Weigh Your Options For Saving And Investing
Theres more than one way to save and invest as you build wealth for the future. For example, you could save money for retirement using:
- 401 plan or similar workplace retirement account
- Traditional and Roth individual retirement accounts
- Taxable brokerage accounts
- Savings, money market and CD accounts
- Health Savings Accounts
A 401 plan may be your first option for saving, owing to its tax advantages and the potential for employer matching. Contributions to a traditional 401 can reduce your taxable income, growth is tax-deferred and you pay taxes at your ordinary income tax rate on qualified withdrawals. The same rules apply to traditional IRAs as well as SIMPLE and SEP IRAs.
A Roth IRA, on the other hand, offers no tax deduction for contributions but you can make qualified withdrawals tax-free. With a taxable brokerage account, youre subject to capital gains on earnings. Savings, money market and CD accounts are also taxable but they can be good to have for keeping some of your retirement savings liquid.
Health Savings Accounts are not retirement accounts, but they can still be a part of your retirement plan. These accounts allow for tax-deductible contributions, tax-deferred growth and tax-free withdrawals when the money is used for qualified health care expenses, which can include long-term care.
Work With A Financial Advisor
Many Americans falsely believe that they will be able to live on less income when they retire because their spending needs will go down. But unpaid mortgages, unexpected health expenses, relocating to a retirement community and even checking off bucket-list goals like travel and adult education can eat your retirement funds fast. That is why working with a financial advisor early can help you create a multi-stage retirement plan that optimizes your investments and savings for your retirement goals.
A financial advisor can help you break up your retirement plan into actionable steps, like these:
Who Would Benefit From A Pcra
A PCRA is appropriate for knowledgeable, experienced investors who:
- Are seeking a wider range of investments
- Can dedicate more time to managing their investments
- Are comfortable making more of their own investing decisions
Schwab is restricted from providing advice on PCRAs however, your retirement plan may allow you to appoint an independent advisor.
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Just Your Average Joe With A Rollover Ira
I was very frustrated when I had learned my old employee rolled my IRA to a different financial group, then I look online and see all the horror stories about Principal Financial and their app. I had no choice but to find out for myself because thats where my money is. Let me just say Ive had zero problems with the app, zero problems with the company, and would recommend anyone who is on the fence about it to just try it for yourself. I was waiting to be disappointed and to my surprise Ive had nothing but a positive experience.
Start With Your Target Retirement Number
When mapping out your financial planning retirement strategy, it can help to work backward. That means figuring out how much money youll need to save for retirement first, then building your financial plan around actions that can get you to that number.
A retirement calculator can help you narrow down how much you may realistically need to have saved and invested. When estimating a target savings number, its important to ask questions like:
- What will your retirement lifestyle involve?
- How much will you need to meet your annual retirement budget?
- Where will your retirement income primarily come from, in terms of Social Security, a 401, IRAs, etc.?
- At what age will you begin taking Social Security benefits?
- How many years do you anticipate spending in retirement?
- Is working part-time in retirement or starting a business something youre interested in?
- How much debt do you anticipate having in retirement?
- Will you be providing financial support for adult children or grandchildren?
- Are you interested in creating a financial legacy of any kind?
These questions can help you set up accurate spending goals to ensure that you dont run out of money in retirement.
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Do The Math On Social Security
Social Security benefits can add to your retirement income. However, its important to think ahead about when and how you plan to use them.
Technically, you can begin taking Social Security benefits at age 62. But doing so can reduce the amount of benefits youre eligible to receive. Working while receiving Social Security benefits prior to reaching full retirement age, typically 66 or 67 depending on when you were born, can also shrink your benefit amount.
On the other hand, waiting until age 70 to take benefits could increase the amount you receive, up to 132% of your normal benefit amount. Whether it makes sense to take benefits earlier or later depends on the other sources of retirement income you already have and whether you plan to work at least part-time in retirement.
Don’t See The Topic You Need Help With
Give us a call.
- Retirement plan participants call 800-547-7754
- Mutual fund clients call 800-222-5852
- Everyone else call 800-986-3343
The subject matter in this communication is provided with the understanding that Principal® is not rendering legal, accounting, investment, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.
