This is the phase that everyone wants to talk about but few do anything about. The news and popular media talk about wealth and the trappings that go along with it. Popular culture, movies and entertainment tout the benefits of large houses, cars and expensive toys. Rarely do they talk about true wealth and how to accumulate it.
If you participate in an employer-sponsored retirement plan or an individual retirement plan, you may be eligible for a tax credit.
This credit used to be known as the Retirement Savings Contributions Credit (RSCC). It is now known as the Savers Credit and applies to individuals that meet the following income and filing status:
• Income of up to $26,000 and single filing status
• Income of up to $39,750 and Head of Household filing status
• Incomes of up to $53,000 and Married Filing Jointly filing status
Other criteria to be eligible are at least 18 years of age, not a full-time student and cannot be claimed as a dependent on another person’s tax return.
Contributions to a qualified 401(k), IRA, and other eligible retirement plans, will allow you to take a credit of up to $1,000 for single status or up to $2,000 if filing jointly. This credit is based on a percentage of the qualifying contribution amount.
In order to calculate this credit, you must first subtract the amount of any distributions received from the retirement plans from the contributions you have made. This applies to distributions starting two years before the year the credit is claimed and ending with the filing deadline for the tax year.
The RSCC is in addition to other tax benefits which may result from the retirement contributions. The following forms may be found a www.IRS.gov :
• Form 8880, Credit for Qualified Retirement Savings Contributions
• Form 1040, U.S. Individual Income Tax Return
• Form 1040A, U.S. Individual Income Tax Return
• Publication 590, Individual Retirement Arrangements (IRA)
The following questions are designed to determine an investment allocation that will help you meet your goals in a manner that you will be comfortable with. After answering these questions you should be able to determine an investment allocation that will suit your needs.
Circle the number that best matches you answer. Add the values to determine your score.
I. How long before you will need these dollars to achieve your goal?
1. Fewer than 3 years -1 point
2. More than 3 but less than 5 years – 3 points
3. More than 5 but less than 10 years – 6 points
4. More than 10 but less than 15 years – 9 points
5. Longer than 15 years – 11 point (more…)
This site is intended to provide access to Free Retirement Plans based on input provided by the user. All information gathered and delivered is held in strict confidence. The tools provided by this site are not intended to give legal or financial advice. Retirement Plans generated by the system are intended as information only to assist individual in the easy design and management of their own personal retire goals. The Retirement Plan Wizard output is not licensed for resale and is not intended for use by commercial concerns or personal financial advisers.
