RETIREMENT
Roth 401K
-after-tax limit of $15,500, increases 500/yr with inflation
-minimum of 5 years
-can start taking money from it at 59.5
-no income stipulation
CONS: taxes increase now, smaller take home pay, not available through all employers, can only roll over to Roth IRA and not a traditional IRA
Roth IRA
-individual IRA with strict limits you obtain through a brokerage
-after-tax
-under 49 the limit is 4,000/yr
-if you are single, you must make less than 99,000/yr
-if you are married, you must make less than 156,000/yr
-10% penalty for early withdrawal
-can take up to $10,000 for primary residence
FINANCIAL CALCULATORS
-target needed for retirement is 40% of your current salary
-try Principle Company Calculator http://www.principal.com/calculators/retire.htm
-Merck has a great resource called Financial Engines
-a conservative inflation rate is 3%, salary inflation is about 2% and an average gain of investment is 4%
-assume you will live to the age of 92
Housing For Retirement
-current mortgage rate is 6-7%
-reverse mortgages are available to people 62 or older and are a tax free loan with interest
-generally believed to be a "last ditch effort"
-you may get a lump sum or monthly payment
-one should weigh the option of reverse mortgage vs a home equity loan
Possible additional topics for retirement: medicare and medicaid
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