The Retirement Wellness Planner information and Retirement Wellness Score are limited only to the inputs and other financial assumptions and is not intended to be a financial plan or investment advice from any company of the Principal Financial Group® or plan sponsor. This calculator only provides education which may be helpful in making personal financial decisions. Responsibility for those decisions is assumed by the participant, not the plan sponsor and not by any member of Principal®. Individual results will vary. Participants should regularly review their savings progress and post-retirement needs.
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A Guide To Financial Planning For Retirement
When it comes to retirement, you cant afford to be unprepared. Having a clear idea of how you want to spend your later years, and how youll pay for it, are key to ensuring that you can retire comfortably and securely. Financial planning and retirement go hand in hand, covering a variety of different tasks and topics. Whether your retirement is a few years away or you have several decades to get ready, there are certain things youll want to add to your financial planning to-do list. A local financial advisor can also help optimize your plan to reach your retirement goals.
Looking For A Retirement Plan Loan
When bills or debt feel overwhelming, it can be tempting to consider borrowing against your account in a 403, 401 , or 457 plan. But the trade-offs can be steepand we want to make sure you understand them.
In the long run, you may pay more than the loan amount you withdraw, including:
- any initial set-up and quarterly loan fees,
- taxes you pay on the money you use to repay your loan, and
- interest paid to yourself based on loan interest rates over time.
In addition, you may miss out on some potential growth and compounding of your earnings, which can be a major advantage of long-term savings in an account under 401 , 403, or 457 plans.
To give you an idea, $20,000 in a 401 , 403, or 457 account could triple in 20 years at an average 7% rate of returnbut not if you withdraw it today.2
1 IRS annual limits for 2022.
2 Information is for illustrative purposes only. The retirement balance assumes a 7% annual rate of return on their savings. The assumed rate of return for the analysis is hypothetical and does not guarantee any future returns nor represent the return of any particular investment. Contributions do not take into account the impact of taxes on pre-tax distributions. Individual results will vary. Participants should regularly review their savings progress and post-retirement needs.
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Tax Benefits Can Help You Save More
Contributions to a 401 , 403, or 457 plan that come out of your paycheck on a pre-tax basis reduce your taxable income. Potentially, this could push you to a lower tax bracket, too.
In 2022, the yearly contribution limit increased to $20,500,1 but some plans may have a lower limit. Log in to check your plans details.
Update Your Personal Profile With Principal
1. How can you change your correspondence address and email address maintained in Principals record? You may perform updating of your personal details via My Profile on the top right corner. You will receive an OTP through your registered mobile number to submit any change request.
2. How can you change your mobile number maintained in Principals record?You may perform updating of your mobile number by contacting our Customer Care Centre at + or write in a request with supporting document such as your mobile statement to [email protected]
3. You submitted updates to My Profile. When will the change take effect?The change will take effect immediately.
4. Can you change the distribution instruction for your EPF scheme investment account?No, all distributions for EPF scheme investment must be reinvested into the account.
5. What should you do if you filled in your personal information incorrectly during the account opening with Principal?You may Login to perform update on your personal details via My Profile. You will receive an OTP through your registered mobile number to submit any change request.
6. If you change/update your personal details in Principals profile, will your EPF i-Akauns profile details be updated automatically too?No. You would need to effect change/ update your profile in Principal and in EPF i-Akaun respectively. Both entities maintained their customers record independently.
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Why Are All Medical Apps So So Terrible
I dont understand how these medical insurance companies dont have the ability to develop apps that are actually useful. If you are trying to find dental care with this app, good luck. Its probably one of the worst that I have ever used. The search function is really wonky and difficult to use, not to mention the availability of dentists that take this insurance is incredibly limited. When I do find one like 20 miles away, and I go off the app to check their reviews and ratings, not only are ALL of them rated three stars and under, but if I take more than one minute to locate the practice and check them out online before making an appointment, Im logged out of the app for my privacy. Its already such a pain trying to find appropriate care, this app is making it infinitely harder than it needs to be. Its gotta to be my sixth or seventh time having to log back in this morning going back-and-forth to check out different dental providers. There should be an option to keep you logged in, by your own choice – not by the app deciding youve been away too long because you take a minute to check someone out on Yelp. Ridic.
