Retirement planning in Western PA can be slightly different from the rest of the country. There are factors such as the cost of living and the average salary that differentiate it from other parts of the United States. There are still some things that you’ll need to take into account when planning for retirement in this area.
What Is Retirement Planning?
Retirement planning is the process of figuring out how much money you’ll need to retire and then saving that money. So, it’s important to start planning for retirement early because the sooner you start saving, the more you save and the more time your money has to grow.
There are a few reasons why investing in retirement planning in Western PA is a good idea. For example, it can help you avoid running out of money in retirement. It can also help you keep up with inflation and maintain your standard of living in retirement. Finally, having a retirement plan can help give you confidence knowing that you’re prepared for the future.
5 Benefits of Having a Retirement Plan
- There are a few benefits that come with having a retirement plan:
A retirement plan can help you save money on taxes. Employer-sponsored retirement plans, such as 401(k)s and 403(b)s, offer tax benefits. This means that the money you contribute to your retirement plan is deducted from your taxable income.
- A retirement plan can help you save for retirement and reach your financial goals. You’re more likely to save regularly when you have a retirement plan. This is because you’re less likely to spend the money that you’re setting aside for retirement.
- A retirement plan can help you keep track of your progress. When you have a retirement plan, you can see how much money you’ve saved and how close you are to reaching your goal. This can help motivate you to keep saving.
- A retirement plan can give you confidence. Knowing that you’re prepared for retirement can help reduce stress and anxiety.
- A retirement plan can help you enjoy your retirement. When you have a retirement plan, you could relax and enjoy your golden years, knowing that you’re financially secure.
- Finally, a retirement plan could help you leave a legacy for your family or favorite causes by designating how your assets will be distributed after you are gone.
3 Steps to Take in Retirement Planning in Western PA
There are a few steps that you can take to start figuring out how much money you’ll need in retirement.
1. Figure out how much money you’ll need to cover your basic expenses. This includes things like food, shelter, and transportation.
2. Calculate how much money you’ll need to cover your non-essential expenses. This includes things like travel, entertainment, and hobbies.
3. Add up your essential and non-essential expenses to estimate how much money you’ll need in retirement.
What to Do If You're Behind on Your Retirement Savings
If you’re behind on your retirement savings, don’t worry. There are a few things you can do to catch up.
For example, you could start contributing more to your retirement account or look into ways to make your money grow faster. One way you could do this is by investing in a Roth IRA.
With a Roth IRA, you contribute after-tax dollars to your account. This means that you won’t get a tax deduction for your contributions. However, your money will grow tax-free, and you won’t have to pay taxes on it when you withdraw it in retirement.
Another option is to start saving in a 401(k) or 403(b). These are employer-sponsored retirement plans. If your employer offers matching contributions, ensure you contribute enough to get the full match. This is money that can help you reach your retirement goals.
You could also consider working a few extra years, which could give you more time to save for retirement and will also give you a chance to increase your Social Security benefits.
Downsizing your lifestyle or making other changes to your budget to free up some extra money to put towards retirement is another option that people will choose.
Retirement Planning In Western PA
If you are retirement planning in Western PA, you should take a few things into account. For example, the cost of living in Northwestern Pennsylvania is lower than the national average. This means that the money you save for property tax in retirement will last longer.
One of the biggest things to consider about retiring in Pennsylvania is the climate. Western Pennsylvania can be a bit harsher in the winter than other parts of the country. This means that you’ll need to factor in the cost of heating your home and keeping it warm during the winter months.
You’ll also want to ensure that you have enough money saved to cover any unexpected expenses, such as a significant home repair.
Working with a financial advisor to create a retirement plan that meets your unique needs can prove to be very beneficial if you fall behind on your retirement savings. For example, a financial advisor may give you options that you weren’t aware of or help you navigate a prospect that seemed too daunting to do alone.
Iron Point Financial is a local financial planning firm that can help you with all your retirement planning needs. Because we are based in Northwestern Pennsylvania, we understand the unique challenges that come with retirement planning in Western PA, and we have the experience and expertise to help you create a plan that will meet your needs.
We serve the Grove City, Greenville, Erie, Cranberry Township, and Boardman, OH areas.
Some IRA’s have contribution limitations and tax consequences for early withdrawals. For Complete details, consult your tax advisor or attorney.
Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 1/2, may be subject to an additional 10% IRS tax penalty.
A Roth IRA offers tax free withdrawals on taxable contributions.
To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 1/2 or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.