Westchester County Business Journal Q&A from the Corner Office
Q&A from the Corner Office
A common thread of knowledge these days is, “When in doubt, save.” Michael Ryan, president and CEO of Gilman Ciocia Inc. in Poughkeepsie, a tax preparation and financial planning firm, discussed the to-do’s of retirement savings.
Q: “What are the top priorities for business people in retirement planning?”
Ryan: “Setting aside an adequate emergency reserve and investing for a secure retirement are goals that should be high on everyone’s list. It is estimated that you’ll need upward of 70 percent of preretirement income to maintain your standard of living when you stop working. With increasing life spans, retirement could last to age 90-plus. Social Security benefits currently provide only 40 percent of preretirement earnings.
“Map it out: Develop a savings plan with a trusted tax and financial planning advisor. Retirement planning should always consider individual income needs. Because of this volatile and rapidly changing financial market, Americans need to reassess their retirement needs. Choose the best mix of investments for your savings based on your risk tolerance and objectives. Retirement accounts can offer substantial tax advantages and provide you with opportunities to benefit from the powerful effects of compounding.
“Start early or catch up: If your employer offers a 401(k), sign up immediately and contribute as much as you can! In 2009, you can contribute up to $16,500 or $20,500 for employees age 50 plus. In the case of self-employed individuals, a SEP (Self-Employment Pension) may be a viable option. In traditional IRAs and Roths, you can contribute up to $5,000 a year, or $6,000 age 50-plus. A good tax and financial advisor can help you determine whether a Traditional or Roth IRA is best for you and based on differing tax advantages that each offers. An advisor can also help navigate the myriad of tax laws changes.
“Don’t forget about adequate life insurance, disability income replacement insurance and long-term care coverage. Now is a good time to examine these priorities as well to safeguard your future. There is no one-size-fits-all plan. Your plan should be tailored to your needs. Making solid decisions today can help you to be better prepared for your financial future.”
The Web site is www.gtax.com.
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