which is better?

 
 

Social Security benefits

Are my Social Security benefits taxable?

 

Up to 85% of Social Security benefits can be taxed. Whether your benefits will be taxed depends upon your total income from both taxable and tax-exempt sources. Once your total income reaches $25,000 ($32,000 for married couples), a portion of your benefits will be subject to income tax.

This is important to know as you start receiving benefits. It may impact how much you are willing to work in a part time job and it may impact the amounts you withdraw from retirement accounts.

How much will I receive in benefits?

A good way to estimate your benefits is to use the Social Security's estimator which uses your actual Social Security earnings record.

For estimates that are not specific to a particular individual, the calculator below may helpful. 

When should I start receiving benefits?

Many factors go into your decision on when to start receiving your Social Security retirement benefit.  Some of these factors are whether you plan to continue working, other financial resources and obligations you have, and your anticipated health and longevity.

 

Retirement planning resources

Articles

Calculators

Title
Description
401(k) Calculator
A 401(k) can be one of your best tools for creating a secure retirement. Use this calculator to see why this is a retirement savings plan you cannot afford to pass up.
401(k) Savings with Profit Sharing
Use this calculator to how a 401(k) with profit sharing plan can help you save for retirement.
401(k) Spend It or Save It Calculator
There are several ways to manage your 401(k) when you leave an employer. Making the wrong decision can cost you thousands of dollars both in taxes and lost earnings.
403(b) Savings Calculator
If you are an employee of a non-profit tax-exempt organization, a 403(b) can be one of your best tools for creating a secure retirement.
457 Plan Contribution Effects on Your Paycheck
Use this calculator to see how increasing your contributions to a 457 plan can affect your paycheck as well as your retirement.
457 Plan Withdrawal
Use this calculator to see what your net 457 plan withdrawal would be after taxes are taken into account.
457 Plan: Roth vs. Pre-tax
Use this calculator to help determine whether a Roth or Pre-tax 457 might be best for you.
457 Savings Calculator
A 457 plan can be one of your best tools for creating a secure retirement. Use this calculator to see why this is a retirement savings plan you cannot afford to pass up.
72(t) Calculator
The IRS Rule 72T allows for penalty free, early withdrawals from retirement accounts. Use this calculator to determine your allowable 72T Distribution and how it can help fund your early retirement.
72(t) Distribution Impact
This calculator is designed to examine the affects of 72T distributions on your retirement plan balance.
Beneficiary Required Minimum Distributions
Use this calculator to determine your Required Minimum Distributions (RMD) as a beneficiary of a retirement account.
Company Stock Distribution Analysis Calculator
If you own company stock in a retirement plan you may be able to take advantage of using the long term capital gains tax rate rather than your ordinary income tax rate on this investment.
How Important is Social Security?
Use this calculator to determine how losing this important retirement asset could affect you.
How long will my retirement savings last?
Use this calculator to see how long your retirement savings will last based on your retirement savings and your inflation adjusted withdrawals.
IRA Spend It or Save It Calculator
Spending your IRA before your retire can be a costly decision. See how taking your out IRA early could cost you thousands of dollars both in taxes and lost earnings.
Individual 401(k) Contribution Comparison
Use this calculator to determine your maximum Individual 401(k) contribution as compared to three other possible plan options.
Individual 401(k) Savings Calculator
Use this calculator to see the benefits of an Individual 401(k) for the self-employed.
Life Expectancy
This calculator can give you an idea of your life expectancy based on your current age, smoking habits, gender and several other important lifestyle choices.
Pension Plan Retirement Options
Use this calculator to help decide between joint survivorship and single survivorship pension options.
RMD & Stretch IRA Calculator
Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible.
Required Minimum Distribution (RMD)
Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account. This financial calculator will also look at potential future year's distribution requirements.
Required Minimum Distribution (RMD) for Current Year
Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account for the current year.
Retirement Account Contribution Accelerator
Use this calculator to see how increasing your contributions to qualified retirement plan help save for your retirement.
Retirement Contribution Effects on Your Paycheck
Use this calculator to see how increasing your contributions to a 401(k), 403(b) or 457 plan can affect your paycheck as well as your retirement.
Retirement Income
Use this calculator to determine how much monthly income your retirement savings may provide you in your retirement.
Retirement Nestegg Calculator
Do you know how much it takes to create a secure retirement? Use this calculator to help determine what size your retirement nestegg should be.
Retirement Pension Planner
Plan your retirement with a company pension, find out if you are on track - and learn how to stay there.
Retirement Plan Withdrawal
Use this calculator to see what your net withdrawal would be after taxes and penalties are taken into account.
Retirement Planner
Quickly determine if your retirement plan is on track - and learn how to keep it there.
Retirement Planner with Retirement Earnings
Plan your retirement with pension and possible retirement employment income. Find out if you are on track - and learn how to stay there.
Retirement Shortfall
Running out of your retirement savings too soon is one of the biggest risks to a comfortable retirement. Use this calculator to find a potential shortfall in your current retirement savings plan.
Roth (after-tax) Account or Pre-Tax Account?
Starting in 2006, you may have the option to contribute to Roth account. Use this calculator to help determine which retirement plan option might be best for you.
Roth 401(k) vs. Traditional 401(k)
Use this calculator to determine which 401(k) contribution type might be right for you.
Roth 403(b) vs. Traditional 403(b)
Use this calculator to determine which 403(b) contribution type might be right for you
Roth IRA Calculator
Use this calculator to compare the Roth IRA to an ordinary taxable investment.
Roth IRA Conversion
This calculator will show the advantage, if any, of converting your IRA to a Roth.
Roth IRA Conversion with Distributions
Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible.
Roth IRA vs. Traditional IRA
Use this calculator to determine which IRA may be right for you.
Roth vs. Traditional 401(k) and your Paycheck
See how a Roth vs. Traditional 401(k) might affect your take home pay as well as your retirement savings.
Should you Borrow From a 401(k) or 403(b)?
The majority of 401(k) plans and a growing number of 403(b) plans let you borrow money from your account. Use this calculator to help you determine if you should borrow, and the potential impact on your retirement savings.
Social Security Benefits
Use this calculator to estimate your Social Security benefits.
Traditional IRA Calculator
How can contributing to a regular IRA help you in your retirement?