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Young Professionals
REALTOR® Emeritus |  | TAX-DEFERRED SAVINGS VEHICLES | | ||
|  Are You Ready to Retire? Retirement Budgeting Sources of Retirement Income Tax-Deferred Savings Vehicles Estate Planning Selling Your Business Getting Your Business Ready for Sale Working With a Business Broker Closing-Your-Business Sale More Resources: Retirement Planning | Probably the single biggest boost you can give your retirement savings plan is establishing a tax-deferred account that allows you to save pre-tax dollars. Because taxes are not paid on monies in these accounts until they are withdrawn (with the exception of Roth IRAs), your money builds up much faster. The plan options you chose depend primarily on how much money you want to save and to a lesser degree on the record keeping and administration required for each plan, says Keith Driscoll, financial consultant for Salomon Smith Barney in Tampa, Fla. In addition, some types of accounts can be also be a powerful retention tool when offered to brokerage company employees and sales associates working as independent contractors. Driscoll provides this quick overview of retirement options open to self-employed real estate professionals and small brokerage businesses. Tips for Choosing an IRA Individual retirement accounts are widely available from almost any bank or brokerage company and are perhaps the simplest way to use pretax dollars for retirement savings. TIP: You should have an IRA even if you have other forms of pretax retirement savings, advises Keith Driscoll, a financial consultant with Salomon Smith Barney in Tampa, Fla. All IRAs have benefits, but spend time deciding which plan is best for you. Traditional IRA
TIP: If you are 50 years of age or older, you can contribute an extra $500 annually to your IRA or Simple IRA beginning in 2002. You also can contribute $3,000 toward your spouse’s IRA. Roth IRA
TIP: Roth IRAs are a better choice for those under 40 because the year's gains from compounding will not be taxed. —Keith Driscoll, Salomon Smith Barney, Tampa, Fla.
TIP: The limit on IRA contributions will increase to $4,000 in 2005; and $5,000 in 2008 and beyond. It will be adjusted for inflation thereafter in increments of $500. —Courtesy of Philip Maynard, editor-in-chief of Tax Planning Ideas. Simplified Employee Pension (SEP)-IRA > | |