Finance - Retirement Planning

How much of your annual income should you have saved for retirement?

10x

How much of your paycheck should you save for retirement?

10-15%

What is a tax deferred retirement plan?

The money is only taxed during retirement.

When should you start saving for retirement?

As early as possible.

Pension

An employer funded plan that promises to pay a defined monthly benefit to retirees who have worked a qualifying amount of time (usually 20-30 years).

401K

A tax deferred, employer created investment account that is funded by employees, contributing a percentage of their salary.

Traditional IRA (Individual Retirement Account)

A tax deferred investment account you open with a bank or financial institution.

Roth IRA

Same as a traditional IRA, but taxes are paid before retirement and during retirement, you don’t have to pay anything.

Social Security

A government pension

Qualifications for SS

Retirees must be 62+ and have paid SS taxes for 10+ years.

At what age do people receive full filing benefit?

67 years (Even though most retire at 64).

Medicare

The federal government health insurance program for people 65+ that automatically signs them up at 65.

What people does medicare also cover?

Young people who have had long term disabilities for at least 2 years.

Is medicare subsidized?

Yes, the costs are partially covered by taxes, but not free.

What two parts of medicare are people automatically enrolled in?

Part A, covering hospital related services and emergency care, and Part B, covering doctor’s office visits.

Last will and testament

A legally binding document in which an individual details written instructions on how their assets will be distributed upon their death.

Intestate

Dying without a will

Beneficiaries

The people who will receive part of the deceased assets.

Estate

Entire property

Executive

The person in charge of making sure the will happens.

Notary Public

Someone who is officially liscensed to sign official docs.

3 ways people write a will?

Free template (by themselves), online service, or hire an estate/planning attorney.