Retirement secrets revealed

By Ken McEntee

If you’re just beginning your career, retirement may seem like a long time away.

However, insists Gary Cerasi, CPA, owner of Creative Business Strategies, the earlier you start to save, the better chance you have of accumulating sufficient funds to last you through a comfortable retirement. Here, Gary discusses the best strategies:

Q: As a business owner, what’s the best way that I can save for retirement?
A: There are a variety of plans that many people have heard of, such as Individual Retirement Accounts, 401(k) plans and Simplified Employee Pensions. But a special program called the Defined Benefit Plan lets you put away up to $1 million pre-tax per year in certain cases. The older you are and the bigger your W2 the more you can put away in a DB.

Q: What’s the best way for an employee to save?
A: I always recommend an employee max out his or her 401(k) contributions so he or she can get the largest employer match. That is free money in your retirement account.

Q: How do I know if I’ll have enough money to retire?
A: Take your monthly bills and subtract whatever pensions and Social Security you will receive. Divide the balance by .05. This will tell you how much you will need to have saved to live off 5 percent in the market for the rest of your life.

Q: Why save? Why can’t I just live off Social Security like my grandmother?
A: It costs a lot more to live today than it did for grandma. Most people get between $20,000 to $30,000 from Social Security. That is usually not enough to live on for the rest of your life from age 65 to 80 or 90.

You can learn more by scheduling a no-cost consultation with Gary, at 440-546-9359. Creative Business Strategies is located at 192 East Wallings Road, in Broadview Heights. You can learn more at CreativeBizStrat.com.