On the latest “Total Financial Solutions Safer Money Hour” on KHTS AM-1220, the show’s hosts offered some tips and tricks for preparing for 2017 when it comes to retirement planning. Their first tip was to look into the potential benefits of what’s called a Roth IRA.

“You have a window of time between Jan. 1 and, this year, April 18, to still contribute for the previous year,” said  Arif Halaby, a Certified Estate Planner and president/CEO of Total Financial Solutions. “That is something called a Roth IRA.”

People often tend to wait until “tax season” to meet with their CPAs or tax advisors to see if they can defer some of their income, and if they don’t need to from a tax standpoint, they can contribute money to their Roth IRA, according to Jeff Girard, Halaby’s co-host.

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“Roth is the name of a senator that came up with an idea that said, you can put money into a retirement account … for the future, and as long as you take the money out in retirement, you can take it out tax-free,” Girard explained.

While the account holder doesn’t get a tax break on the money when they contribute it, the interest they earn on the money in the Roth IRA is all tax deferred.

“When you take it out in retirement it’s completely tax-free,” Girard said. “So this is a great way to hedge against future taxation going up, because right now, we think taxes are kind of on sale.”

Starting up a Roth IRA can even be advantageous to those individuals looking to retire in the next few years for a few reasons, according to Halaby.

First, those 50 years of age and older with an earned income are allowed to put in $6,500 per year rather than the $5,500 limit for those 49 and younger. Second, the funds in a Roth IRA are not subject to the Required Minimum Distribution rule.

“In other words, it can be there for you for the second or third tier of your retirement life, meaning at age 80 or 85 … the money can sit there,” Halaby explained. “You’re not required to start withdrawing it as you would be if it was a 401(k) or a traditional IRA. Those have rules and you would be stuck. In this particular case, you do not have that concern.”

To learn more about the potential benefits of Roth IRAs from Halaby, and other tips and tricks for preparing for 2017 when it comes to retirement planning, click here listen to the full podcast.

Total Financial Solutions offers assistance with preparing for retirement and financial planning in Santa Clarita and the surrounding valleys. Santa Clarita financial advisor Arif M. Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners from Santa Clarita financial planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344