How much money will you need for your retirement? Not only is this a tricky question, but even when you find the answer there are various means you can use to accumulate enough funds to live comfortably after you’ve stopped working. Our financial planning experts can give you all the options - and let you decide the path to take.

You’ll notice on the ROI Group Financial Pyramid that retirement planning is in the middle. This is because after building your emergency fund and protecting yourself and your family, it’s important to start thinking about retirement dollars – even though the age of retirement seems so far away.

We typically recommend that individuals save 15% of their income annually for retirement. We understand that putting away 15% of your income may be difficult at times in your life, you must decide if your in ability to save 15% is for legitimate reasons, i.e. to build your emergency fund, to fund insurances, or possibly some unforeseen expense such as illness, injury, or to care for a loved one.

The caution is to be “honest” with yourself. For example: Purchasing a new car because you feel your five-year old car does not represent your success is not a legitimate reason for short-changing your retirement savings. That is why the Retirement section of the pyramid is prior to the Brokerage and Fluff levels of the pyramid. Once your income can afford you the new car and you are able to save 15% for retirement, then you can worry about items that are for short-term pleasure.

Every year your retirement plan may change, and that is not unexpected. Having a retirement goal and understanding what will be needed in today’s dollars to live that lifestyle and then learning ways to fund that retirement lifestyle is challenging and should be discussed with an expert. There are a plethora of retirement vehicles that most people would never think to pursue.  Retirement funding is much like investing in the market: Diversification of income streams ensures that you are less likely you outlive your retirement savings.

The team at The ROI Group offers complete retirement planning services. These include:

  • Educating you on the options you have
  • Advising on the pros and cons of every option related to your financial path and goals
  • Implementing the vehicles you choose
  • Reviewing your plan and strategizing for changes that may take place in your life or through your retirement vehicles
  • Executing your plan when the time comes

Below we’ve outlined some of the vehicles you can use for retirement. Some of these you’ve heard of before, and there certainly are others, but most sound financial plans include these options in their retirement portions.

Important: Please contact us to schedule a free, no obligation meeting with one of our Retirement Planning experts to discuss your financial goals and where you see yourself after retirement.

If you feel comfortable with the retirement planning vehicles you have in place, see how The ROI Group might be able to help you with more advanced financial situations, including Brokerage Accounts, Insurance, Savings and Wealth BuildingCollege Planning, and Older Adult services (including Medicare planning).

For more insight into investment and wealth-building paths that could help you retire easier, take our brief Financial Risk Tolerance Survey or Personal Wealth Index Survey. The answers of these will help you with your blueprint and investment strategy as you work with your financial advisor.

Traditional Individual Retirement Account (IRA)

A Traditional IRA allows you to contribute money to save for retirement. You may contribute pre-tax or after-tax dollars, and money can grow tax-deferred – meaning you don’t have to pay taxes on the growth of the money in the account, just when you take the money out at a later date.

If you withdraw money from a Traditional IRA at age 59 or before, you are required to pay taxes as well as a 10% penalty. Withdrawals taken at age 59-and-a-half through age 70 are only taxed, there is no penalty. And once you reach age 70-and-a-half, you are required by law to take a withdrawal/distribution (Required Minimum Distributions).

The tax implications, functions, and rules of Traditional IRAs also may be come into play depending on how much money you earn. Our financial and retirement planning experts can help you navigate all scenarios.

Roth Individual Retirement Account (IRA)

A Roth IRA is a special type of account that allows you to contribute money towards retirement in which the IRA is funded by after tax dollars, but not coming out. This means that you don’t have to pay taxes on money withdraw later in life.

There are no up-front tax deductions for Roth IRA contributions. However, you can withdraw money you’ve contributed (not the interest earned on your money) whenever you want, tax-free and penalty-free.

There are various benefits to Roth IRAs and situations in which they might be a solid option for you and your family. We can help you walk through whether a Roth IRA is right for you, based on your current and expected income level, assets, and more.

