Smart Financial Moves if You Decide to Work Later or Part-Time After Retirement


Who would this apply to? How do people go about deciding if this is an option they would even want to consider? What are the advantages of making this move? Watch Szarka Financial’s CEO Les Szarka, CFP®, ChFC®, discuss these issues with Fox 8 News Anchors Stefani Schaefer and Gabe Spiegel.

I Just Inherited an IRA; What Should I Do?


What should people do if they find out they inherited an IRA? What if you’re not the spouse of the IRA owner? What is a stretch IRA? So what are the most important points to remember? Watch Szarka Financial’s Senior Financial Planner Alex Menassa, MT, CPA, JD discuss these issues News Anchor Roosevelt Leftwich.

A Huge but Little Known Retirement Risk: Sequence of Returns


Are there any retirement risks that most investors don’t know about? Who should be worried about sequence of returns risk? What exactly does it mean? What can you do to reduce the potential harm of sequence of return risk? Watch Szarka Financial’s Senior Financial Planner Alex Menassa, MT, CPA, JD discuss these issues News Anchors Stefani Schaefer and Gabe Spiegel.

The US Stock Market is at an All-Time High – Are You on Target for Your Retirement?


The US stock market is at an all-time high. Should we expect the current market returns to continue? So what should our listeners expect going forward? What does this do to someone’s retirement plan? Watch Szarka Financial’s Senior Financial Planner Rick Martin, CFP® discuss these issues with Fox 8 News Anchors Autumn Ziemba and Roosevelt Leftwich.

4 Common 401(k) Pitfalls


If you are saving for retirement, like many Americans, your main vehicle to do so is probably some form of defined contribution plan such as a 401(k) or 403(b) plan. The problem is the average American is not saving enough and many are making common and basic mistakes with their employer sponsored retirement accounts.¹ Here are some tips that will help prevent you from derailing your retirement.


The first and obvious pitfall to avoid is simply not participating in your company’s defined contribution plan. Four out of five American workers are employed by a company that offers a defined contribution retirement plan, but only 32% or workers are utilizing them.² Not only are they not taking advantage of the tax benefits, they are walking away from free money. Many employees offer an employee match (generally on average) of 50 cents on the dollar on up to 6% of contributions. To save an adequate amount for retirement, you should be contributing at least 15%. For those who cannot afford that much, make elective contribution deferrals to at least the employer match so you’re not missing out on the free retirement savings.


When faced with unexpected financial crisis, it’s tempting to tap into your 401(k), but doing so could put your retirement at risk by missing out on the compounded interest you would earn over years. Not to mention you would have to pay the IRS a 10% premature withdrawal penalty if you are under 59½ years old. The alternative, but not much better option, is taking a loan from your 401(k). Some plans offer a loan provision, which allows you to borrow from your fully vested funds. The loan is repaid to yourself/your 401(k) plan, with interest. Approximately one in five workers who participate in an employer-sponsored defined contribution plan has taken a loan from the plan’s balance. The pitfall participants can run into when taking a 401(k) loan, is leaving or getting fired before paying back the entire loan balance. If that happens, the full amount of the loan comes due and if not paid back, the remaining amount becomes a taxable distribution.


401(k)/403(b) vesting is when an employer makes a matching contribution on your behalf into a defined contribution plan, but does not give you complete ownership of those funds until you have met certain requirements. For example; the typical vesting schedule is 25% vested after one year, 50% vested after two years, and 100% vested after three years. Vesting schedules can vary based on the respective employer’s plan. Retirement savings plan vesting schedules are a common way for employers to provide a motivation for employees to stay with the company for at least a few years.

If you are thinking about leaving your job, first find out:

  • How much of your 401(k)/403(b) is vested?
  • How much time is left for it to be fully vested?

If you’re only a few months away from being vested, perhaps you should stick it out a bit longer until you are. You could be walking away from free money.


If you automatically get enrolled into your company’s 401(k), by default, you will most likely be enrolled in a traditional plan. One common mistake that 401(k) investors make is not learning if the plan has a Roth 401(k) option. A Roth 401(k) is exactly like a Roth IRA in the sense that you can take a portion of your taxed income and invest it so it grows tax free and can be withdrawn tax free, only with a much higher contribution limit. The IRS allows for up to $5500 a year contribution ($6500 if you are 50 years old or more) to Roth IRAs and up to $18,000 ($24,000 if you are 50 years old or more) for Roth 401(k)’s.


