A plan offered by an employer that lets employees make contributions to a retirement savings plan on a pre-tax basis, sometimes fully or partially matching these contributions.

Similar to the 401(k) plan, but generally offered by nonprofit organizations instead of for-profit businesses. Allows employee contributions to grow on a tax-deferred basis until they are withdrawn. At withdrawal, the funds are subject to tax, like ordinary income.

Named in reference to the portion of the Internal Revenue Code that defines its basic rules, the 457 is a tax-exempt deferred compensation program provided to employees in state and federal governments and agencies. While similar to the 401(k) plan, the 457 plan never receives matching contributions from the employer, nor does the IRS consider it to be a qualified retirement plan.

An employer-sponsored retirement plan where employee benefits are sorted out based on a formula using factors such as salary history and duration of employment. Investment risk and portfolio management are entirely under the control of the company. There are also restrictions on when and how you can withdraw these funds without penalties. It is also known as a “qualified benefit plan” or “non-qualified benefit plan.”

A pension plan to which employers and employees make contributions based on a percentage of annual earnings, according to the terms of the plan. Upon retirement, the total pool of capital in the member's account can be used to purchase a lifetime annuity. The amount in each money-purchase plan member's account will differ from one member to the next, depending on the level of contributions and investment return earned on such contributions. It is also known as a defined contribution plan.

An IRA plan in which an employer deducts a specified amount from an employee's pay and puts the funds toward their investment account. In most situations, employees enter into payroll deduction plans on a voluntary basis.

A retirement program that permits individuals who have earned income to save part of that income in a tax-deferred savings plan. IRAs can be created and funded any time between the first day of the current year up to and including the date on which individual income tax returns are due, usually April 15 of the following year.

A plan that gives employees a share in the profits of the company. Each employee receives a percentage of those profits based on the company's earnings. It is also known as a “deferred profit-sharing plan” or “DPSP.”

While similar to a traditional IRA (Individual Retirement Account), the Roth IRA's contributions are not deductible. Account distributions may be obtained free of federal income tax if certain conditions are met.

A plan offered by small companies – typically those with fewer than 25 employees – that allows employees to make pre-tax contributions to their Individual Retirement Accounts (IRAs) through salary reduction.

A retirement plan that may be established by employers, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SIMPLE. The employer makes either matching or non-elective contributions to each eligible employee's SIMPLE IRA and employees may make salary deferral contributions.

A type of retirement plan in which an IRA (Individual Retirement Account) is used to hold contributions; a simpler alternative to a 401(k) or profit-sharing plan.

A type of pension plan that is sponsored by one employer or a group of employers under a common control structure. It may also be a pension program that is not collectively bargained and is sponsored by a group of unrelated firms.

• 45% of American working-age households do not have any retirement income assets.
• 46% of Americans reported that they and/or their spouse have tried to calculate how much they need to save for retirement.
• The U.S saving deficit is between $6.8 and $14 trillion.
• The median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.
• 92% of working households do not meet conservative retirement savings targets for their age and income.
• 86% of Americans agree that their nation faces a retirement crisis.
• 74% of Americans are concerned about their retirement outlook.
• 80% of women are more likely to be impoverished at age 65 and older.
• Only 2% of workers and 4% of retirees identify saving or planning for retirement as the most pressing financial issue facing most American workers today.
• Debt is a major factor standing in the way of retirement.
• Retirement savings are taking a back seat to more immediate financial concerns.
• Worker confidence has declined in the areas of affordability of basic expenses, medical expenses, and long-term care expenses.
• Workers cite the poor economy, lack of faith in Social Security or the government, and the inability to afford retirement as reasons for postponing retirement.
• 70% said Social Security is their major source of income in retirement.
• Only 23% of workers and 28% of retirees have obtained advice from a financial advisor.

• Current and past income
• Number of years to your expected retirement
• Current amount in savings and savings rate
• Income sources (social security, military, state or company pensions)
• Current debt
• Upcoming expenses (children, college, special needs, aging parents)
• Current insurance
• Future salary increases
• Retirement Plan contributions
• What you want to do when you retire

We can help you determine what those factors mean and project the type of savings you need to cover your retirement needs.

Retirement needs analysis addresses different scenarios by adjusting the funding requirements of the plan to align what you want with realistic goals. Different scenarios can be run with modified assumptions like retiring later or funding for a lower retirement income goal to create a viable plan with realistic goals tailored to your needs.

