DuPont Wealth - June 2018

AreYou MakingThese 3 Common Mistakes WithYour IRA?:

Why IRAs Are So Important

Let’s get right to it:

Mistake #1: FailingTo Maximize Contributions

Nowadays, IRAs are more important than ever. According to a study, 34.8% of U.S. households owned at least one type of IRA as of mid-2017. That’s not surprising, because IRAs come with many advantages compared to other forms of retirement savings. For instance:

According to a 2013 study by the Employee Benefits Research Institute, the average IRA balance for people ages 60–64 was only $165,139. While this may sound like a lot, it may be far short of what it takes to achieve your goals in retirement.

• IRAs typically come with a wider range of investment options than, say, a 401(k).

Mistake #2: ChoosingTheWrongType Of IRA

• IRAs bring significant tax advantages. (As previously mentioned, contributions to traditional IRAs are often tax-deductible, while withdrawals from Roth IRAs are tax-free.) Unfortunately, many would-be retirees fail to get the most out of their IRA. As a result, they may not have as much in retirement savings as they would otherwise.

While all IRAs come with tax benefits, the type of benefits depends largely on the type of IRA. For example, contributions to traditional IRAs are often tax deductible; however, the withdrawals you make from your IRA after retirement are taxed as regular income. Contributions to Roth IRAs, meanwhile, are not tax deductible, but withdrawals are tax-free. It’s important you choose the right type of IRA based on your specific tax situation. Otherwise you could end up paying more in taxes than you need to — either now or after retirement. IRAs often come with a wide range of investments, but not all investments are created equal. Too often, people fail to pay much attention to how the funds in their IRA are invested. Sometimes they may be too risky, subjecting you to a greater probability of losing your hard-earned retirement savings. Or your investments may be too conservative, meaning you won’t be able to grow your money the way you need to fund retirement. Mistake #3: Choosing Improper InvestmentsWithinYour IRA

So how do you know if you’re getting the most out of your IRA?

That’s the reason for this article. As your IRA or Roth IRA are such important parts of funding your dream retirement lifestyle, let’s you and I get together to look at:

• Whether your investments fit your personal risk tolerance

• Whether the type of IRA you own is right for your personal financial situation

• How much in savings you really need to reach your retirement goals

All investing comes with risk, of course, but ensuring your investments contain the right level of risk for you is a key part of saving for retirement.

What I would like to offer you is a fresh look at whether you’re getting the most out of your IRA — and if not, what you can do to fix it.

So call us at 614.408.0004. There’s no cost or obligation. We’ll do an analysis of your IRA, and if everything looks great, I’ll tell you so! But if there’s anything you can do to get more value out of your IRA, we can have a continued discussion about the steps you need to take. We believe that we have a duty to our clients, friends, and their loved ones to make sure they have the guidance they need to navigate the murky waters of retirement planning. That is why we offer this no-obligation second-opinion service to the recipients of this newsletter.

Why Making Any Of These Mistakes Can Be Costly ForYour Retirement Plans

Imagine two people. Both are hard workers with high-income jobs. Both have good credit ratings, savings habits, and little debt. Both saved for retirement using some type of IRA. And yet when retirement comes, one has the means to achieve all her financial goals while the other merely gets by.

Why IsThis?

1. “Additional Data on IRA Ownership in 2017,” Investment Company Institute, December 2017.

There are many possible reasons, but here’s a BIG ONE:

One person got the most out of their IRA and the other didn’t.

2. Craig Copeland, “Individual Retirement Account Balances, Contributions and Rollovers, 2013,” Employee Benefit Research Institute, May 2015.

The question you have to ask yourself is — which person are you?

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