GO
Help

Retirement

Retirement Overview Retirement Planning Asset Allocation Diversify with ETFs  

Investing for retirement is essentially a three step process:


1. Develop a savings plan based on your retirement needs.

2. Contribute regularly to an IRA to maximize tax advantages.

3. Build a portfolio of diversified investments allocated among different asset classes
    (stocks, bond, funds, and cash).

The savings plan should be based on how much income you will need during your retirement years. Of course, because of the tax-advantaged nature of IRA accounts, one should try to contribute as much as possible each year! For example, a 25-year old who starts with $10,000, contributes $4,000 annually, is in the 28% tax bracket, and earns an average return of 8 percent on her portfolio will have $676,869 in a taxable account. In an IRA, this account would have grown to $1,253,471 - almost double! There are IRS limits to annual contributions, however, so check with your tax advisor.

The current contribution limits are also listed on the Internal Revenue Service website: http://www.irs.gov/publications/p553/ch03.html

In order to help you determine your retirement income needs, there are excellent tools available free at Yahoo! Finance and Smartmoney.com.

Here are the links:
http://finance.yahoo.com/retirement/calculator_index
http://www.smartmoney.com/retirement/?nav=dropTab

In addition, the Iowa Public Employees Retirement System offers a comprehensive set of free retirement calculation tools, including an Asset Allocation calculator.

Here is the link to their website:
http://www.ipers.org/members/calculators/calculators_3.html

The Importance of Investing Early:
This chart illustrates the benefit of contributing the maximum amount annually to an IRA and letting your money compound continually at a growth rate of 8% until retirement.

Please note this graph is for illustrative purposes only and does not reflect real returns of actual securities. All investing involves risk including loss of your principal.

Zecco Trading is not a tax advisor and does not advise clients on tax issues. We are an online brokerage where you can trade stocks for free. Chart assumes an initial annual IRA contribution at the beginning of the first year and every year thereafter until retirement. Current retirement investing tax law increases IRA contribution limits of $4000 in 2007 to $5000 in 2008 and increases IRA contribution limits indexed to inflation rounded to the nearest $500 increment thereafter according to the Pension Protection Act of 2006. An additional IRA “catch-up” contribution commences at age 50. Inflation is assumed to be 3.6% percent annually. The only Zecco Trading fees of $30 are calculated at the beginning of each year. An annual composite portfolio return of 8% across stocks, bonds, and cash is assumed to be posted at the end of each year.

Of course, this estimate does not include the impact of taxes upon withdrawal or taxes and penalties for early withdrawals (before age 59 1/2) which are subject to additional taxes and the federal tax penalty of 10%.

Zecco Trading, Inc. is not a tax advisor. The Internal Revenue Service Code that governs IRAs is complex, and state tax laws regarding IRAs may differ as well. We recommend that you consult with a qualified tax advisor as you formulate your retirement planning needs.

Free Stock Trading
IRA
Join Forum
Discussions

Click here to discuss
with like-minded
investors in the
Community
retirement forum!
This is a service of Zecco Holdings and is not a regulated product. Zecco Holdings, Inc. is not a registered broker/dealer.

Privacy Policy - User Agreement - Margin Disclosure - Risk Disclosure - SEC Rule 606 Disclosure - Penny Stock Disclosure - Business Continuity Plan - About Us - Contact Us

Zecco.com is a financial portal of Zecco Holdings, Inc., which also provides access to Zecco Trading. Zecco Holdings is not a securities broker/dealer. All securities and investments are offered by Zecco Trading, Inc. Member FINRA/SIPC. At Zecco Trading, you can make up to 10 free stock trades in any one month that you maintain a $2500 minimum account net equity. After that, you pay only $4.50 per stock trade. Options trades are $4.50 plus $.50 per contract. Only the first account of any account type is eligible for the Zecco Trading, Free Trading program. Any multiple accounts of the same type with the same registration are not eligible for the free trading program. Free Trading Program is only available through Zecco.com. $0 minimum to open cash and IRA accounts. Margin accounts require a $2,000 minimum balance for opening and trading on margin.

Zecco Trading accounts are protected by the Securities Investor Protection Corporation (SIPC), up to $500,000 (including up to $100,000 for cash claims). Accounts protected in the aggregate up to $200MM by Lloyd’s of London. This coverage provides protection against brokerage insolvency and does not protect against loss of market value of securities.

No information on this web site should be considered a recommendation or solicitation to invest in any particular security or type of security. Margin trading involves incurring interest expense and risks, including the potential to lose more than invested, or the need to deposit additional funds/collateral in an adverse market to your positions. Our margin agreement is available on our web site under the Forms tab, and contains the Margin Disclosure Statement and information on our lending policies, interest charges, and risks associated with margin accounts.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.

Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. A mutual fund/ETF's prospectus contains this and other information, and should be read carefully before investing.

No consideration was paid for any testimonials displayed on this website. Your experience may vary, and the testimonials are no guarantee of future performance or success.

© 2006-2008 Zecco Holdings, Inc. All rights reserved. System response and access times may vary due to market conditions, system performance, and other factors.