A retirement needs analysis will help show you the difference between the income you can realistically expect to receive from Social Security, a company-sponsored pension, and personal savings/investments compared to the income you think you will need during retirement to maintain a specific lifestyle. In 2012 the average monthly Social Security benefit for a retired worker was $1,230.00. If your combined income from these various sources does not equal enough, you could be faced with a retirement-income gap.

You need to think about your long-term goals and what you would like to do in retirement to start understanding the costs as well as how much you really need to save.

Invest in your future and start participating in your company’s or an individual retirement plan. Social Security will not provide enough to maintain the lifestyle you want through your retirement years. It is only estimated to provide about 40% of the average retiree’s income. With your employer’s tax-deferred plan, use valuable pretax dollars to help build your retirement savings. This way, the full amount goes to work for you right away, which can help you build your savings faster. With a tax-deferred account — such as a traditional IRA, a nonqualified variable annuity, or your workplace 403(b), 457(b), 401(k) plan — all taxes on interest and earnings are deferred until withdrawal, usually at retirement. Over time, the difference can be substantial.

Understand the types of available investments and your risk tolerance. There are a variety of investment types and retirement plans to meet individual needs. We have tools and charts to help you understand your feelings about investment risks and the returns you want to see that are associated with them. Investment risk is simply the possibility that an investment’s value will go up or down. Your ability to accept risk is based partly on your personality, current financial situation, need for immediate cash, investment preferences, time horizon, and other factors. Understanding those two factors will help us determine a plan that is right for you.

Select investment options that are available and appropriate for you. Your employer’s plan may offer a variety of mutual funds among the different asset categories and classes. We can help you create a mix of investments for your retirement plan goals.

Start investing early and pay yourself first. Obviously, the longer you save, the more money you will have for retirement. Generally, the more time you have, the more aggressive you can afford to be with your investments. Pay off your debt and stay out of debt so you can afford to do the things you really want to do down the line. One of the best strategies for retirement planning is to start planning and saving early.

Develop an individual plan that suits your needs. People are different and have different needs and lifestyles. Someone out of college has drastically different needs and debt than someone closer to retirement. We can help customize your plan by helping to choose investments that are appropriate for your goals and/or family. By setting clear and attainable goals, you will have a plan for funding those goals, you will know how to invest appropriately, and you will know you have begun accumulating the money you will need during retirement.

Studies show that the key to investing is asset allocation, the science of selecting the right types of investments in the right amounts. If you also diversify your investments by spreading the risk around by investing in more than one thing, you can potentially minimize risks and maximize your returns. Keep in mind that neither asset allocation nor diversification can ensure a profit or protect you against market loss. A combination of investments, some riskier and some less risky, can help.

Invest For the long term. Buying and selling investments or trying to “time” the market can potentially destroy your retirement savings. In addition, you could get hit with capital gains taxes or penalties that apply to early withdrawals on tax-deferred accounts. It is smarter to take a long-term view when you are investing for retirement. Call us today to speak with a certified retirement advisor.

When you work and pay Social Security taxes, you earn "credits" toward Social Security benefits. The number of credits you need to get retirement benefits depends on when you were born. If you were born in 1929 or later, you need 40 credits (10 years of work).

If you stop working before you have enough credits to qualify for benefits, the credits will remain on your Social Security record. If you return to work, later on, you can add more credits so that you qualify. They don't pay any retirement benefits until you have the required number of credits. Your benefit payment is based on how much you earned during your working career. Higher lifetime earnings result in higher benefits. If there were some years when you did not work or had low earnings, your benefit amount might be lower than if you had worked steadily.

Your benefit payment also is affected by the age at which you decide to retire. If you retire at the earliest possible retirement age for Social Security, your benefit will be lower than if you wait until later to retire.

If you were born in 1944 or earlier, you are already eligible for your full Social Security benefit. If you were born from 1943 to 1960, the age at which full retirement benefits are payable increases gradually to age 67. For those born in 1960 and later, the full retirement age is 67. 

You can get Social Security retirement benefits as early as age 62. However, you will receive a reduced benefit if you retire before your full retirement age. For example, if you retire at age 62, your benefit would be about 25 percent lower than what it would be if you waited until you reached full retirement age.

Some people stop working before age 62. But if they do, the years with no earnings will probably mean a lower Social Security benefit when they retire.

Note: Sometimes health problems force people to retire early. If you cannot work because of health problems, you should consider applying for Social Security disability benefits. The amount of the disability benefit is the same as a full, unreduced retirement benefit. If you are receiving Social Security disability benefits when you reach full retirement age, those benefits will be converted to retirement benefits. You should contact the Social Security Office to determine what is right for you.

