Retirement in Motion | Q2 2022

Retirement in Motion | Q2 2022

April 01, 2022
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Knowledge Is Retirement Power 

Roth options have become a common choice in many 401(k) plans, as well as 403(b) and 457 plans. The appeal with a Roth plan is the potential tax savings when distributions are made in retirement years. Money that goes into a Roth plan today is taxed today, but all earnings and future qualified distributions are free of tax. With traditional 401(k) plans, money goes in tax-free (and all future growth is free from tax), but qualified distributions are taxed at ordinary income rates. Check out our calculator to help determine which option might be right for you — and how it could affect your paycheck. 

Quarterly Reminder 

Are you expecting a tax refund this year? If so, consider creating an emergency fund with some or all of it. It’s important to have this money available for when something unexpected comes up, such as a car, refrigerator or dishwasher breaking down. Here are the key tips for an emergency fund:

  • Aim to have 3–6 months of living expenses saved
  • Keep separate from your checking account
  • Ensure there are no (or low) transaction fees; no penalties for withdrawals
  • Verify you will receive interest earnings on the balance (a little something is better than nothing). 

Q&A 

What is the most I can save this year in my 401(k) plan? 

401(k) savers can contribute up to $20,500 in 2022. Savers age 50 and older can make an annual catch-up contribution up to $6,500 in 2022, for a total contribution of $27,000. These limits also apply to savers with a 403(b) plan and most 457 plans. 

Tools and Techniques 

More than 50% of U.S. small businesses are owned by people 55 and older, according to a Spring 2021 survey by SCORE, a nonprofit that provides resources to small-business owners. If your retirement dream is to turn your hobby into a profitable business and finally be your own boss, check out score.org. You’ll find free access to volunteer mentors, workshops, virtual conferences, a start-up road map and many other tools for developing and launching a small business during retirement.


We are happy to help, if you have any questions or would like additional insight, please feel free to reach out to me at  joe@diversifiedfa.com or 800.307.0376.

Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. Investment Advice and 3(38) Investment Fiduciary services offered through Diversified Financial Advisors, LLC, a Registered Investment Advisor. 3(16) Administrative Fiduciary Services provided by PISTL Service Corporation. Discretionary Trustee services provided by Printing Industries 401k Trustees. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

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