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Make the most of catch-up contributions to your retirement plan! - YouTube
Channel: We Are Iowa Local 5 News
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but right now we want to talk to
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somebody that will hopefully help you
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have a beautiful retirement we are
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talking about lauren merkel
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it's time for your merkle retirement
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minute for merkel retirement planning
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laura merkel how are you buddy
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i'm doing wonderful dude thank you how
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are you today we are great now this
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morning we're going to talk about
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something which is absolutely
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perfect timing uh since we last visited
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with merkel retirement planning on
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friday
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about making sure that your retirement
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amount of money that you have your nest
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egg so to speak is as large
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as it possibly could be and there's a
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way that you can contribute to it
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especially
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if you're a little older as you get
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closer to retirement right
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yeah we we approach this time frame of
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retiring we're
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five years ten years out and a lot of
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people will look at what they've saved
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thus far
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and they're thinking is it really enough
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is this going to be enough to propel me
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through 20 to 30 years of not working
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and being able to do all the all the
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activities that i want to do in
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retirement
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so there's special provisions within
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these three different types of
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contributory accounts that we're going
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to highlight here today where you can
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actually make
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up contribute more to these accounts to
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help propel yourself through
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those years where you're not going to
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have this w-2 income coming through okay
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so these are the
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the catch-up contributions that we're
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talking about here now when can you
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start taking
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advantage of these catch-up
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contributions
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once you obtain the age of 50 for two of
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these so with the 401k plan
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contributions and then the ira
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contributions it's age
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50 and then with the hsa it's age 55.
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so the way that the ira works is once
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you're 50 and above
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you can contribute 6 000 per year plus
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the 1
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dollar a year catch-up contribution so
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totaling
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seven thousand dollars for your 401k
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plan
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it's nineteen thousand five hundred
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dollars
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plus sixty five hundred dollar catch-up
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contribution totaling twenty six
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thousand 000
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that you can contribute to your 401k
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plan
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and then with the hsa again it's age 55
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just to make things tricky lou
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okay once you're age 55 you can
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contribute an additional
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thousand dollars on top of the 3600
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dollars per individual
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covered by the hsa okay just remember
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with the hsa lou you have to have a
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high deductible health care plan in
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order to contribute to that that's where
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i was going with that uh that's the type
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of plan that you need on there but
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something about the hsa that we want to
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make sure that we clarify too
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the money you put into an hsa is that
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your money even if you don't spend it
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yes that that's a great distinction
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because we are used to
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these old fsa accounts flexible spending
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accounts where it's kind of a use it or
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lose a proposition where the hsa
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is your money so at the end of the year
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you don't have to have the entire
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balance
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spent up in fact one of the strategies
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is to cash flow
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your medical needs while you have this
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good w-2 income coming in allow your hsa
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account to grow tax-free because
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anything that's underneath this account
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grows tax-free as long as you take it
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out later and use it for qualified
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medical expenses so cash flow your
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medical
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expenses while you're working if you can
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allow that money to compound
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tax free and then when you're retired
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you can use it for a whole host of
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medical expenses
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and you can take advantage of the tax
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free compound interest now uh
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talking about the the iras uh the roth
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iras for example
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here and having the additional money
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you're able to add to it uh is it really
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going to be that impactful by
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adding that additional thousand dollars
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if you can do so
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yeah i mean you'd be surprised on how
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quickly this can add up
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so taking advantage of the thousand
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dollar catch up or the 6 500
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catch up with the roth ira or the 401k
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plan
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is something that you should really
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consider now with these three accounts
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and there's other types of retirement
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accounts also lou
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but the there's not all of these
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accounts are the same so
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most people just don't have unlimited
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amounts of money that they can
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contribute
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to their retirement savings so it's
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really important
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especially in these these last 10 years
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or so of saving for retirement to
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prioritize where your monies go
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so if we can give you just a quick
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priority rundown of these three
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different accounts number one
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if your 401k plan has an employer match
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that should be priority one that's free
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money that's instant return
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so take advantage of the 401k plan and
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then
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if you have the ability to contribute to
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the hsa that should be priority number
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two
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and then priority number three would be
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the ira and
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the the reason for that is because the
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contributions that go into the hsa
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are tax deductible so you get the tax
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deductible then you get the tax free
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growth and tax-free distributions based
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assuming you're using it for qualified
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medical expenses so those
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would be in that order you should
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consider uh contributing in that order
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based on the amount of money that you
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have available to contribute towards
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your retirement savings
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you know something it would not be a bad
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idea just to sit down and have a
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conversation with you lauren if people
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want to do that
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how can they do that this is very simple
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go to merkleplan.com
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we make it very easy to talk to a
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retirement planner
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we have a complimentary 15-minute
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retirement checkup phone call that is
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available
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and you can you have access at
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merkelplan.com directly to one of our
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retirement planners calendar
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where you can set up a time that's
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convenient for you all right
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merkelplan.com lauren merkel again great
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advice as you always give
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and this is a time that you really get
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even more excited if you can contribute
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more
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to what you'll have for retirement and
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do so in a smart way
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this is how you do it thank you so much
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thanks lou have a great week
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