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Saving Money for Retirement

Saving Money for Retirement

November 03, 2022

Saving Money for Retirement by Wendolyn T. Forbes, CFP®

When you think about retirement, what comes to mind? Sun, surf, and cold drink in hand while swinging in a hammock on a tropical island far away? Flexibility to do what you want when you want?

What is your plan to get there? One way to save for retirement is by contributing money to an Individual Retirement Arrangement, or IRA. There are two types of IRAs: traditional and Roth.

You must have earned income to contribute to either type of IRA. Which type of IRA depends on your earnings and tax-filing status. If eligible to contribute, the contribution limit is either 100% of earned income or a maximum of $6000 (if under age 50) or $7000 (if over age 50), whichever is less.

Contributing to a traditional IRA may provide you with a tax deduction unless your income exceeds the threshold tax filing status. (In that case, your contribution may not be tax deductible.) A Roth IRA will not provide you with a tax deduction, however your contributions may grow tax-free and, once certain requirements are met, your money may be withdrawn tax free.

Once your money is in an IRA, how it’s managed is up to you. You have many choices such as investing your IRA with a brokerage firm or mutual fund company, depositing your IRA into a money market savings account, or using your IRA to purchase a certificate of deposit (CD) at a bank. After you contribute to your IRA, if you change your mind, but want to retain your account, complete a rollover or custodian-to-custodian transfer so you are not taxed for withdrawing the funds. If you withdraw from your traditional IRA prior to age 59 ½, your withdrawal may be subject to a 10% penalty, in addition to ordinary income tax rates. If you withdraw from your Roth IRA prior to 59 ½, you may withdraw your contribution tax-free, but withdrawals over that amount may be taxed. There are additional rules and exceptions which may be found by visiting the IRS’s website,

You have choices. Your financial professional may help you. Reach out to your CERTIFIED FINANCIAL PLANNER™ to talk through your retirement vision and develop a plan that may work for you and your financial situation.

Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC, where she offers financial planning and investment management services for either a one-time or on-going cost. For more information, visit

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP® (with flame design) in the US, which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

This material is provided as a courtesy and for educational purposes only.  Advisory Services Network, LLC does not provide tax advice.  The tax information contained herein is general and is not exhaustive by nature.  Federal and state laws are complex and constantly changing.  Consult your own legal or tax professional for information concerning your individual situation.  

Originally published in the November 2022 issue of Positively Haywood, available online.