Simplified Employee Pension (SEP) Individual Retirement Account (IRA)

Most commonly known as a SEP-IRA, these vehicles allow business owners to contribute to their own and/or their employees’ retirement savings.

Funds are contributed to accounts by the employer,  associated with each individual employee. For the most part, the same tax, investment, and withdrawal rules apply for SEP-IRAs as they do for Traditional IRAs.

Learn more about SEP accounts at

Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Account (IRA)

SIMPLE IRAs are similar to SEP-IRs in that they are both vehicles for employers to help their employees. They are both similar to set up, cost-effective, and do not require IRS reporting.

There are differences, however, such as the fact that companies (with 100 or less employees) use SIMPLE IRAs if they want to fund the bulk of their employees’ retirement. Also, SIMPLE IRAs generally deal with the “matching” element you might hear about.

If you are a business owner interested in setting up or learning more about these types of retirement vehicles, please contact us.

Rollover Individual Retirement Account (IRA)

A Rollover IRA is a Traditional IRA that comes into play when you change jobs and need to move money accumulated in an employee-sponsored retirement plan, such as a 401(k).

In general, there are no tax implications if you push all of your money into a Rollover IRA and in fact often offers a much larger universe of investments to choose from. There could be implications, however, if you move the funds into a Roth IRA.

We field questions daily from individuals who have been contacted by their previous employer about moving their retirement accounts, and can walk you through what options you have if you are in this situation.

401(k) Plans

This type of retirement savings plan is sponsored/set up by an employer for you, the employee. This vehicle allows you to put money away for retirement before it is taxed. Later, when you withdraw funds, you are taxed.

These types of plans came to be because employers found that they were over promising the amount of guaranteed income and the way they had invested the pension money was not growing at a sufficient rate to support the guaranteed pensions. Therefore they shifted the “risk” to the employee With 401(k) plans, you can control how your money is invested, but it’s recommended that you work with a financial advisor to help you pick the funds (mutual funds, stocks, etc.) based on your age, risk tolerance, and more.

403(b) Plans

A 403(b) plan is a retirement plan that is similar to a 401(k), but reserved for certain types of employees. You might bie interested in a 403(b) plan if you work at a public school or a tax-exempt non-profit organization.

Employers may elect to help fund their employees’ 403(b) plans, or employees can fund themselves. For employees, they can reduce taxable income if they fund this type of play with pre-tax dollars. Those people with 403(b) plans also have the opportunity to take loans from their account if needed, such as in the case of emergency.

457 Plans

If you are a government employee (or work for a qualified non-governmental employer), you might select a 457 plan as a savings vehicle. Sometimes, these plans are used to supplement other retirement vehicles .

Contributions to 457 plans are made pre-tax, and your investments grow tax-deferred. Typically, withdrawals are subject to income tax, though unlike a Traditional IRA there is no penalty for early withdrawal.

Defined Benefit Plans (Pension Maximization)

This type of plan, usually referred to as a Pension, is a retirement plan set up and sponsored by an employer. The employer takes on administration of the portfolio and investment risk for the plan, which the employees are a part of.

These plans are “defined” because there are formulas that calculate the employer’s contribution amounts ahead of time. Also, the plan guarantees a specific benefit (usually a payout) upon retirement.

Often, pensions do not offer the most favorable annual income for a retiring employee.  The ROI Group can help you determine the best ways to maximize your pension, especially when thought of related to other retirement vehicles, insurance policies, and more. Contact us to discuss your pension or retirement accounts.


Note: Diversification and asset allocation strategies do not assure profit or protect against loss. Roth IRA distributions tax free if made 5 years after the initial contribution to the plan and you are over 59 1/2. Please be sure to speak to your advisor to carefully consider the differences between your company retirement account and investment in an IRA. These factors include, but are not limited to changes to availability of funds, withdrawals, fund expenses, fees, and IRA required minimum distributions.

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