FAQ
General Investing and Financial Planning Concerns
Q: What are the biggest concerns for individual investors right now? Market volatility, inflation/cost of living, and fear of financial scams top the list. Many investors also worry about saving enough for retirement, high fees eroding returns, and the impact of geopolitical events or recessions.
Q: How can I protect my portfolio from market volatility? Diversification across asset classes, regular rebalancing, and maintaining an emergency fund (3–6 months of expenses) are key. A long-term perspective and professional guidance help avoid emotional decisions during downturns. We can build a risk-appropriate allocation tailored to your goals and timeline.
Q: Am I saving enough for retirement? A common benchmark is saving 15% of income (including employer matches) starting in your 20s or 30s. Use our retirement calculator or schedule a complimentary review—we’ll run personalized projections based on your age, income, and lifestyle goals.
Q: How can I minimize taxes on my investments? Strategies include maximizing tax-advantaged accounts (401(k)/403(b)/457, IRA, HSA), tax-loss harvesting, holding investments for more than one year for long-term capital gains rates, and considering Roth conversions when appropriate. Our team reviews your full tax picture annually.
Q: Should I work with a financial advisor? Most individual investors benefit from professional guidance—especially during life transitions, market stress, or when coordinating retirement, taxes, and estate plans. Advisors help with goal setting, behavioral coaching, and optimization that DIY investors often miss.
Retirement Planning Questions
Q: What is the best way to save for retirement? Maximize employer-sponsored plans first (especially those with matching contributions), then fund an IRA or HSA. Diversify across pre-tax, Roth, and taxable accounts. We help prioritize and coordinate all your accounts.
Q: When should I start taking Social Security? It depends on your health, other income sources, and longevity. Delaying to age 70 maximizes the monthly benefit for many, but claiming earlier may make sense if you need income now. We run personalized claiming strategies.
Q: How much will I need in retirement? A common rule of thumb is 70–80% of pre-retirement income, but it varies widely. We create detailed cash-flow projections that factor in inflation, healthcare, travel, and legacy goals.
403(b) Plans – Frequently Asked Questions
Q: What is a 403(b) plan and who can participate? A 403(b) is a tax-deferred retirement plan (also called a TSA or Tax-Sheltered Annuity) available to employees of public schools, 501(c)(3) tax-exempt organizations, and certain ministers. It works like a 401(k) but is designed for the education and nonprofit sectors to save for retirement in addition to a pension. We also encourage utilizing a Tax-Deferred Investment within the 403(b) when possible, to avoid paying the higher costs associated with annuity contracts. Tax-Deferred Investments will involve a Mutual Fund and/or Index Fund platform. We can review your plan's options and go through a 403(b) comparison to see what option is best and most cost effective for your needs.
Q: What are the 2026 contribution limits?
Employee elective deferral: $24,500
Age 50+ catch-up: additional $8,000 (total $32,500)
Ages 60–63 special catch-up (SECURE 2.0): additional $11,250 (total $35,750)
15-year service catch-up: up to $3,000 extra per year (lifetime max $15,000) for eligible long-term employees
You can often contribute to a 403(b) and a 457(b) in the same year for double the savings.
Q: Are there employer matches? Many 403(b) plans now offer matching or nonelective contributions. Check your plan document—free money is one of the best reasons to participate.
Q: What are the withdrawal rules and penalties? Distributions are generally allowed at age 59½, separation from service, disability, death, or hardship. Withdrawals before 59½ are subject to ordinary income tax plus a 10% early-withdrawal penalty (with some exceptions). Loans and hardship withdrawals may be available. If you are retired before age 59½, you may be be able to access as early as age 55.
Q: Are investment options and fees a concern in 403(b) plans? Historically, many 403(b) plans offered mainly annuities with higher fees and surrender charges. Modern plans often include low-cost mutual funds and ETFs. We help participants review their specific options and, when allowed, roll over to an IRA for more choices and lower costs after separation.
457(b) Plans – Frequently Asked Questions
Q: What is a 457(b) plan and who is eligible? A governmental 457(b) is a tax-deferred deferred-compensation plan for state and local government employees (police, firefighters, teachers, etc.) and certain tax-exempt organizations. It is an excellent supplement to a 403(b) or pension.
Q: What are the 2026 contribution limits? Same as 403(b):
$24,500 normal limit
Age 50+: +$8,000 (total $32,500)
Ages 60–63: +$11,250 (total $35,750)
Special pre-retirement catch-up (last 3 years before normal retirement age): up to double the normal limit ($49,000)
Most public employees can contribute the maximum to both a 403(b) and a 457(b) each year.
