Forward focus - MFS Investment Management

4 An IRA lets you draw on your money for whatever reason as long as you are willing to pay a federal tax penalty of 10% ... CATCH-UP CONTRIBUTION PER PERSON IF OVER 50 .... For the purpose of this illustration, lump-sum distributions.
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MFS® Retirement Strategies Traditional and Roth IRAs

FORWARD FOCUS Accumulating wealth for retirement

ASSESS YOUR NEEDS

TAKE CONTROL OF YOUR FINANCIAL FUTURE

With more people living well into their 80s and beyond, you could spend one-third or more of your lifetime in retirement. Will your current savings and future income sources carry you through? Fortunately, today’s tax-advantaged Individual Retirement Accounts (IRAs) could help you build the wealth you will need to meet key financial needs in retirement. You will find that IRAs could be a great way to • receive a regular stream of income during retirement • keep your retirement savings potentially growing tax deferred • minimize taxes on your retirement savings • create a legacy for your heirs

This material is not intended to replace the advice of a qualified professional. Before making any financial commitment regarding the issues discussed here, consult a professional advisor. MFS® does not provide legal, tax, or accounting advice. Any statement contained in this communication (including any attachments) concerning US tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This communication was written to support the promotion or marketing of the transaction(s) or matter(s) addressed. Clients of MFS should obtain their own independent tax and legal advice based on their particular circumstances.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Income sources of the average American retiree1

33% 46% 21%

33% 46% 21%

Social Security

Other sources

Pensions

Start here. Finish strong. Financial planning experts believe you will need approximately 80% of your peak preretirement income to maintain your current lifestyle in retirement.2 If your peak income is $50,000, then you may need $35,000 or more each year. When you multiply that annual figure by your expected years in retirement from the table at right,3 you may find you are going to need more than you have planned for.

LIFE EXPECTANCY

MALE

FEMALE

At age 65

18.0 years

20.5 years

At age 75

11.2 years

13.0 years

The more time you take now to focus on your future financial needs, find the right IRA for your situation and put a carefully planned strategy in motion, the more influence you could have on the kind of retirement you may be able to enjoy later.

Source: Facts and Figures About Social Security, 2016. Source: Employee Benefit Research Institute (ebri.org) Issue Brief, February 2012 (the latest data available). 3 Source: U.S. Center for Disease Control, National Vital Statistics Reports, Vol. 65, No. 4, June 30, 2016. “Life expectancy at selected ages, by race, Hispanic origin, race for non-Hispanic population, and sex: United States, 2014.” 1 2

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CONSIDER YOUR OPTIONS

AN IRA FOR EVERYONE

How can an IRA help me take control of my financial future? Roth and traditional IRAs are accounts that individuals can use to save for their own retirement. Virtually all wage earners — including active participants in companysponsored retirement plans and the self-employed — are eligible to open an IRA. While each IRA has unique rules and is designed to help meet the needs of certain investors, all offer benefits that could really add up over the long term:

• a smart way to put more money aside for retirement • tax-deferred growth potential • access to your assets at all times4

Which IRA is right for me? When choosing between a traditional and a Roth IRA, you may want to figure out how much you will have in after-tax dollars at retirement in each situation. For many people, especially those with longer-term time horizons, a Roth IRA’s tax-free withdr