A graduate of American University, where he earned his degree in accounting and finance, Barry M. Kornfeld is able to draw on both his education and extensive experience to serve as a financial advisor for senior clients. Working as the principal of First Financial Tax Group, Barry Kornfeld offers clients information about fixed-income alternatives, such as First Position Commercial Mortgage notes (FPCMs), which can help them meet their retirement income needs.
To prepare for retirement, regardless of your current age, you need to understand your income and how it will change once you leave work. Here are some useful tips.
1. Account for the expenses that are currently being covered by your employer, such as health insurance premiums, as these will become your expenses once you leave the workplace.
2. Aim to save 18 to 20 percent of your current income each year so you have a nest egg put aside. According to U.S News Money senior editor Kimberly Palmer, the Employee Benefit Research Institute has estimated that people contribute an average of 7.5 percent of income into any form of retirement savings account, which can leave them unprepared for the prospect of rising healthcare costs and other retirement-related expenses.
3. Account for taxes on all income streams outside of Social Security, particularly if you have a 401k or IRA, as your tax rate in retirement may be higher than you anticipate.
Based in Boca Raton, Florida, financial advisor Barry M. Kornfeld serves as the principal of First Financial Tax Group, which offers a wide array of growth, income, and tax services and strategies. In his work, Barry M. Kornfeld helps individuals assess their retirement income needs and find the right solutions to achieve those goals.
Recent surveys indicate that Americans are inadequately prepared for retirement, both in research and actual savings. A recent poll conducted by the Transamerica Center for Retirement Studies shows that only 10 percent of Americans have taken the time to estimate the income they will need for retirement.
Additionally, that survey shows that most people expect Social Security to be their only means of income in retirement years. Most Americans also plan to work past retirement age in order to save extra retirement funds, but don’t really have an established plan for how much they will save or how to go about it.
Another survey conducted by GoBankingRates shows that one in three Americans have absolutely no money set aside for retirement at all, and an additional 23 percent report having only $10,000 set aside.
What all this data suggests is that Americans as a whole are woefully underprepared for their financial needs in retirement. This only serves to increase the importance of seeking advice from an experienced, capable retirement planning professional.
Taxes and Retirement
Possessing three decades of experience in retirement planning, Barry Kornfeld is the co-founder of First Financial Tax Group. Through his firm, Barry Kornfeld focuses on tax planning and income optimization to maximize clients’ wealth.
Plan a retirement that limits tax implications by opening a Roth individual retirement account (IRA) and downsizing your home. A Roth IRA allows you to save a sum of money that has already been taxed. Available through numerous financial institutions, the account gives you the option to withdraw funds at the age of 59 and a half without paying additional taxes. If you decide to access the funds earlier, be aware that a 10 percent penalty may apply.
During retirement, you may discover that the size of your home exceeds your needs. Downsizing is a reasonable solution to reduce costs associated with maintenance. Furthermore, if your mortgage is paid in full, selling can increase wealth with little to no tax. Use the money to supplement your retirement income or invest it for future gains. It is best to discuss this option with a tax professional to ensure you comply with Internal Revenue Service regulations.