Vail Daily column: Help your mother prepare for retirement
Mother’s Day is almost here, so start shopping for the flowers or candy for Mom. But this year, why not also go beyond the traditional?
Here are a few suggestions:
• Contribute to her IRA. As long as your mother is employed, she can contribute to an IRA, and she may already have one. You can’t contribute directly to her IRA, but you can certainly write her a check for that purpose, and by doing so, you can make it easier for Mom to max out on her account this year. Assuming your mother is over 50, she can contribute up to $6,500 per year to her IRA. An IRA can be a great way to save for retirement because it offers significant tax benefits. Contributions to a traditional IRA are typically tax-deductible, while any earnings can grow tax deferred. Roth IRA contributions are not deductible, but any earnings can grow tax free, provided the account owner meets certain conditions.
• Give Mom some stocks. You know your mother well, so you are probably familiar with the products she likes. By giving her shares of stock of the companies that produce these goods, you will provide Mom with a feeling of ownership that she may enjoy — along with the benefit of possessing investments that could potentially increase in value.
• Discuss retirement income strategy. Even if your mother has made some smart financial moves, such as investing in an IRA and her 401(k) or other employer-sponsored retirement plan, she may still need some advice. To cite one action she needs to take, she must start making withdrawals from her 401(k) and traditional IRA once she turns 70 1/2. But if she withdraws too much each year from these accounts, then she could deplete them sooner in her retirement years than is desirable. To develop a solid retirement income strategy — one that can help her avoid outliving her income — she will need to coordinate withdrawals from her retirement accounts with her Social Security payments and any other sources of income she may have available. Because it’s so important to put together an appropriate income strategy, it’s a very good idea to consult with a financial professional. If your mother does not currently work with one, then encourage her to meet with someone you know and trust.
Of course, your mother may be married and have her finances commingled with those of her spouse. Nonetheless, every one of the suggestions mentioned above is applicable and relevant to your mother, whether she is singled, married, divorced or widowed. Women must be prepared to take full charge of their financial situations, no matter their marital status.
If you can contribute — whether in the form of investments or knowledge — then it can help her make progress toward an enjoyable retirement You will be providing her with an enormous show of gratitude.
This article was written by Edward Jones for use by your local Edward Jones financial adviser. Edward Jones and its associates and financial advisers do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray, Kevin Brubeck and Dolly Schaub are financial advisers with Edward Jones Investments. Reach them in Edwards at 970-926-1728 and in Eagle at 970-328-4959 and 970-328-0361.