Four Steps to a Comfortable Retirement

Retired couple
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Utah resident Clay Erickson has worked for over 35 years in the financial services industry. At his current role with Wealth Innovation Group in Utah, Clay Erickson focuses on his passion for protecting his client’s assets with individualized solutions and years of expertise, particularly with retirement planning. 

Retirement planning can seem like a daunting prospect for many Americans, and there are many things to consider before getting started. At Wealth Innovation Group, one of Utah’s premier retirement and financial services firms, the complex process is broken down into four simple steps.

1. The first step in retirement planning is discovery. Retirement planning requires determining your current financial situation and your end goals. Consider using a retirement calculator to determine your retirement needs. Most people find that 70 to 90 percent of their pre-retirement income is required during retirement. For example, if your pre-retirement income is $100,00/year, you would need to generate a minimum of $70,000 per year from your retirement accounts.

2. The second goal is to design a plan. Consider various options to diversify your retirement plans, including an IRA or Roth IRA, learning about investment options, and making sure you understand your employer’s pension plan. If you are not using a financial advisor, consider using a planning software such as MaxiFi or Wealth Trace.

3. It is important to double check and verify that your plan meets all your goals and objectives for the future. Be sure that you take the time to understand every aspect of your plan and how it will work for you. 

4. The final step is putting your plan into action. Agents at Wealth Innovation Group develop long-term connections with clients in order to execute individual retirement plans and strategies effectively. They remain committed to your needs every step of the way.

Strategies Wealthy People Use to Reduce Their Taxes

Tax on Paper
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Clay Erickson is an award-winning financial professional based in Utah who has served various companies in the financial sector for over 30 years. He is currently an advisor at the Wealth Innovation Group, but began his career in 1984 as a senior investment officer with a major national banking institution, and has spoken at numerous seminars on various financial topics. Some of the areas Clay Erickson focuses on include retirement planning, safe money investing, and tax reduction strategies.

Tax cannot be avoided, but it is possible to come up with smart and creative ways to reduce tax burdens. Below are some of the ways wealthy people reduce their tax obligations.

1. Wealthy individuals work towards boosting their equity investments and managing gains. For instance, they invest in stocks when selling time approaches, as taxes are usually lower compared to the tax rates on wage income.

2. Giving back to society through charitable donations helps to reduce one’s tax bill. Donating items such as books, clothes, and toys to support the needy is classified as volunteer work, which can be leveraged as a tax benefit.

3. Many wealthy individuals own their own businesses, which provides more tools to minimize taxation. Business owners have an opportunity to work closely with financial planners, CPAs, or bookkeepers to ensure every tax-saving opportunity is identified. Tax breaks and larger retirement contributions available only to business owners can help to lower taxes.

4. Multiple assets are managed using a well-defined formal structure such as a limited liability company (or LLC). If an LLC is a management company that provides oversight and advice to business owners, some business expenses incurred by the LLC may be deductible.

How Do Qualified and Nonqualified Retirement Plans Differ?

Clay Erickson, an award-winning financial services professional, works for the Wealth Innovation Group in Centerville, Utah. To this role, Clay Erickson brings more than 35 years of experience and a strong understanding of Utah’s retirement and financial planning tools, including qualified and nonqualified retirement plans.

The primary difference between qualified and nonqualified plans is the way each plan is taxed. Since qualified plans, such as IRAs and 401(k) plans, are designed to meet the Employee Retirement Income Security Act (ERISA) guidelines, they grant both employers and employees tax breaks for contributions. 

For employers, all contributions made on behalf of employees are deductible from that year’s taxes. Employees are not taxed on the funds in their qualified plans until those funds are withdrawn.

However, contributions to a qualified plan are limited every year by the IRS. When contributions surpass these limitations, they are usually not deductible. 

Nonqualified plans are not subject to limitations on their contributions. However, employees often must pay taxes on any income contributed to their nonqualified plan when they earn it, and employers cannot deduct contributions made to these plans.