You may choose to keep working even beyond your full retirement age. If you do, you can increase your future Social Security benefits in two ways.

Each additional year you work adds another year of earnings to your Social Security record. Higher lifetime earnings may mean higher benefits when you retire.

Also, your benefit will increase automatically by a certain percentage from when you reach your full retirement age until you start receiving your benefits or until you reach age 70. The percentage varies depending on your year of birth. For example, if you were born in 1943 or later, they add 8 percent per year to your benefit for each year you delay signing up for Social Security beyond your full retirement age.

Note: If you decide to delay your retirement, be sure to sign up for Medicare at age 65. In some circumstances, medical insurance costs more if you delay applying for it.

Choosing when to retire is an important but personal decision. Regardless of the age, you choose to retire, it is a good idea to contact Social Security in advance to learn the available options and make an informed decision. In some cases, your choice of a retirement month could mean higher benefit payments for you and your family.

In deciding when to retire, it is important to remember that you will probably need 70-80 percent of your pre-retirement income to have a comfortable retirement. Since Social Security replaces only about 40 percent of preretirement income for the average worker, it is important to have pensions, savings, and investments.

You should apply for benefits about three months before the date you want your benefits to start. If you are not quite ready to retire but are thinking about doing so in the near future, you may want to visit Social Security's website to use their convenient and informative retirement planner.

About one-third of people who get Social Security have to pay income taxes on their benefits.

If you file a federal tax return as an "individual," and your combined income* is between $25,000 and $34,000, you may have to pay taxes on up to 50 percent of your Social Security benefits. If your combined income* is more than $34,000, up to 85 percent of your Social Security benefits is subject to income tax.

If you file a joint return, you may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income* that is between $32,000 and $44,000. If your combined income* is more than $44,000, up to 85 percent of your Social Security benefits is subject to income tax.

If you are married and file a separate return, you probably will pay taxes on your benefits.

At the end of each year, you can go online and set up an account to view the number of benefits you received. You can use this statement when you complete your federal income tax return to find out if you have to pay taxes on your benefits.

Although you are not required to have federal taxes withheld, you may find it easier than paying quarterly estimated tax payments.

Please visit the Social Security website for a list of restrictions, including for those who live outside of the United States.

This information is from www.socialsecurity.gov.

Visit their website at www.socialsecurity.gov; it is a valuable resource for information about all of Social Security's programs. On the website you also can:

1. Apply for retirement, disability, and Medicare benefits;
2. Review your Social Security Statement;
3. Get the address of your local Social Security office;
4. Request a replacement Medicare card; and
5. Find copies of their informative publications.

Call their toll-free number at 1-800-772-1213 from7 a.m. to 7 p.m., Monday through Friday. Generally, you'll have a shorter wait time if you call during the week after Tuesday. They can provide information by automated phone service 24 hours a day. If you are deaf or hard of hearing, you may call their TTY number, 1-800-325-0778.

If you would like more information on Social Security, please call us today to schedule a free consultation with a retirement investment advisor.

• People 65 or older
• People under 65 with certain disabilities
• People of any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant)

Medicare Part A (Hospital Insurance)

• Helps cover inpatient care in hospitals and certain follow-up services
• Helps cover skilled nursing facilities, hospice, and home health care

Medicare Part B (Medical Insurance)

• Helps cover doctors' and other health care providers' services, outpatient care, durable medical equipment, and home health care
• Helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse

Medicare Part C (also known as Medicare Advantage)

• Offers health plan options run by Medicare-approved private insurance companies
• Medicare Advantage Plans are a way to get the benefits and services covered under Part A and Part B
• Most Medicare Advantage Plans cover Medicare prescription drug coverage (Part D)
• Some Medicare Advantage Plans may include extra benefits for an extra cost

Medicare Part D (Medicare Prescription Drug Coverage)

• Helps cover the cost of prescription drugs
• May help lower your prescription drug costs and help protect against higher costs in the future
• Run by Medicare-approved private insurance companies

If you are already getting Social Security benefits when you turn 65, your Medicare hospital insurance (Part A) starts automatically. If you live in the United States, you will usually be enrolled in medical insurance (Part B) automatically. Residents of Puerto Rico or foreign countries will not receive Part B automatically. They must elect this benefit.

If you are not already getting Social Security, you should contact them about three months before your 65th birthday to sign up for Medicare. You can sign up for Medicare even if you do not plan to retire at age 65. For more information, please go to medicare.gov for a free PDF guide.

Information is from www.medicare.gov.