Investment And Insurance Products Are:
- Not Insured by the FDIC or Any Federal Government Agency
- Not a Deposit or Other Obligation of, or Guaranteed by Credit Union or Bank
- Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested
Principal®, Principal Financial Group® and the Principal logo design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and service marks of Principal Financial Services, Inc., in various countries around the world.
Insurance products issued by Principal Life Insurance Co. and Principle Life Insurance Co. Securities and advisory products offered through Principle Securities, Inc., Member SIPC. Principal National, Principal Life and Principle Securities are members of the Principal Financial Group®, Des Moines, IA 50392. Todd Anania, Principal National and Principal Life Financial Representative, Principal Securities Representative. 1969005-012022
Home Federal Savings & Loan Association of Grand Island is not an affiliate of any company of the Principal Financial Group®.
Principal Life maintains certificates of authority to transact insurance in all 50 states. Principal Life NAIC identification number is 61271. Principal National NAIC identification number is 71161.
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What Does A 401 Or 403 Plan Offer
- Automatic payroll deductions to help you make saving a habit
- Reduced taxable income, through pre-tax contributions
- Matched contributions, up to a certain percent
- Long-term savings and growth potential across a variety of investment options
If your employer offers a 401 , 403, or a governmental 457 plan with services through Principal®, enroll online now.
How To Register Log In And Manage Your Username And Password
Click “Log In” at the top of any Principal.com page, enter your username and password and click the Log in button.
If you havent yet registered to access your account information online, its no problem. Simply click Create an account, choose Individuals as your role and click Create an individual account button. Then, simply follow the instructions on the screen to create your personal login credentials.
Dont worry it happens! We can help you recover your username or reset your password online.
If you forgot your username:
- Go to the Forgot username page.
- Choose Individuals as your role and click Continue.
- Enter the email address you use to do business with us, and we’ll send you an email with your username.
If you forgot your password:
- Enter your username.
- We’ll provide you a verification code by text, voice call or an authenticator app. Which one we send it to depends on the option you registered.
- After you’ve correctly entered your code, you’ll be prompted to reset your password.
- You can then use this new password to log in to your account online.
You can also call us at 800-986-3343 for assistance.
Register online by following the steps below or .
Voice call is when we call you to provide a verification code. If you register for voice call, you will be asked to provide a phone number. The number you provide can be a mobile phone or landline phone.
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Consider Supplementing Your Financial Resources
In addition to saving and investing money for retirement, there are other financial tools you can add to your plan.
First, you could purchase an annuity. Annuities are insurance contracts that pay you back a set amount of money in exchange for a lump sum or monthly premium. An annuity can offer guaranteed, predictable income for retirement in addition to the money youre withdrawing from savings and investments or Social Security benefits.
Annuities do have pros and cons, however. For example, an annuity can be a costly purchase if you need to pay a large lump sum premium upfront. And the quality of an annuity is only as good as the insurance company that issues it. If the insurer isnt financially healthy, that could pose a risk if its not able to make your annuity payouts when the time comes.
Next up is life insurance. Life insurance is primarily designed to offer a financial benefit to your loved ones when you pass away. But some policies, such as whole life and universal life insurance, can also allow you to accumulate cash value. Thats money you could borrow against during your lifetime as an additional retirement income stream.
Doing so can deplete the death benefit of your life insurance policy if you dont pay back what you borrow. And permanent life insurance can carry more expensive premiums than term life insurance, which has no cash value. But its worth considering how a cash value policy could help round out your retirement plans.
How It Works:
- Your retirement plan provider must offer PCRA as part of your retirement plan in order for you to open an account.
- Your employer will determine if your retirement plan’s investment selection for PCRA includes only mutual funds or most available investments.
- You decide how much money to transfer from your retirement plan into your PCRA.
- You can invest your PCRA assets in any type of investment allowed by your retirement plan.
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