If you need to take income from your savings to finance your retirement, take steps to ensure that you minimize taxes and maximize what you get to keep. Your unique financial profile will determine the most opportune time to use certain types of income, but from a general perspective, withdrawals from tax-deferred accounts such as Traditional IRAs and employer-sponsored (tax-deferred) plans should occur during the years when your income tax rate is lower. This will help to minimize the amount of income tax you owe on those amounts. Of course, if you are of required minimum distribution (RMD) age, you must satisfy your RMD amounts from those accounts regardless of your tax rate.

One of the best rules to remember is that there is no one-size-fits-all solution. It is very important to work with a financial planner and/or retirement counselor in order to design a solution that is ideal for you. It is essential that you start planning for retirement as early as possible, and that you rebalance your investment portfolio as often as is determined necessary by your financial planner.  

Tax law is subject to frequent change; therefore, you should review your tax situation with your CPA or tax professional. If you have questions about your tax deferred contributions, investment choices, distributions or have questions regarding your financial plan for retirement it would be prudent to consult with a retirement specialist. 

Sue Ricker is President of Ricker Retirement Specialists and a Registered Principal of Securities America, Inc. member FINRA/SIPC.  Ricker Retirement is independent of the Securities America companies.  Her office can be reached at 972-840-3764

Instead of using your savings to cover certain medical-related expenses, Medicare can be used to cover those amounts. Medicare provides hospital insurance for in-patient care and certain follow-up care, and medical insurance coverage for physician services that are not covered under the hospital insurance. It is available to individuals who are age 65 and older. (The age can be younger for individuals who are disabled or have permanent kidney failure). The medical portion of the insurance is available at a premium and is optional. Therefore, if you are covered under a health plan at work, you may not need the medical portion; or you can compare the cost and features of both and choose the one that is most suitable. The hospital insurance is available at no additional costs to you, as you have already paid for it as part of your Social Security taxes while you were working.

Even if you do not retire at age 65, you may still want to consider signing up for Medicare, as it may cost you more if you sign up later. For additional information on Medicare, see SSA Publication No. 05-10043.

Tax law is subject to frequent change; therefore, you should review your tax situation with your CPA or tax professional. If you have questions about your tax deferred contributions, investment choices, distributions or have questions regarding your financial plan for retirement it would be prudent to consult with a retirement specialist. 

Tax law is subject to frequent change; therefore, you should review your tax situation with your CPA or tax professional. If you have questions about your tax deferred contributions, investment choices, distributions or have questions regarding your financial plan for retirement it would be prudent to consult with a retirement specialist. 

Children are notorious mimics. A child can read unconscious signals in how you react to certain events and surmise and integrate your attitude into their personalities. If you have a negative attitude toward financial matters, chances are, your child will too.

 To measure what kind of attitudes you are passing on to your child, review this list of questions:

1. Do you throw away bills or statements unopened?

    

2. Are bills and statements the last thing you look at when the mail comes?

    

3. Do you have a regular time set aside for household budgeting?

    

4. Do you keep your bills and statements in an organized fashion?

    

5. Do you invest?

    

6. If you invest, do you often complain about the performance of your portfolio?

    

7. Do you have a regular schedule for monitoring and adjusting your investments?

    

If you are avoiding your own financial affairs, you could be passing your apprehension on to your child. Approach your finances with a positive attitude, and that attitude has to continue even when your child isn't in the room or they will know it's false.  Forcing yourself into a positive frame of mind may have an immediate effect on how successful you are at controlling your own finances. If you approach your monthly bills, budget or investments like an intricate, but solvable puzzle, it can prime you to think of clever ways to make things fit. You may know from experience that your attitude affects both the speed and quality of your decision-making, so people who put off dealing with their finances generally make worse decisions when they finally have to face the problems, whereas people who deal with them immediately not only identify problems earlier, but come up with better solutions. This may not result in you becoming a millionaire, but it will help you build a solid financial base.  

Allow your child to participate in some of the household spending decisions and encourage them to come up with ideas on how to save money.  You may be surprised that when your child is old enough to do his/her own budgeting, he/she will already have a positive "can do" attitude.  

