Emergency Strategies for Retirement

There's still time to make your retirement happy.

Is your retirement looking as happy as you planned?

I stumbled upon this interesting article, You Can Still Retire Even If You’ve Saved Nothing, posted on the Bottom Line Personal in June. It is a topic many baby boomers are unfortunately being faced with: RETIREMENT. Of course we would all like to think of retirement as a time to relax and enjoy the fruits of our labor, but due to the economic climate we understand that dream or idea appears to have become less obtainable as time passes. The article itself is geared towards a population that, to quote the article, “haven’t saved a dime” for retirement, but I believe this article relates to a larger demographic who have been affected by layoffs, high unemployment percentages, or any other financial hardship that has caused a significant decrease or depletion of their bank and retirement accounts.

So if you have little to no money saved for retirement, there are some emergency strategies that you can start now to prepare.

The first thing to consider would be the Tax Code Catch-up provision, which allows individuals 50 years of age and older to increase their 401K and retirement savings plans contributions.

The second course of action would be to establish a new budgetary process and spend differently. Yes, it can be difficult to refrain from continuing bad habits, but starting a path of healthy financial decisions today can have a lifelong effect.

Lastly, and perhaps most difficult, would be a change in your expectations or adjusting your idea of retirement, including where you’ll retire. You may have to decide to retire later than expected, enjoy retirement in a state without a high cost of living, and change your plans of what you’ll be doing in retirement.

Simply put, you can still make decisions today that will help you afford a comfortable retirement tomorrow.



Attention IRA Owners Over 70 1/2


The American Taxpayer Relief Act of 2012 extended a “taxpayer friendly” provision for 2012 and 2013 which provides for a “qualified charitable distribution” from a taxpayer’s Individual Retirement Account (IRA). This provision, which had “sunset” at the end of 2011, was widely expected not to be renewed.

A “qualified charitable distribution” (QCD) is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70 ½ or over that is paid directly from the IRA to a qualified charity. An IRA owner can exclude from gross income up to $100,000 of a qualified charitable distribution made for a year, and the “QCD” can be used to satisfy any required minimum distributions from the IRA for the year. The amount of a QCD excluded from gross income is not taken into account in computing your charitable contributions for the year. In other words, there is not a benefit.

The IRA owner can treat a contribution made to a qualified charity in the month of January 2013 as a 2012 qualified charitable distribution in either of the following circumstances: