If you are a middle to low income earner, you can earn tax credits for depositing money into an IRA or 401K plan.  The Retirement Savings Contribution Credit will give you a tax credit of up to 50% of the money you deposit, depending on your income.If you are married and filing jointly with an income under $32,000 annually, you qualify at 50%of your annual investment.  If you are married and filing jointly with annual income above $32,000, but below $34,500, you qualify at 20% of your deposits.  If you are married and filing jointly with an income below $53,000, but above $34,500, you qualify at 10% of your investments.If you are single and earn under $16,000 annually, you qualify at 50% of your deposited amount.  If you are single and earn less than $17,250 annually, but more than $16,000, you qualify at 20% of your invested dollars.  If you are single and make more than $17,250 annually, but less than $26,500, you qualify for a 10% tax credit.If you are the head of household and earn less than $24,000 annually, you qualify at 50% of your invested money.  If you are head of household and earn more than $24,000 each year, but less than $25,875 annually, you will qualify at 20% of what you have deposited.  If you file as head of household and earn more than $25,875, but less than $39,750, your tax credit will be 10% of what you deposited.There is a maximum credit of $1000, so if you were able to make a generous contribution to your retirement account, you may not qualify for the full deduction.Contributing to a pre-tax retirement fund is a great way to save money on taxes now, whether you qualify for the Retirement Savings Contribution Credit or not, because none of the money is taxable going in. It is recommended that you consider consulting with a tax professional and have them file your return.  Filing an income tax return can ordinarily be a bit confusing, but due to all the tax restrictions and qualifications associated with retirement savings, your next filing could prove more difficult than it usually is if you have invested in retirement savings.  Tax professionals are trained on all the changes to the code and will know which ones will benefit you and exactly how you do or do not qualify to take advantage of them.

According to the latest retirement advice, the average American household has just $55,000 saved for retirement. Many people continue to believe that social security benefits or their companies will take care of their retirement financial needs.  However, the fact is that social security is at risk of insolvency and many corporate retirement plans are vanishing along with their companies. The bottomline? Individuals must start taking personal responsibility for and control of their financial futures RIGHT NOW!

Are you aware that when the U.S. Social Security Administration was originated back in 1935 that the United States Government expected benefit payouts to be minimal at best? And with good reason!  At the time (1935), the average American’s life expectancy was just 62 years of age.

At what age do you think an individual became eligible for social security benefits back then? The answer is 62 years of age!  So, you can see why the government was pretty confident that their financial liability for this program was limited at that time.

But guess what?  The age for social security benefits eligibiliy is still 62 years of age.  However, the average life expectancy in the United States is now 78 years of age!  This is the source of the financial crisis that the Social Security Administration is faced with.  We are living longer, and as a result, millions of people are now qualifying for benefits at an alarming rate and cost.

Somehow, the government never really saw this coming before it was too late.  Based on the original design in 1935, social security benefits are funded from the government’s annual budget.  And, we all know by now that the total U.S. budget deficit is now in the 10’s of TRILLIONS of dollars.

The result of this situation is that the government has been and will continue finding ways to shift the costs of retirement benefits back on me and you.  For example:

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Retirement Advice:

Please take the following retirement advice very seriously.  If you are one of the folks who continues to believe that social security benefits or your company’s retirement plan is going to take care of you through your golden year — review the facts.  This situation is real.

We all need to take responsibility and control of our financial futures RIGHT NOW. This is a big step for many people, but there is FREE retirement advice & help available if you will just seek it out.

Most of us will live through to retirement and when we do we will need an income to continue living.  The government does have a limited safety net for you in social security but you do not want to live in retirement on this meager amount of income.  Whilst you have the capacity to earn, you need to invest into your retirement, a tax effective way to do that is by the 401(k). Like any investment you could reap substantial rewards or suffer some significant losses. It is extremely important to pay attention to the 401(k) investments you have and take appropriate action of moving them when it looks like you could see some losses coming.

Most people know what a 401(k) is but if you don’t know what it is, it is basically giving your employer permission to invest some of your paycheck into a retirement fund before tax is taken out.  The two benefits here is the investment you are making with your future and that you are doing this with a tax advantage that makes it even more attractive.  The tax advantage here is that your investment is larger and that has a snow ball effect on accumulating more retirement funds. When it comes time to pay the tax at the withdraw time of retirement, you retirement income is so much greater, than if you paid tax before you invested into the 401(k).

When you negotiate your terms and conditions of employment you should also seek to have the employer contribute to your 401(k) retirement fund which again is advantageous to you and also to them as they can claim this as an expenses of business.

With some 401(k) plans you can withdraw funds prior to retirement, you need to check whether you 401(k) will allow you to do this. Usually you will have to pay tax on any early withdrawals.  You have the ability to choose your investments with your 401(k). Broadly these investment choices fall under these high level categories of fixed funds, mutual funds and company stocks.  You should be aware that sometimes your employer can decide that your 401(k) will be invested in different choices that you have selected. This usually happens when the employer changes the investment company, through a process called re-enrollment. You do have some safeguards here where in general you are entitled to receive 30 days notice before the change takes effect.