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Roth or Traditional IRA? - Parsec Financial

IRA Contribution Rules

The maximum contribution for 2023 individual retirement account contributions is $6,500 ($7,500 if aged 50 and over). There are income limits that determine whether you can deduct your Traditional IRA contribution or if you qualify to make a Roth IRA contribution.

Portfolio Spending Illustration

This illustration shows a 5% spending from a portfolio of large US companies as illustrated by the S&P 500 index. The analysis assumes you spend 5% of the prior year-end balance, which starts at $1 million in 1970. This timeline includes a decade of weak market returns in the 1970s and then a historically bad decade of returns in the 2000s. Even with these tough market environments the balance ended 2022 at $1.5 million and produced portfolio spending of close to $3.8 million.

Parsec certainly doesn’t recommend an all-equity approach for all of its clients, but it has long been Parsec’s philosophy that an investor with a long time horizon needs to have a majority of their assets invested in a globally diversified stock allocation.

Source: Duff & Phelps, LLC. 2022 SBBI® Yearbook. Illustration assumes annual spending was taken at the beginning of the year. Past performance is no guarantee of future results. All figures take into account inflation. Updated: Dec. 2022

Generational Wealth Building Illustration

One way to strategically transfer wealth to your heirs and build generational wealth is through a strategic gifting plan. Here we illustrate how early contributions can compound into significant values over the recipient’s lifetime. Specifically, gifting $25,000 annually for the first 10 years may have an ending value of more than $14 million in 90 years. Moreover, starting at age 60 the recipient can spend 5% from this portfolio annually over the next 30 years for total distributions of more than $17 million. (Both figures are adjusted for 3% inflation.)

Note: Figures do not take into consideration underlying annuity or mutual fund fees, taxes or trading costs. Performance data depicts historical performance and is not meant to predict future results.

Equity Portfolio Construction

Probably since before you made your first dollar, you were told about the importance of investing in the stock market – about the wonders of compounding returns over time that can transform a lifetime of savings into a car, a house, and a comfortable retirement.

Retirement Income: A Closer Look

Earned income stops for everyone at some point, and people then need to navigate the transition from saving for retirement to spending from their investment portfolio.

Mindful Investing

Articles about the benefits of meditation are everywhere these days, and for good reason. The past few years have been unusually stressful, and people are looking for non-addictive, healthy ways to manage their stress and anxiety. Thus, I got interested in mindful investing.

(Tax Loss) Harvest Season is Almost Here!

The kids are back in school, the leaves are changing colors, and pumpkin spice lattes – the age-old harbingers of harvest season – are everywhere. At Parsec, we are preparing for the harvest…of tax losses.

Why Your Money Isn’t Available Immediately After Selling Securities

When you need to withdraw cash from your investment account and you’re told the funds aren’t available, it can be a little unsettling, particularly when you know you have more than enough to cover the withdrawal. “What do you mean, the funds aren’t available? I can see them right there!”

Socially Responsible Investing FAQ

Socially responsible investing (SRI) is the practice of evaluating investments’ social or environmental impact as well as their traditional financial metrics. By doing so, investors hope to direct their money toward companies with sustainable business practices and, equally as important, away from companies who may commit social or environmental injustices.

Socially Responsible Investing Helps Combat Climate Change

Last summer my husband and I took our two young girls on a family trip to Lake Tahoe, NV. We totally unplugged to enjoy mother nature and teach our children how to love the outdoors as much as we do. Looking across the lake to the trails and mountains beyond, I wasn’t aware that fires were burning all around us. I only realized it once we tried to take our flight home yet was grounded because of poor visibility conditions due to the fires.

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