Your Guide to Retirement Planning
Learn more about the many options available for retirement savings.
Financial Milestones
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How to Save for Retirement
The most effective long-term savings plans start with action today. At UMCU, we offer a choice of Traditional or Roth IRAs to strengthen your retirement savings. Both come with investment options, tax advantages, and the comfort in knowing that you're setting the best course for your future.
- Invest up to $7,000 per year ($8,000 if age 50 or older)
- Choose from Certificates and other savings options
- Traditional IRAs offer possible income tax deductions for every year you make a contribution
- Roth IRA balances grow tax-free and withdrawals are tax-free
- Individual Retirement Accounts can often be used for higher education expenses
- Visit one of our convenient Michigan branches for help choosing your IRA
Take the Next Step.
Check out our offerings to help you take the next step in your retirement planning.
Retirement and Saving Calculators
Common Retirement Questions
Ideally, you should save as much as you are able. Most financial advisors recommend saving a minimum of 15% of your gross income for retirement. However, it also depends on a few factors: how much income you earn, when you plan on retiring, what kind of retirement fund you'll contribute to, etc. UMCU has a variety of retirement calculators to help you!
It depends! Do you have a personal savings account in addition to your retirement account? Do you plan on taking an early retirement or working as long as possible? Check out our calculator to get an idea of how long your retirement planning accounts will last into your golden years.
In most cases, it's advisable to utilize an employer matching 401(k) program. Our 401(k) calculator will help you see how much you can grow your retirement account based on a few factors:
- Your annual salary
- Your annual salary increase
- Your contribution
- Your employer's contribution
- Your current age
- The age you plan to retire
There are pros and cons to each! Like with all things retirement related, there is no concrete answer. There are different qualifications for a traditional 401(k) vs a Roth 401(k), how each account is taxed, withdrawal requirements, and more.
Click here to use our traditional vs Roth 401(k) calculator.
While there are many similarities between the two retirement accounts, the biggest difference is that a 401(k) is offered by your employer while IRAs are something you open on your own. Like with traditional vs Roth 401(k)s, IRAs also have traditional and Roth accounts.
You'll need to consider several factors like your cumulative savings, how many years you will be in retirement, your tax rate, etc.
To get a rough idea of your retirement income, click here to enter your info into our retirement income calculator.
- 401(k) Plans: 401(k) plans are offered by many employers and allow you to contribute pre-tax income that your employer will often match. The funds grow tax-deferred until withdrawal.
- Roth 401(k): Contributions are made with after-tax dollars, but withdrawals during retirement are tax-free. Roth 401(k)s are beneficial if you expect to be in a higher tax bracket once you reach retirement.
- Traditional IRA: Contributions are often tax-deductible and your investments grow tax-deferred until you withdrawal. Traditional IRAs are a good option if you don’t have access to a 401(k).
- Roth IRA: Contributions are made with after-tax income, but withdrawals are tax-free. Please note that there are income limits for contributions, but it offers tax-free growth and withdrawals.
- Health Savings Account (HSA): If you have a high-deductible health plan, an HSA can be a dynamic retirement savings tool. Contributions are tax-deductible, grow tax-free, and withdrawals for medical expenses are also tax-free.
- Simplified Employee Pension (SEP) IRA: SEP IRAs are a great choice for self-employed individuals and small business owners. Plus, they allow for higher contribution limits compared to traditional IRAs.
- 403(b) Plans: A 403(b) plan is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations for their employees. It's similar to a 401(k) plan maintained by a for-profit entity. Employees defer some of their salary into individual accounts, and the funds are generally not subject to federal or state income tax until it's distributed.