A better approach might be utilizing both the traditional 401(k) and Roth 401(k), so during retirement you have access to one bucket of savings that will be taxed when withdrawn and another bucket of savings that will not be taxed.

The only down side to the Roth 401(k) is that it does not reduce your taxable income like the traditional 401(k) does, so ask a financial advisor which situation might suit you the best.



1. Steverman, Ben. “Two-Thirds of Americans Aren’t Putting Money in Their 401(k).”, Bloomberg, 21 Feb. 2017,
2. According to research conducted by AonHewitt in 2012. Powell, Robert. “7 Worst 401(k) Mistakes by Retirement Savers.” 8 Mar. 2014,



Age Related Retirement Milestones That Could Even Have You Looking Forward to Your Next Birthday


For most of us, our attitude towards our next birthday can change dramatically as we go through life. Early on, we may greatly look forward to certain birthdays.

For example, many people look forward to their 18th birthday because in most states, that marks the “age of majority” when they are legally considered an adult and can take control of many aspects of their lives. And the 21st birthday may be the most highly anticipated of all, for reasons that we will leave up to the imagination. Unfortunately, birthdays after that tend to generate increasingly less enthusiasm. However, you may not be aware that in the realm of retirement planning, you may have some birthdays coming up that you should actually be looking forward to! That’s because as the years pass, certain age milestones give you more options when it comes to building wealth and saving for retirement. The following is a list of some of the more important age milestones with regard to retirement planning.


AGE 50
Once people reach their 50th birthday, they often realize that they’ve been too focused on things like getting that next job promotion, raising the kids and paying for the big new house. Unfortunately for many, they find themselves behind when it comes to building up their retirement nest egg. Luckily, the IRS allows for certain “catch-up” contributions to allow them to put their retirement savings on a fast track. One of the most important is that in the calendar year you turn 50 and thereafter, you can contribute an extra $6,000/yr. as a salary deferral into your company 401(k) plan, thus raising the maximum contribution limit from $18,000 to $24,000. In addition, you can add an extra $1,000/yr. into your Traditional or ROTH IRA, thus raising that maximum contribution limit from $5,500 to $6,500. Both of these amounts are as of the calendar year 2017, and are likely to go even higher in the future.


AGE 55
If you leave your job in any calendar year when you turn 55 or older, there is a little known loophole in the tax law that allows you to take distributions from your company 401(k) plan with no premature 10% penalty. The money will still be taxable, but relief from the penalty can yield a big savings. This rule can come in handy especially if, for example, you are unexpectedly laid off from your job and need to tap into some of that money to pay bills.

NOTE: This rule applies only to distributions from 401(k) plans and NOT from IRAs, so you want to be particularly careful not to hastily roll over the entire 401(k) into an IRA before analyzing whether you might need to take some of that money out, because once the money is rolled to an IRA, the opportunity to take advantage of this rule is lost.


AGE 59½
This is the age at which you can take distributions from any tax qualified retirement plan, such as your 401(k) and/or IRA, without paying the 10% premature distribution penalty. This rule can often come into play if you are retiring early, say in your early 60s, and need some of that money for living expenses.

NOTE: There is a strange quirk in this rule; the distribution actually has to take place at least six months to the day after your 59th birthday in order to avoid the penalty. So you have to carefully count out 183 days past your birthday and make sure not to take the money before that date.


AGE 62
This is the age at which you can elect to take early Social Security.

NOTE: The benefit will be reduced for every year you are younger than the “Normal Retirement Age” (NRA), which is generally age 66, so if you take your benefit at age 62, it will be reduced by about one third, and will stay that way for life. So, it is important to think carefully before deciding to go ahead with this. Still, statistics show that well over half of recipients start taking their benefit at some point before their NRA.


Age 66
For most people, this is the age at which they qualify for their full “Normal Retirement Benefit” from Social Security. One thing to keep in mind is that there is no requirement that you start taking your benefit at this time. In fact, if you decide to wait, your benefit will increase by about 8% per year all the way until age 70, at which point it will max out. So if you don’t need the money right away, you may want to wait and let the benefit keep growing. When you do start taking your benefit past age 66, the increased amount will continue for life.

For most of us, our attitude towards our next birthday can change dramatically as we go through life. Early on, we may greatly look forward to certain birthdays.


AGE 70½
Since distributions from your 401(k) and/or IRAs must be included as taxable income on your return, many people wait as long as possible before doing this and choose to live on other money instead. Well, the IRS won’t let you wait forever. Starting in the year you turn 70½, the IRS forces you to begin taking a certain amount out of your 401(k)s and IRAs. These mandatory withdrawals are called “Required Minimum Distributions” (RMDs). They are based on a calculation taking into account your life expectancy. You can always take out more than your RMD, but if you take less you will be subject to a stiff 50% penalty, so it’s critically important to do the proper planning in advance for this particular issue.


