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Retirement Topics That Come Up Often
Did You Plan or Play Catch Up?
Hopefully you are employed by organization that helps you somewhere along the way. Because as we all know, don't bank on Social security still be around for many more decades.
The biggest problem many people have, when it comes to saving for life after work, is that they think that some angel is watching over them and will magically take care of them when it is time to retire.
As soon as you can begin working start saving for retirement. I often have people in their late 20s ask me when they should start saving for retirement. I first ask them, "When did you begin to work?" I then immediately respond with the answer, "The first day you began working!" The earlier you begin saving for retirement, the earlier you have a tax break and the larger your return grows. More importantly, you don't miss the extra cash as much because you get use to not having it.
With the average retirement age at 67 now and Social Security it the toilet, we can all sure bet that we will be working forever or worrying about our own retirement.
This is entirely dependent on your situation. If your employer has any benefits that led to extra funds in your pocket, take full advantage of it. If the career field you work in has a pension plan take full advantage of it.
If you are entirely on your own for retirement planning, you should become thoroughly educated on retirement if in fact you don't want to work until you die.
Retirement has really gotten much easier since all of the competition has forced it to be.
I really like a few products: IRAs and 401Ks.
Simple Retirement Plans to Live Life After Work
A good, easy-breezy retirement is what parents or generally every person, have been waiting for after busting their butts off in work. But retirement requires a lot simple of planning and thinking ahead and of course saving. Retirement is the period of life where a person chooses not to earn a living anymore. He or she would just prefer to stay at home and relax for the rest of their lives. These simple retirement plans are aimed to make everyone's life easy and directed towards the right path for people to taste the retirement situation they have always dreamt of in life.
There are two most common categories of simple retirement plans known to the society. They are IRAs or Individual Retirement Accounts and Employer Sponsored Plans. Individual Retirement Accounts are individual accounts that the person funds for the sake of having income after retirement. It is the individual's chipping in part of his monthly or yearly income into this account to save up for retirement. There are actually two types of IRAs and these are Traditional IRA and Roth IRA.
Traditional IRA is a deferred tax account. Money in he account is not taxed until the time that it is withdrawn. There are penalties if the person tries to withdraw from the account before he or she reaches the retirement age, which is fifty nine and a half year old.
Roth IRA is one of the simple retirement plans, which was consummated during the year 1998 through the Taxpayer Relief Act of 1997. Named after one of its serious supporters and flagship holder, Senator William V. Roth Jr., it is patterned just like the traditional IRA. But this simple retirement plan differs in the sense that the initial balance is not taxable income. In addition to this, if the account holder wishes to withdraw before he or she reaches retirement age, no penalty will be issued.
The next category of simple retirement plans, are the Employer Sponsored Plans. As the name implies, the employer gives a sizable income to the retiring employee when he or she chooses to stop working. They give these simple retirement plans of course to those who have served the company for a considerable number of years.
The first simple retirement plan under this category is the Defined Benefit plan. The Defined Benefit plan allows for an equal amount to be given and paid out for a set of months during an employee's retirement. This plan has been popular during the fifties and the sixties.
The second simple retirement plan under the second category is the Defined Contribution plan. The employer and the employee are required to make a set of contributions set for each month. The money is invested in mutual funds or even company stock. The returns received from this plan and the money one may get upon retirement is determined by the performance of the stocks or funds.
The third simple retirement plan under the second category is the 401(k) plans, which are the most popular ones among employers and employees as well. Contributions are pre-taxed and, the contributions made are matched by the employers. The contributions as well as the growth and interest rates are tax exempted and are required to mature until the employee is of retirement age.
Lastly, there are Profit Sharing plans. The employer here makes all the contributions and they would share profit with their employees. This becomes the employee's contribution.
Simple retirement plans are abundant and it is up to the people to weigh down what is best for them.
Because we all can be smarter with our money.