Boomers Face $475K Retirement Shortfall, on Average TD Ameritrade explains how tax season could be a good time to catch up Business Wire OMAHA, Neb. -- April 1, 2013 Baby Boomers have saved, on average, $275,000 for retirement, but they believe they’ll need a median of $750,000 in order to live comfortably, according to a recent Investor Index Survey released by TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE:AMTD). Faced with this shortfall, many Americans over the age of 50 may want to consider an important opportunity that could help their retirement planning – catch-up contributions. A catch-up contribution allows investors over age 50 (by the end of the calendar year) to make additional contributions to their IRA or employer-sponsored retirement plans. These catch-up contributions are in addition to regular contribution limits. And remember, investors have until tax day to make their 2012 IRA contributions. So, those who have not contributed (or fully contributed) for 2012 can do so until April 15^th – and they can also contribute (or start to contribute) for 2013. For 2012: *IRA contribution limits are $5,000 with an additional $1,000 catch-up contribution (for a total contribution of $6,000). For 2013: *401(k) contribution limits are $17,500 with an additional $5,500 catch-up contribution (for a total contribution of $23,000) *IRA contribution limits are $5,500 with an additional $1,000 catch-up contribution (for a total contribution of $6,500) When planning for retirement, every dollar counts, especially when saving in a tax-deferred vehicle. And, with nearly half (47%) of Americans expecting to receive an income tax refund this tax season, according to a separate survey by TD Ameritrade, Inc., eligible investors might consider putting those refund dollars towards a catch-up contribution. “Baby Boomers should consider different opportunities, like catch-up contributions, that might make sense for their retirement investing plans,” said Lule Demmissie, managing director, retirement, TD Ameritrade. “By not taking advantage of these catch-up contributions, they could potentially miss out on thousands, perhaps even hundreds of thousands of dollars that could be available in retirement.” An additional $1,000/year contribution into an IRA starting at age 50 until age 70 (which is the last year to contribute to a Traditional IRA) could mean an additional $34,719 towards retirement ($1,000 a year, 20 years, 5% rate of return). If the client fully funds an IRA with $6,500 a year at age 50 until age 70, that could mean an additional $225,675 for retirement at age 70 ($6,500 a year, 20 years, 5% rate of return). “One thing for investors to remember is that it is never too late to start with plans to prepare for retirement. It may just mean they have to adjust their retirement expectations, work a little longer or think of other means of support that they had never considered before. But it’s never too late to get started,” continued Demmissie. AMTD-G TD Ameritrade does not provide tax advice. We suggest investors consult with a tax-planning professional with regard to personal circumstances. About TDAmeritrade Holding Corporation Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (NYSE: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how – bringing Wall Street to Main Street for more than 36 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information. Brokerage services provided by TDAmeritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org) /NFA (www.nfa.futures.org) About Head Research Head Research is a division of Head Solutions Group (U.S.) Inc., a leading market research partner for Financial Services companies in North America. With offices in New York, Toronto, and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action. Head Research is separate from and not affiliated with TD Ameritrade, which is not responsible for its policies and services. Baby Boomer Survey Method An online survey was conducted with N = 2,000 U.S. Baby Boomers between October 10 and 12, 2012, by Head Research on behalf of TD Ameritrade, Inc. Sample was drawn from major regions in proportion to the U.S. Census, including New England (5%), Mid-Atlantic (16%), South (25%), Midwest (22%), Southwest (12%), West (20%). Approximately 50% of respondents in each region were male and 50% female. All respondents were required to be: 1) Baby Boomers (i.e., born between 1946 and 1964) and 2) Shared or sole household decision-makers concerning saving for retirement. Two primary groups were defined based on financial preparedness for retirement: 1) Prepared: “Somewhat” or “very prepared” financially for retirement (n = 1,430) and 2) Unprepared: “Somewhat “or “very unprepared” financially for retirement (n = 570). The survey took each participant 16 minutes to complete, on average. The statistical margin of error for overall results in this study is +/- 2.2%. This means that, in 19 out of 20 cases, survey results for questions based on all Baby Boomers (i.e., N = 2,000) will differ by no more than 2.2% in either direction from what would have been obtained by measuring the opinions of all Baby Boomers in the USA. Tax Survey Methodology An online survey was conducted among N=1,000 Americans 18+ years old from November 16-17, 2012, by Head Research on behalf of TD Ameritrade, Inc. Sample was drawn from major regions in proportion to the U.S. Census. The statistical margin of error for overall survey results in this study is +/- 3% (assumes panelists do not differ from non-panelists, and respondents do not differ from non-respondents). This means that, in 19 out of 20 cases, survey results for questions based on all survey respondents (N=1,000) will differ by no more than 3% in either direction from what would have been obtained by measuring the opinions of all adult Americans. Baby Boomers = born 1946 to 1964; Gen X = born 1965 to 1976; Gen Y = born 1977 to 1989. TD Ameritrade and Head Research are separate, unaffiliated companies and are not responsible for one another’s services or policies. Contact: TD Ameritrade Holding Corporation For Media: Christina Goethe, 201-369-8541 Communications & Public Affairs email@example.com On Twitter @TDAmeritradePR or For Investors: Jeff Goeser, 402-597-8464 Investor Relations & Finance firstname.lastname@example.org
Boomers Face $475K Retirement Shortfall, on Average
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