As you can see, there are numerous age related milestones on the road towards good retirement planning, and it’s critically important to be aware of them and take advantage of them in order to maximize your retirement income. And who knows, depending on your situation, some of these rules could help you actually look forward to one of your upcoming birthdays for a change—or at least take a little bit of the sting out of it!

Everyone’s situation is slightly different, so feel free to give us a call if you have any specific questions about your own circumstances.



Run the Numbers!

One of the most common questions I get from people is, “When can I retire?” My typical answer is “the day after you can afford to do so, and not a single day before or after that.”

By retiring too early, you run the risk of not having enough monthly income to maintain the lifestyle you were hoping for. Having to live Social Security check to Social Security check in retirement and having to worry how every dollar is spent is not most people’s vision of retirement. It would be frustrating watching your friends do things you can’t afford to do. On the flip side, many people work well beyond what they need to, not leaving themselves enough time to enjoy the fruits of their labor. We are all just one phone call away from having our worlds turned upside down. A major sickness or accident or death of a loved one can dramatically change our retirement goals.

The dilemma is deciding the optimal time to retire. You want to retire early enough to still be healthy enough to enjoy it, but not too early, so that you regret it. The logical solution is to run the numbers, and let the facts and circumstances make the decision for you. Deciding to retire should not be an emotional decision, but rather a well thought out process.

Some key decisions that have to be considered:

  • When to start your Social Security benefits
  • Taking your pension as a lump sum or as monthly income
  • Which accounts to draw supplemental income from
  • Most importantly, how much can you take from those accounts without putting yourself into potential jeopardy

This is why you need to keep re-running your numbers even after you retire, to make sure you are still on track for your comfortable retirement. Health insurance is another key variable that may impact your retirement date. If you plan on retiring before age 65, you will have to determine where you will get your health insurance prior to becoming eligible for Medicare, and budget for a higher payment accordingly.

In addition, you need to make sure that you are emotionally ready for retirement. Some people, especially men, delay their retirement simply because they can’t imagine what they will do once they quit working. The solution is to start working on your own retirement “bucket list” years before you actually decide to call it quits. This way instead of having to dread making the decision, you’ll have something to look forward to.

My last tip is to make sure you are on the same page as your spouse or partner. I have been in situations where one person starts talking about retiring, and it was the first time the other had heard about it. Let me tell you, it can make for a very uncomfortable meeting! The key is to make sure both of you are in agreement as to your retirement plans. This means having those conversations years before you actually retire. Make sure you both agree on the amount you will need in monthly income, and what date you are targeting. It’s a lot easier to reach your goals, if you are both pulling on the same side of the rope!

Your retirement should be a planned event and not left to happenstance. This means putting in the planning and work years or even decades in advance. Most people would not take a vacation by just walking up to the airline counter and just let them hand you a ticket, without first knowing the destination and planning the trip. Your 20 to 30 year retirement deserves more than just relying on your hunches. This means getting professional advice.

It’s never too early to start planning. We are here to help guide and coach you through those critical financial decisions that will help determine whether you ultimately get to enjoy your retirement leisure years.

It’s Critical to Understand RMDs


What exactly is an RMD? Why is it “critical” to understand RMDs? What details should everyone know about RMDs? How much does the RMD have to be? How do RMDs affect a married couple? Are there any planning considerations when dealing with RMDs? Watch Szarka Financial’s Senior Financial Advisor Alex Menassa, MT, CPA, JD discuss these issues with Fox 8 News Anchors Matt Wright and Autumn Ziemba.

Important Age Milestones in Retirement Planning


Does your age have any impact on what you can do with regard to retirement planning? What’s the next significant age milestone? What other important age milestones? Any other important birthdays to remember after that? Watch Szarka Financial’s Senior Financial Advisor Alex Menassa, MT, CPA, JD discuss these issues with Fox 8 News Anchor Gabe Spiegel.

What is the Trend with Financial Advice and Robo Advising?


What is the industry trend that you are seeing with financial advice? What is robo advising? Why are we seeing more of the larger firms offering the robo advising? How will this affect how you do business? Watch Szarka Financial’s CEO Les Szarka, CFP®, ChFC®, discuss these issues with Fox 8 News Anchors Stefani Schaefer and Gabe Spiegel.