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Retirement Plan Considerations at Different Stages of Life

Retirement Plan Considerations at Different Stages of Life

Throughout your career, retirement planning will likely be one of the most important components of your overall financial plan. Whether you have just graduated and taken your first job, are starting a family, are enjoying your peak earning years, or are preparing to retire, your employer-sponsored retirement plan can play a key role in your financial strategies.

How should you view and manage your retirement savings plan through various life stages?

Throughout your career, you may face other important decisions involving your retirement savings plan. For example, if your plan provides for Roth contributions, you'll want to review the differences between these and traditional pre-tax contributions to determine the best strategy for your situation. While pre-tax contributions offer an up-front tax benefit, you'll have to pay taxes on distributions when you receive them. On the other hand, Roth contributions do not provide an up-front tax benefit, but qualified withdrawals will be tax free.1 Whether you choose to contribute to a pre-tax account, a Roth account, or both will depend on a number of factors.

At times, you might face a financial difficulty that will tempt you to take a loan or hardship withdrawal from your account, if these options are available in your plan. If you find yourself in this situation, consider a loan or hardship withdrawal as a last resort. These moves not only will slow your retirement saving progress but could have a negative impact on your income tax obligation.2

Finally, as you make decisions about your plan on the road to retirement, be sure to review it alongside your other savings and investment strategies. While it's generally not advisable to make frequent changes in your retirement plan investment mix, you will want to review your plan's portfolio at least once each year and as major events (e.g., marriage, divorce, birth of a child, job change) occur throughout your life.

Where are you in your life stage?

  • Just starting out?
  • Getting married and starting a family?
  • Reaching your peak earning years?
  • Preparing to retire?

Download our eBook Retirement Plan Considerations at Different Stages of Life to learn more.

1Qualified withdrawals from Roth accounts are those made after a five-year waiting period and you either reach age 59½, die, or become disabled.

2Withdrawals from your employer-sponsored retirement savings plan prior to age 59½ may be subject to regular income taxes as well as a 10% penalty tax (unless an exception applies).

All information herein has been prepared solely for informational purposes only and opinions are subject to change. Past performance is not indicative of future results and all investments involve the risk of loss of principle. For information on how these general principles apply to your situation, consult an investment professional.


Article Topic Specialist: Peter Jelacic, CFP®

Pete is a Principal with SVA Wealth Management, LLC.

With more than 30 years of experience in the financial industry, Pete provides comprehensive financial planning and investment management designed to help his clients reach their goals.

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