Setting Retirement Goals and Planning for Tax Time
December 7, 2020
In her recent Redwood Credit Union webinar, Jean Chatzky suggested we aim for saving 15% a year. In reaching that goal, we should be able to build our
retirement fund so that it covers about 45% of our pre-retirement income. The rest will come from Social Security to help us achieve a replacement rate of income that we should be able to comfortably live on.
As we move into a new year, we’d love to help you set goals to work toward your future. It’s never too late to get started or to make positive shifts. Here are the individual retirement account options you have at RCU—all of which come
with no monthly fee:
- Traditional IRAs
- Roth IRAs
- SEP IRAs
- And more.
You can also roll funds into an RCU IRA from previous 401(k) plans or transfer IRA funds from another financial institution or investment company. Moving those accounts to us makes it easier to monitor your investments and simplify account information at
tax time.
Contributions to a traditional IRA can be tax deductible and the deadline to contribute to them is normally the same as the deadline to file your tax return. So even though we’re in January, you still have until April to make your 2020 contributions. The annual contribution limit for 2020 and 2021 is $6,000 (or $7,000 if you’re age 50 or older). Learn more about IRAs here.
We’re always here to discuss your options, so don’t hesitate to reach out to us. One of your benefits as an RCU Member is scheduling a free consultation with a financial advisor who can help you identify and implement strategies to attain your financial goals—for this year and years to come! Visit www.redwoodcu.org/services/investment/ to get started.
2020 was an unusual year and you may have additional tax questions. Here are a few good resources:
- Will I Owe the IRS Tax on My Stimulus Payment?
- Are Payments I Receive for Being Unemployed Taxable?
- Coronavirus-related relief for retirement plans and IRAs
For additional help, please consult your trusted tax advisor.
Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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