Putting Together the Puzzle Pieces of Retirement Planning SHP FInancial

Over the course of your life, you have probably acquired several different retirement accounts, and you have likely considered many kinds of retirement strategies. The key now, if you have recently retired or you are about to retire, is to start putting those different pieces together to form a complete picture of what you have and what you may need going forward.


This is the most common kind of retirement account. It’s held jointly between you and your employer and contains contributions from you both, and it consists of stocks, bonds, mutual funds, and other assets. The contents of a 401(k) are not taxed until they are withdrawn and taken directly out of your paycheck, which may be useful depending on your financial situation.

You can withdraw your money from a 401(k) account at any time, but if you withdraw before you are age 59 ½, the withdrawal is subject to a 10% penalty tax in addition to your normal tax obligation at the time of withdrawal.[1]

Traditional IRA

IRA stands for Individual Retirement Account. You can open an IRA through a financial organization yourself, and you can decide when and how you want to submit to them. There are yearly limits on IRA accounts, but how much you contribute under those limits is up to you. The time at which you submit your contributions is also up to you. Like a traditional 401(k), contributions to a traditional IRA are tax-deferred, meaning you pay taxes when you withdraw the funds.[2]

Roth 401(k)

A Roth 401(k) is like a 401(k) in that it is a joint account held by the employer and the employee, and contributions to this account are regular and taken from your paycheck. The key difference between a traditional 401(k) and a Roth 401(k) is that the Roth version is taxed when the funds are contributed. When you withdraw the funds when you retire, you will not have to pay taxes on them.[3]

Roth IRA

A Roth IRA is like a Traditional IRA in some ways. It is something you open individually through a financial institution and has yearly limits on contributions. It has the same flexible options as a traditional IRA, but the difference is that your contributions to a Roth IRA are taxed as they enter into the account, but they are not taxed on withdrawal.


If your employer offers a pension, this means that they promise to provide a certain monthly income to a retired employee for life. There are various factors that determine the amount that the employee will receive, but it is generally determined by your final average salary and the number of years you worked at the company or institution.[4] 


As you can tell, taxes are a major part of retirement planning, and often making the right choice for your retirement involves being savvy about which tax-advantaged retirement savings vehicles to use. If you’re looking for advice on how to manage your accounts and which accounts might be right for you, Click HERE to sign up for a complimentary review with us at SHP Financial.


The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
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