Creating a sound investment strategy now pays dividends in your retirement years. 

Life is running at full speed for you right now. Balancing your professional career with your growing children leaves little time to sit and think about yourself. But there will be a day when things slow down and you’ll actually be able to kick back and relax.

Planning for Retirement

Yes, your retirement still might seem like an event in the distant future, but now’s the time to be as aggressive as possible nurturing your nest egg so you can enjoy a more financially secure life later on. There will come a time when you’re ready to put the wraps on your working career, and you want to make sure you have a strategy in place so that you can retire comfortably.

When it comes to retirement, each option contains certain tax benefits and specific rules for withdrawing money.

Traditional IRAs

Savings in a Traditional IRA are tax-deferred until the money is withdrawn, meaning you'll need to prepare for the tax implications for your withdrawals. At age 70 ½, the Internal Revenue Service requires you begin taking annual minimum withdrawals from your Traditional IRA account, but you can start withdrawing penalty-free at age 59 ½. Also consider there are penalties that come into play when you fail to take the required minimum distribution.

Several factors, including your IRA account balance and projected life expectancy, go into determining what “minimum” actually means for you, so consult with our financial advisors to get the answer.

Roth IRAs

Contributions to your Roth IRA are taxed before they are invested, so generally, these withdrawals will be tax-free. But there are some exceptions. If your Roth IRA account is at least five years old and you’re over age 59 ½, you won’t pay taxes on your withdrawals. If you’re withdrawing money from your Roth IRA before you reach age 59 ½, you’re subject to a 10 percent early withdrawal penalty tax on the investment gains only. You never will be penalized for withdrawing the amount of your original contributions, no matter your age, and the IRS doesn’t require you to take annual withdrawals.


Many employers offer a 401(k) retirement plan, either a traditional or a Roth. With the Roth option, you contribute post-tax money, so your qualified distributions are not taxable. With the traditional 401(k), you typically contribute pre-tax money, so you’ll pay taxes on the distributions.

Distributions on all 401(k) plans can begin at age 59 ½. You are required to withdraw funds starting at age 70 ½ for the 401(k)s, unless you’re still employed.

Keep in mind the administrative fees of the 401(k) because they will eat into your earnings each year. If you believe these fees are too high, you can either opt out of your employer’s plan or alert your human resources department to your concern and suggest your company consider alternate plans. But if you’re comfortable with the fees and investment choices, you can benefit from your employer matching your contributions up to a certain percentage. Essentially, this is free money you’re receiving for participating in the 401(k) plan.

Contribution limits for 401(k)s can change. Check with your company’s human resources department for the most updated information. 

Health Savings Account

Use an HSA to create a financial cushion for retirement and to save money for any medical expenses you incur during your retirement years. Contributions to an HSA do not affect your IRA funding. Funds withdrawn from your HSA are tax-free if the money is used to pay for qualifying medical expenses, and money you deposit in the HSA is tax-deductible. To establish an HSA, you must first own an HSA-qualified High Deductible Health Plan. 

Please consult your financial advisor to understand all the tax implications of these various retirement options.

Enjoying Retirement

Ensure your retirement years are golden with smart spending and investment strategies to match your lifestyle.

Now that you’ve reached retirement, you’ll probably need to keep doing a lot of what you’ve been doing leading up to this day. That means budgeting and smart money management to keep your finances in order and ensure you maintain your path into retirement.

Because you’re retired, you’re likely comfortable with the disciplined behavior you need to save for the long term. The same strategies you used before retirement will continue to serve you well. Living within a budget is important now because you’re reliant upon cash flow from your investments to fund your lifestyle. But your spending plan can be challenged in retirement because you have more free time to spend money than you did when you were working full time.

Keys to Enjoying Your Retirement 

  • Create a reasonable spending plan: Living in retirement means monitoring your spending and planning accordingly for inflation to ensure that your investment earnings and additional cash flow meet your needs. If you set goals you can’t meet, you’ll quickly become frustrated or you’ll create an extreme penny-pinching reality that you won’t enjoy. And what’s the point of retirement if you can’t enjoy it? Start by setting goals that are reasonable so you can watch yourself make progress. You want to stretch yourself without breaking.
  • Find an easy way to track your spending: Keep tabs on how you spend your money, but don’t feel like you have to track every single penny if that’s not your personality type. If you’re able to see where your money goes each week or month, you’ll be able to analyze your spending more accurately and pinpoint areas where you can cut back on frivolities that don’t truly benefit your life. This practice is a great way to feel good about the progress you’re making while you adjust your spending plan and goals.
  • Maintain a diversified portfolio: This means more than just investing 50% in equities. You should create diversity within your asset classes to spread among different U.S.-based and international stocks in companies of various sizes and industries. You will experience greater risk within these investments than you will in safer investments, such as cash and bonds, but the growth element will allow you to build more wealth for your future. Similarly with bonds, you should spread out your investments to different holdings.


Work with your spouse or partner: It’s important to involve your significant other in this process so you both agree on the plan. Without cooperation, a spending plan can drive people apart because a lifestyle will be forced on one person without his or her input. It’s important to give each other some cushion as you implement this plan, and get comfortable with its effects on your daily lives.

Make the most of your retirement years by creating a budgeting plan that allows you to experience life with less worry.