Q: How do withdrawals work in a 457(b)? You can withdraw funds upon separation from service at any age with no 10% early-withdrawal penalty (only ordinary income tax). Other triggers include age 59½, death, disability, or unforeseeable emergency. This is a major advantage over 403(b) and 401(k) plans.
Q: Can I roll over a 457(b) to an IRA? Governmental 457(b) balances can be rolled over to an IRA or another eligible plan after separation. Non-governmental 457(b) plans have stricter rules.
Q: Should I contribute to a 403(b), a 457(b), or both? If eligible for both, contribute enough to get any employer match in the 403(b) first, then max the 457(b) for the no-penalty early-access feature. We run scenarios to optimize your specific situation.
Roth IRAs, Traditional IRAs, and 401(k) Plans – Frequently Asked Questions
Q: What is the difference between a Traditional IRA and a Roth IRA? A Traditional IRA allows pre-tax contributions (potentially tax-deductible depending on income and workplace plan coverage), with taxes deferred until withdrawal in retirement. Growth is tax-deferred. A Roth IRA uses after-tax contributions (no upfront deduction), but qualified withdrawals—including earnings—are tax-free in retirement if rules are met (account open 5+ years and age 59½+). Roth IRAs offer tax-free growth and no required minimum distributions (RMDs) during the owner's lifetime.
Q: What are the 2026 contribution limits for IRAs? For both Traditional and Roth IRAs combined:
Under age 50: $7,500
Age 50 and older: additional $1,100 catch-up (total $8,600)
These limits apply to the total across all your Traditional and Roth IRAs for the year. Contributions must come from earned income (or spousal income in some cases).
Q: Who can contribute to a Roth IRA in 2026? Roth IRA contributions are subject to income limits based on modified adjusted gross income (MAGI) and filing status:
Single / Head of Household: Full contribution if MAGI < $153,000; partial phase-out $153,000–$168,000; none ≥ $168,000.
Married Filing Jointly: Full if MAGI < $242,000; partial $242,000–$252,000; none ≥ $252,000.
Married Filing Separately: Phase-out starts at low levels (often $0–$10,000).
If you're over the limit, a backdoor Roth conversion (contribute to Traditional IRA then convert) may be an option—we can guide you through the tax implications.
Q: Can I deduct Traditional IRA contributions in 2026? Deductibility depends on whether you (or your spouse) are covered by a workplace retirement plan and your MAGI:
If not covered by a workplace plan: Fully deductible regardless of income.
If covered: Phase-out ranges apply (e.g., single: full deduction up to $81,000 MAGI, partial up to higher thresholds; joint filers higher). We review your situation annually to maximize deductions or consider Roth contributions instead.
Q: What is a 401(k) plan? A 401(k) is an employer-sponsored retirement plan allowing pre-tax (traditional) or after-tax (Roth) elective deferrals. Many include employer matches. It's available in private-sector jobs (unlike 403(b) for nonprofits/education or 457(b) for government).
Q: What are the 2026 401(k) contribution limits?
Employee elective deferrals: $24,500
Age 50+: additional $8,000 catch-up (total $32,500)
Ages 60–63 special catch-up (if plan allows): additional $11,250 (total $35,750)
Overall plan limit (employee + employer contributions): $72,000 (or $80,000+ with catch-up in some cases)
You can contribute to a 401(k) and an IRA in the same year, though IRA deductibility may be affected if covered by the 401(k).
Q: Should I choose Traditional or Roth contributions in my 401(k) or IRA? It depends on your current vs. expected future tax bracket:
Choose Traditional if you expect a lower tax bracket in retirement (deduct now at higher rate).
Choose Roth if you expect higher taxes later, want tax-free withdrawals, or prefer no RMDs (Roth 401(k) RMDs can be avoided by rolling to Roth IRA). Many plans offer both—diversifying with some of each provides tax flexibility. We help model scenarios based on your income, goals, and projections.
Q: When can I withdraw from these accounts without penalty?
Age 59½ for penalty-free withdrawals (ordinary income tax still applies to Traditional/401(k) pre-tax amounts).
Exceptions include first-time home purchase (up to $10,000 lifetime from IRA), higher education, medical expenses, etc.
Roth IRAs: Contributions (not earnings) can be withdrawn anytime tax/penalty-free.
401(k): Loans or in-service withdrawals may be available while employed; hardship withdrawals possible but taxed/penalized.
Q: Can I roll over these accounts? Yes—common strategies include:
Rolling old 401(k)s to an IRA for more investment choices and lower fees.
Converting Traditional to Roth (pay taxes now for future tax-free growth).
Combining accounts for easier management. We coordinate rollovers to avoid taxes/penalties and align with your overall plan.
Cetera Investment Services LLC exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.