7 Times to Reevaluate Your IRAs

Life Changes, Job Changes, when is it a good time to check in with your retirement accounts?

Many people sign up for the retirement plan offered by their employer, and then never really think about it again. But if you have changed jobs, Married or Divorced, or if you have added to your family through birth or adoption you need to double check to make sure you are still on point to protect your retirement. If your minor child has started earning money with a summer job, you can even help them get started early by contributing to an IRA for them.

Let’s take a look at seven good times to take stock of your retirement accounts.

Changes in Relationships

When was the last time you checked your beneficiaries? Did you marry that amazing person that you met at work, or maybe you finally tied the knot with your childhood sweetheart? Or did you divorce? Its important to remember that the individuals that you list on your beneficiary designation form will override your estate if you pass away without making changes. If your ex is still listed as the beneficiary, they will inherit your IRA even if you have since remarried or prefer to leave your IRA to your children or grandchildren. It’s a good idea to check your beneficiaries regularly.

Birth or Adoption

Did your family grow a bit. Did your family grow a lot? If you choose to list children or grandchildren as beneficiaries you will need to make sure you remember to add them if you want to share your financial legacy. Remember, your Beneficiary Designation will not change unless you change it.

Job Change

This one trips people up all the time. In the excitement of a new career, not everyone remembers that the old employer plan left behind can be rolled over to an IRA or moved to a 401k at their new company.  I once had to help a client track down several old retirement plans. From a 401k that was automatically rolled into a Traditional IRA when she left a company several years ago, to several different employer plans that were left behind when she changed jobs. She even had a pension plan from one employer that we were also able to locate and combine with the rest of her assets into a new Self-Directed IRA. All the pieces together enabled her to invest in Real Estate where her assets have doubled in price in just the last few years. Don’t lose track of your old plans!

Starting Your Own Business

Are you self-employed? A Realtor, a CPA, or even a gig worker? If you own your own business or have a side gig, you may be overlooking an opportunity to saving for retirement. Did you have an amazingly profitable year? If it’s time to protect your income from taxes, you can open a retirement plan and pay yourself, instead of the tax man. SEP IRAs and Solo 401(k)s are tax-deferred retirement savings accounts for small business owners. You can open an additional account, even if you are covered by a pension or retirement plan at your day job. And the best part? Contributions can reduce tax liability.

Retirement

Are you getting ready to retire? Have you considered putting your employer sponsored and regulated plan into an IRA where you can control the investments? Do you need to diversify so that you are protected by market downturns an instability? Talk to your financial advisor and look into your retirement accounts. You can make your money grow even in retirement. Make sure you have all your IRA accounts ducks in a row so that you never have to worry about outliving your funds.

Financial Stress

Is it time to get serious about retirement? For the last two years challenging times may have overshadowed much financial planning beyond getting through sweeping changes and surviving from one curve ball to the next. Many have been out of work, underemployed or perhaps one spouse needed to reduce hours or even leave a job to take care of children who were suddenly learning from home. Many stopped putting money into their retirement accounts and some even tapped into savings or took early distributions from their retirement accounts. If you were faced with sudden financial stress that derailed your well laid plans, it is time to take stock of where you are. 

Your Child Got a Job!

Did your child get a job? You can get them started off right by contributing to a Traditional or Roth IRA in their name. Income earned from self-employment jobs such as, babysitting and mowing lawns count, as well as jobs with employers such as bagging groceries, delivering newspapers, or even being a model on social media for your family business. Children of any age can contribute to an IRA as long as they have earned income from a job. Money from an allowance, or money given as a gift, or even investing income does not count as earned income. Can you imagine where you would be right now if you had started contributing to a retirement account when you were still a child? The earlier your kids can start contributing, the better their chances of growing a significant retirement account.

 

Prohibited transactions in IRA