Retirement is supposed to be a time of relaxation and freedom. But many Americans struggle to know how to best save for the post-employment years and some don’t have enough money set aside. Working with a skilled financial advisor can help guide your dedicated savings into products and services designed with retirement in mind. Linda Jensen of Asset Care & Preservation Services is constantly researching, learning and exploring the often convoluted world of money and finance so she can help her clients when they stop working. The goal is peace of mind in retirement.
The most common retirement options are 401(k) & 403(b) plans and IRAs. A 401(k)/403(b) plan is typically facilitated by an employer and allows for tax-deferred contributions. Contributions to an IRA, or Individual Retirement Account, are, in most cases tax-deductible. For example, if you put in $1,000, then your taxable income decreases by that amount.
On June 30, 2020, the Securities and Exchange Commission, or SEC, implemented new rules that require brokers and financial professionals to explain the risks and rewards of recommendations, as well as its costs for each client says industry expert, Ed Slott: “Closer scrutiny of client rollover advice means that a comprehensive analysis, including a discussion with the client about rollover benefits and drawbacks, is an absolute must for anyone considering a rollover. With that in mind, it is imperative for advisors to educate themselves and thoroughly understand all the options and rules governing company plan-to-IRA rollovers.”
Linda Jensen, an Ed Slott Elite Advisor, explains that this primarily relates to deciding if and when to roll your employer plan funds into a personal IRA. Under the new guidelines, individuals can choose to roll the assets into an IRA, leave funds in the employer’s plan, receive a lump sum distribution or a combination of all three. “Ed is providing guidance for members of his elite group,” says Jensen. “It’s amazing how complicated IRAs can be.” Ed Slott is one of the top five PBS fundraisers and a popular guest. Linda takes his tax training class twice a year.
“Each option has benefits and drawbacks,” explains Jensen: “Rolling over an employer plan into an IRA is a big decision: does the participant need access to the money, how old are they, are they divorced or possibly will become divorced, do they have company stock in the plan, have they taken a loan?” Working with a holistic financial planner offers not only advice regarding IRA rollovers, but retirement planning, income planning, Roth Conversion strategies, tax and estate planning.”
And going it alone can be tricky. The different types of IRAs have different restrictions on contributions, disbursement and rollovers. Linda says: “It’s easy to get tripped up so getting advice from a fiduciary can be helpful. For example, the IRS allows an unlimited number of direct rollovers where the check is issued to the custodian. Indirect Rollovers when the check is issued to the participant are limited to one per year. This can create an enormous headache if more than one indirect rollover is performed. Creating an overall plan and taking into account all savings, Social Security, pensions and taxes can offer peace of mind and a roadmap for success.”
Navigating financial changes and red tape isn’t easy but continuing education is one of Jensen’s lifelong passions. “I’m a Certified Financial Educator through the Heartland Institute and an instructor for the Society for Financial Awareness (SOFA). Both SOFA and Heartland are nonprofits that offer financial literacy classes for worksite training. I’m an educator at heart and believe I need to be educated to offer clients the best advice. My passion is to help clients discover their retirement planning options and enable them to make the best decisions.”
Reports show that “The average American will retire at age 66 and live until nearly 79. Reaching age 85 and older is now the fastest growing segment of the U.S. population. For many, retirement will last much longer than 13 years…That’s why younger workers need to plan for two decades or more of income in retirement. With this in mind, consider scheduling a meeting with Linda Jensen by calling 360-878-8065 today or visit the Asset Care & Preservation Services website. Her life and legacy planning skills can help make sure your retirement years are all you want them to be.