Retirement Planning Goals for 2017

No matter how old you are, it is never too late to begin saving for your golden years. Setting your retirement planning goals for 2017 now will help you reach your goals in the coming year. Any savings or budgeting strategy takes commitment and dedication to succeed—but you can do it. Here’s how…

If you don’t have a retirement plan, open one.

We cannot stress this enough. You’ll never successfully begin saving for retirement until you actually open an account and get motivated. Depending on the type of account you choose, you may have more time than you think to open an account and begin saving in the new year.

Individual 401(k) plans must be established by December 31st to apply to that year’s tax returns. If you open one now, you can begin saving immediately in 2017. (If you want any contributions to count towards your 2016 income tax return, the employee salary referrals into the plan must be made before January 31, 2017. Employer contributions must be made before you file your tax return, which includes any extension dates.)

Traditional and Roth IRAs can be opened by April 15 of the new year to count towards the previous year’s tax return. So, if you open one by that date and make a contribution, not only can that contribution count for this year’s income, you’ll be set and ready to save in 2017.

SIMPLE IRAs must be established by October 1, so you’ve missed the deadline for this year’s tax returns. However, if this is the best plan for you, make sure you open one by October 1, 2017. In order to get started saving as soon as we ring in the new year, plan to open that account in early January.

SEP IRAs have no expiration date except that the account must be established before you pay taxes for the year in which you wish it to count. This includes the deadline date for any extensions. So, if you don’t file your 2016 taxes until October 15, 2017—you have until then to establish the IRA. However, we don’t suggest you wait that long unless you have to, because the intent of this article is to help you get a head start on retirement savings in 2017.

Another account you might consider opening is a health savings account (HSA). In order to qualify for an HSA, you must be enrolled in a high deductible health plan. HSAs are becoming increasingly popular to supplement retirement income. All contributions are tax deductible and distributions are tax free provided the funds are spent on qualified medical expenses. HSAs are incredibly beneficial in helping to offset the staggering rise of health care costs. You have until April 15 to open one if you wish any contributions to count towards this year’s tax return.

Now that you’ve chosen a retirement account, it’s time to figure out how much you can save every year.

These tips work for everyone, even if you established a retirement plan long ago. You should review your budget every year and readjust your savings goals to fit your current situation. For instance, if you started saving in your 30s but are now in your 40s and making more income but have not increased the amount you contribute towards your retirement plan—well, it’s time to do that!

Devise a retirement savings strategy.

Plan to max out the contribution limits of your plan every year if you can. Doing so increases the earning potential of your portfolio in terms of having more funds to invest. Not to mention that the more money you can stock pile away, the more you’ll earn thanks to the beauty of compound interest that builds in your account!

Determine how much you can contribute to your retirement plan from each paycheck and stick to it.

Even if you can’t max out your annual contribution limits, saving every penny you can for retirement will only benefit you in the long run.

If you get a bonus or a raise (and even if you win the lottery) put as much of that extra cash as you can into your IRA.

Any additional funding you can manage will help you max out those yearly limits and you’ll appreciate the effort you make now when you retire.

When finally you pay off a recurring monthly bill, consider directing that same amount (or even half of it) every month into your retirement plan.

Here again, while we know it’s nice to have extra cash each month to spend, your future self will thank you for socking it away in your retirement account instead.

Look in to self-directed retirement plans.

Self-directed retirement plans cut out the typical investment broker who chooses investments for you and allow you to choose your own. With total control over your investing funds and decisions, you have the freedom to explore alternative assets (like real estate, private lending, private equity and more) that will help diversify your portfolio. Because you are not limited to the typical stock, bond or mutual fund, you can invest in things you personally know and understand—which can potentially increase your odds for success.

Retirement saving is vitally important if you want to retire comfortably (or at all!) and choosing a plan along with following a good strategy can help you reach your goals. Pick a path that fits your current situation, allowing you to save as much as you can, and stick to it. Your future depends on it.

About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.