By now you have probably heard of an IRA and know how it is a great tool to save towards retirement, but are you aware that there are limitations? Having a 401(k) at Lockheed Martin is a great savings vehicle, too, but an IRA has the possibility to provide more fund diversification, more control and flexibility, and access to investment managers not currently in the 401(k). The two ways to fund an IRA are through rollovers or contributions. Rolling over a 401(k) is usually a fantastic strategy once you reach the in-service eligibility age or once retired from Lockheed Martin. Doing so allows you to retain control of your retirement funds and gives you the ability to continue making contributions. As with all tax advantaged investments, IRAs do have a number of rules to keep in mind. Let’s break down a few of them.

Contribution Limits

  • If under age 50: $6,000 per year
  • If age 50 or older: $7,000 per year
  • Adjusted gross income is not a factor

Deductibility Limits (assuming taxpayer is married filing jointly, 2020 numbers used)

  • Fully deductible: modified adjusted gross income of $104,000 or less
  • Partially deductible: modified adjusted gross income between $104,000 and $124,000
  • Not deductible: modified adjusted gross income of $124,000 or more

 

Example: If you are a Lockheed Martin employee who is married, age 60, and have modified adjusted gross income of $150,000, you would be able to contribute $7,000 toward your IRA for the tax year; however, none of the contribution would be deductible on your tax return.

Keep in mind that a you can always contribute to a traditional IRA regardless of income; however, it may not be deductible.   If this has made you think of rolling over your 401(k) into an IRA or having an IRA in addition to your Lockheed Martin 401(k), book an appointment with a Lockheed Martin Retirement Specialist now, so we can evaluate and analyze your accounts. If retirement is drawing near for you or you would just like to plan ahead, we also have retirement planning workshops that are an excellent resource as well.

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!

Disclosures*

Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.

SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.

Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.

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