Achieving Your Retirement Dreams: The Importance of Income Planning

Retiring with a secure future is a dream for many people. One of the most important factors in making this dream a reality is properly planning for retirement income. Financial calculators, such as those provided by Bankrate.com, can help individuals forecast income they may receive in retirement. For example, the Retirement Calculator can help users estimate the amount of retirement income they may receive based on current age and the amount of money saved in retirement accounts. Forecasted retirement income per year for 2023 are $81,779, $92,211, $72,158, $81,362, $67,059 and $74,952 for 36-39 years of retirement income, respectively.^[0]

When planning for retirement, it is important to consider both traditional and Roth IRAs. Traditional IRAs are tax-deductible and all funds are taxed upon withdrawal once in retirement. Roth IRAs are tax-exempt, meaning that funds invested are taxed in the current year, but no further taxes will be assessed upon withdrawal in retirement provided certain conditions are met. Bitcoin IRA is another option to consider, and it is similar to a regular IRA with the difference that it invests cryptocurrency.^[1]

When planning for retirement, it is important to consider the type of retirement plan, the current marginal tax rate, the percent of income to save, the frequency of contributions, the purchase price and fee, the sale fee, and the annual investments with inflation. A Foolish Calculator can be used to help determine how much money may be needed to retire, and the Credit Card Interest Calculator can be used to calculate the estimated interest rate for credit card purchases. It is also important to consider the expected rate of inflation, which is the rate at which prices for goods and services are rising, and the expected return on investment.^[2]

When considering investing in cryptocurrency for retirement, it is important to be aware that the U.S. Department of Labor has issued a warning against using retirement funds for such investments.^[3] The agency noted that the lack of digital asset regulation makes it difficult for fiduciaries to properly analyze how crypto issuance, investments or trading might affect their 401(k) plan participants.^[3] There is also a limit on the annual contributions to an IRA account: $6,000 for tax year 2022 and $6,500 for 2023, plus a catch‑up contribution for individuals aged 50 and over of $1,000 for both years.^[4]

0. “Realistic Retirement Calculator – MarketBeat” www.marketbeat.com, 18 Jan. 2023, https://www.marketbeat.com/retirement-calculator/

1. “Crypto IRA Calculator – Retirement Investments” retirementinvestments.com, 18 Jan. 2023, https://retirementinvestments.com/crypto/crypto-ira-calculator/

2. “Investment Return Calculator – AARP” www.aarp.org, 18 Jan. 2023, https://www.aarp.org/money/investing/investment_return_calculator.html

3. “Here’s Why Investing in Crypto With Your 401(k) Might Be a Bad Idea” smartasset.com, 18 Jan. 2023, https://smartasset.com/retirement/heres-why-investing-in-crypto-with-your-401k-might-be-a-bad-idea

4. “Can You Own Crypto in Your Roth IRA? – Investopedia” www.investopedia.com, 18 Jan. 2023, https://www.investopedia.com/crypto-in-roth-ira-5220342