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How safe is your retirement account?

Updated: Jun 23, 2022

Most people have sat in the Human Resources department office to fill out the company retirement plan account opening form when beginning a new job. The human resources staff will brief you on the advantages of the company retirement plan before you fill out the form.

Employer matching? Free money? Sign me up!

Tax deferral of contributions? Who doesn't like a tax break here and there?

High contribution limits? Sounds good to me.

You fill out the form, quickly make your investment selections (most people choose the target date fund based on the year they will retire), and hand it in with a smile before rushing off to start your new job. After that, the only time you really think about your retirement account is when you receive your statement in the mail and look to see whether your investments have gains or losses.

Sound familiar to you? You are not alone.

How much risk are you exposing your hard earned money to? We know that all investments have some degree of risk. Everyone is exposed to systematic risk. Systematic risks such as interest rate risk, market risk, and inflation risk can not be avoided or diversified away.

Unsystematic risks/company-specific risks such as; financial risk, operational risk, strategic risk, business risk, and legal/regulatory risk can potentially be avoided if you are using a competent advisor. Your advisor should select investments that are suitable for your investment objectives and properly hedge the amount of downside volatility you are comfortable with.

Another type of unsystematic risk is taxation risk. Taxation risk is defined as the chance that tax rules may change resulting in losses due to higher than expected taxes. Businesses and individuals that do not plan for taxation risk end up paying the most taxes. Who wants to pay the most taxes? Not me!

Take the quiz below to see what your retirement account risk IQ is.

Ed Slott’s Risk IQ Quiz
Download PDF • 353KB

Are you surprised by your results?

Did you know that there are strategies to structure your retirement accounts so that you pay less taxes to preserve your hard earned money for your needs in retirement and your loved ones?

We are members of Ed Slott's Elite IRA Advisor Group and attend at least two live workshops a year and receive ongoing training from Ed Slott and his team of IRA experts. We are updated with tax law updates as soon as they are released along with new retirement and estate planning strategies. We receive in depth training on tax issues and strategies that most advisors don't.

A few of the many things that we can help you understand are:

  • How much of your retirement account will be going to Uncle Sam in the form of taxes when you retire? How can you decrease your tax liability?

  • Did you know that there are other types of retirement accounts you can have on top of the retirement plan that your company offers?

  • Your company doesn't offer a retirement plan? You can still save for retirement in tax advantaged retirement accounts!

  • Are you worried about not having enough money to retire?

Unfortunately, many Americans don't start planning for their retirement until they are close to retirement. Why not start now? It is never too early to start saving and planning for retirement.

Choose a competent and proactive advisor who is up to date on the most recent tax law changes and retirement & estate planning strategies to help you plan for your future. Give us a call!

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