Retirement Planning is something that is continuously pushed aside because it is negatively associated with endless amounts of planning. When did planning become such a bad thing and why do people avoid it?

Having a plan in place can help situations, such as Covid-19 not as scary financially if something like that were to happen again.

With how this year is going, no one knows what could happen tomorrow or even in the next 5 minutes. Contributing to a retirement plan can help make tomorrow and the next 5 minutes of your future financially solid.  

Consulting with an accredited financial advisor can ease the frustrations about planning. In time, you’ll hopefully find a financial advisor that you can trust with your hard-earned wealth and allow them to help with the daunting task of planning your retirement.

The benefits of planning for retirement are so great that you should be excited to get started!


Benefits of having a retirement plan

Below are some benefits of having a retirement plan:

  •  If it’s done now, you won’t have the headache of last-minute arrangements
  • You will have a plan in place so you can stop working when you are ready
  •  Contributions are usually tax deductible
  •  Planning options can be flexible when you start early
  • If you’re accustomed to a certain type of lifestyle, planning now can help eliminate any financial limitations in the future because you didn’t save enough
  • You could potentially retire earlier than anticipated
  •  Planning helps you allocate money toward your future and brings a halt to unnecessary spending
  • Greater security for you and your family in the future
  •  If you saved enough you have the potential to open your own business (if you’re willing to shoulder the risk)

Save Now, Spend Later!

Time management can’t be a valid excuse anymore; consult with an accredited financial advisor to help create a retirement plan that is personalized to your unique goals.

If you aren’t experienced or well researched in this area, consult with a financial advisor to help you find the right retirement plan for you. This is important because you don’t want to be penalized for switching or withdrawing your account too soon.


Different types of retirement plans:

Below are different types of retirement plans:

  •   Roth IRA or Traditional IRA

Pro: can choose to have your income tax-free now or tax free later


  • SEP Plans (Simplified Employee Pension) ***For self-employed individuals/small business owners***

 Pro: pre-tax contributions


  • Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)

Pro: Tax-deferred retirement account


  •  Defined Benefit Plans

Pro: Involves a fixed pre-established benefit for employees when it’s time to retire


  •  Money Purchase Pension Plans

 Pro: guaranteed retirement benefit


  • Employee Stock Ownership Plans

Pro: significant retirement benefits



Keep in mind that all investments involve risks and limitations. Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Investing involves risk and you may incur a profit or loss regardless of strategy selected.



Once you choose the right plan for you, it is better to decide how you want your money distributed to you early on. Do not mistake a retirement account for a savings account that can store your money in until the end of time. You cannot keep your retirement account indefinitely. You generally must start taking benefits out of the account when you turn 72 (If you’ve turned 70½ by January 1, 2020, then you have to take them out now.)

It is important to know what the required minimum distribution is, and the penalties associated with that. If you fail to withdraw from your fund when it reaches the required minimum distribution, your account will be taxed 50%.

The distribution minimum applies to accounts that are sponsored by your employer such as the following:

  • 401(k) plans
  •  SEPs (Simplified Employee Pension)



Any opinions are those of the author and not necessarily those of Raymond James.  The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.