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Tuesday Tips

Learn more about managing your money! Our Tuesday Tips give you quick, easy access to burning questions, courtesy of our Wealth Management team!
Photo of Hannah Santa Cruz standing outside Missoula, MT. 

There is text over the photo that reads "Where to start....Saving for Retirement - Hannah Santa Cruz"
Photo of Kary Parks holding a sign that reads "401 (k)?"
The text over the photo reads "Roth or Pre-Tax contribution, which option is a better fit for you? - Kary Parks"
Michelle Juntenen sitting with he rdaughter

IRA Contribution Deadline Is May 17th, 2021

Today's Tuesday Tip regarding IRA's comes from Michelle Juntunen, Junior Portfolio Analyst for Stockman Wealth Management in Helena.

With the extended May 17th tax deadline fast approaching, it may be time to think about your IRA contribution. IRAs are a great tax-advantaged way to save for your retirement. You can still make 2020 contributions up until the filing deadline. For 2020, annual contribution limits are $6,000 with a $1,000 catch up ($7,000) if you are age 50 or older. These contributions can be made to your Traditional IRA (pre-tax) or Roth IRA (after-tax). Remember that participation in employer sponsored retirement plans and/or income phase-outs may limit deductibility and the ability to contribute to these retirement accounts.

As deadlines and contributions do change over time, make sure to contact your tax advisor regarding eligibility.

Where to Start… Saving for Retirement

Today's "Tuesday Tip" comes from Hannah Santa Cruz, CFP®, Junior Portfolio Manager, with our Missoula Wealth Management team.

We’ve all heard about the importance of saving for retirement, but sometimes just getting started can feel overwhelming. Below are a few tips to help you get started and feel some reassurance that future financial freedom is within reach:

  • If you are eligible to participate in an employer-sponsored retirement plan, commit to saving at least enough to take advantage of the full employer match.
  • Received a raise? Paid off a loan? Pay yourself first by increasing your deferrals into your retirement account.
  • Start saving as early as you can – give your money a chance to compound over a longer period.
  • Don’t try to time the investment markets.
  • Automate your savings so that you never miss what you save.

If you need help getting started, please reach out to Hannah at Stockman Wealth Management.

Which 401K Is the Right Fit?

Roth or Pre-Tax contribution, which option is a better fit for you? Today's "Tuesday Tip" comes from Kary Parks, CFP®, Junior Portfolio Manager, with our Wealth Management team.

A common question our professionals answer is, “How do I decide between Roth or Pre-Tax contributions in my employer sponsored 401(k) retirement plan?”

This is more of a tax question than an investment question. Pre-Tax contributions to a 401(k) plan enjoy deferral of Federal and State income taxes and investment earnings grow tax deferred. Taxes will only be paid when a distribution is taken from the account. On the other hand, Roth contributions are made after Federal and State income taxes. Investment earnings grow tax deferred and qualified distributions are not taxed. Here are a few questions to aid your decision:

  • Is my tax bracket higher now than it will be in retirement? If yes, a Pre-Tax 401(k) contribution might be your best choice.
  • Do I want tax-free distributions in retirement? If yes, then Roth 401(k) contributions might be your best choice.

Other IRS rules and situations might help you choose the best path. Each person’s situation is unique. If you need help deciding, talk to your tax advisor or call Kary at Stockman Wealth Management if you’d like to chat about it.

Start Planning For Your Child's Future

Michelle Juntunen, Junior Portfolio Manager
Today's "Tuesday Tip" comes from Michelle Juntunen, Junior Portfolio Manager, with our Wealth Management team.

Stockman Wealth Management helps people who are seeking a roadmap to their financial freedom and a guiding friend to accompany them along the path.

Planning for your child’s future is often an important and comforting part of your wealth plan. Although there are several options for savings, 529 plans in particular can be an important factor in your child’s future education as well as a critical component in your overall estate plan.

Some advantages of a 529 plan include:
• Potential income tax savings
• Tax free growth
• Funds can be used on any qualified education expense
• Broad selection of investing options including stock and bond mutual funds In addition to these advantages, 529 plans have minimal impact on financial aid eligibility.

To learn more about Stockman Wealth Management and 529 plans, contact Michelle at Stockman Wealth Management.