A Hauppauge elder law attorney provides assistance in making plans for retirement. Many people aren’t aware that an elder law attorney offers help to clients in achieving financial security during their golden years. One of the key types of help that an experienced attorney provides is helping you to jumpstart your retirement savings by taking advantage of retirement tax breaks. These tax breaks can make a big impact on your ability to save for your future, so you should work with an experienced attorney to take advantage of them throughout your career.
Mark S. Eghrari & Associates PLLC has helped many individuals and families to create a plan to maximize their ability to save for retirement. As Investopedia explains, among Americans ages 55 to 64, average retirement savings totals only $104,000 – which would provide an income during retirement of only $310 monthly.
This obviously isn’t enough to live on, so you need to do better than the average if you want enough money for a comfortable retirement. Call our Hauppauge elder law attorneys today to find out how Mark S. Eghrari & Associates PLLC can help you to make saving enough for retirement simpler by taking full advantage of tax breaks available to you.
Tax Breaks for Retirement Savings
There are a number of retirement savings accounts that come with tax breaks which make it easier for you to save for retirement, but you need to understand the different kinds of accounts you could be eligible for and the rules for investing in them.
One option is a 401(k) account. You can invest up to $18,000 annually in a 401(k) and can make additional catch-up contributions if you are an older worker. A 401(k) is typically available only if your employer offers this type of account. However, you could open a solo 401(k) if you own your own business and do not have any full-time employees who work at your company, other than your spouse.
Another alternative that is available to you is an Individual Retirement Arrangement (IRA). You can invest in an IRA in addition to making an investment in your 401(k), provided your household income is not high enough to cause you to lose your tax deduction for IRA contributions. IRA contribution limits are $5,500 as of 2017, or $6,500 for older workers.
When you contribute to an IRA or a 401(k), your tax break comes when you make an investment. You invest with pre-tax funds, which means it essentially costs you less to make an investment because you get a discount equal to your tax bracket. If you’re in the 25 percent tax bracket and invest $10,000, you get a $2,500 tax break because you’re not paying income tax on $10,000 of your money. This means it actually only costs you $7,500 to make your investment. Your money in your IRA is also protected from things like bankruptcy.
If you are self-employed, you have additional options to invest in as well, including a SEP-IRA or a Simple IRA, which is designed for business owners. Each of these accounts allows for investing with pre-tax dollars. Each of these accounts also has their own rules for when and how much you can invest. Mark S. Eghrari & Associates PLLC can assist you in understanding these rules so you can make sure to follow IRS guidelines.
If you would prefer to take advantage of your tax breaks later, you have options as well. One of your best choices may be to invest in a Roth-IRA. A Roth IRA allows you to invest with after-tax dollars, but investments can grow tax free and you won’t have to pay taxes when you take money out of the account, provided you follow the rules for withdrawals. Mark S. Eghrari & Associates PLLC can help you to decide if it makes more sense for you to take advantage of the tax breaks now or if you would be better off allowing your money to grow tax free and be withdrawn with no tax obligations when you are a senior.
Getting Help from A Hauppauge Elder Law Attorney
A Hauppauge elder law attorney at Mark S. Eghrari & Associates PLLC can provide the personalized one-on-one help you need to understand what tax breaks you could be eligible for and to take advantage of those tax breaks to achieve a secure retirement. To find out more about how our legal team can assist you with achieving financial security during retirement by making the right investment choices throughout your career, give us a call at (631) 265-0599 or contact us online today. You can also join us for a free seminar to find out how our legal team can help with your retirement planning needs.