Conclusion
If you do not cultivate a positive attitude about finances in your household, your child may become one of the many paycheck-to-paycheck people who think they can avoid expenses by leaving bills unopened. If you see signs of this behavior in your own financial life, you may already understand how hard it is to overcome this subliminal programming. Don't put your child through the same experience.

Tax law is subject to frequent change; therefore, you should review your tax situation with your CPA or tax professional. If you have questions about your tax deferred contributions, investment choices, distributions or have questions regarding your financial plan for retirement it would be prudent to consult with a retirement specialist. 

Procrastination - Many individuals are forced to postpone retirement because their retirement savings are not sufficient.  This may be avoided by starting to save early. The amount you will need to contribute depends on how soon you start your savings program.  

Thinking it's Too Late to Get in the Game - The most common reasons for starting to save for retirement late in the game include procrastination, starting over after a divorce, and not having the opportunity to contribute to a retirement plan until an advanced age. Regardless of the reason, thinking that it's too late will only compound the issue. Instead, you should look for ways to start saving. This may mean doing without items that are not basic necessities. It can be possible to achieve post-work goals, even if retirement is just around the corner.  

Missing Opportunities - While saving usually is challenging, there are opportunities that make it easier. Overlooking these opportunities and missing out on benefits are a big mistake. Employers that offer benefits under a 401(k) or SIMPLE IRA often include matching contribution features, but many employees fail to take advantage of this benefit because of a lack of awareness and understanding. Don't let opportunities to increase your savings pass you by. 

Not Considering Healthcare Needs - The need and cost for healthcare increases with age. Individuals who fail to implement contingency planning to cover health-related expenses could find that a large percentage of their savings must be used to cover these costs. Prevent this by ensuring you have adequate health insurance.  

Spending Too Much Too Soon or Too Late - Those entering retirement are often faced with the fear of spending too much too soon.  Caution should be exercised to ensure that your nest egg lasts throughout retirement. On the other hand, individuals who decide to splurge during their early retirement years with little regard for the future, may find their bank accounts running dry. 

Making Ineligible Rollovers to Your IRAs - Ineligible rollovers can mean having to pay severe penalties to the IRS. In addition, any taxable portion of the amount rolled over to your IRA must be included in your income for the year the distribution occurred. To ensure that this doesn't happen to you, know which assets are not rollover-eligible.  

Making Excess Contributions to Your IRA - IRA contributions are limited to the littlest of 100% of eligible compensation or the contribution limit for the year. Should you contribute more than the allowable limit to your IRA, you must remove this excess amount from your IRA by the applicable deadline or it will not be able to be deducted on your tax return. 

Making Ineligible Roth Conversions - A Roth conversion is viewed by many as a good financial planning move because earnings accrue on a tax-deferred basis, while distributions are tax-free, if qualified. However, not everyone is a good candidate for a Roth conversion.  Consult a financial advisor for professional advice. 

Failing to Distribute Your RMD - You must begin taking RMDs from your Traditional, SEP and SIMPLE IRAs, qualified plan, and 403(b) accounts the year you reach age 70.5. Failure to distribute your RMD by the applicable deadline will result in you owing the IRS an excess accumulation penalty of 50% of the RMD shortfall. 

Engaging In Prohibited Transactions - You are prohibited from using your IRAs in certain transactions. For example, your IRA cannot be used as a loan, serve as security for a bank loan, or be used to invest in collectibles.

Tax law is subject to frequent change; therefore, you should review your tax situation with your CPA or tax professional. If you have questions about your tax deferred contributions, investment choices, distributions or have questions regarding your financial plan for retirement it would be prudent to consult with a retirement specialist. 

Sue Ricker is President of Ricker Retirement Specialists and a Registered Principal of Securities America, Inc. member FINRA/SIPC.  Ricker Retirement is independent of the Securities America companies.  Her office can be reached at 972-840-3764. 

Every generation has its challenges. As boomers, one of our biggest is caring for our long-lived parents, providing both physical and sometimes monetary assistance, even as we're putting our own children through college and grad school.

• Making hasty decisions without adequate research

• Having insufficient time to read and analyze the "fine print" in contracts

• Not having adequate insurance coverage or assets in times of need