When you reach the age of 65, it’s time for you to stop working to enjoy your golden years in peace. If you’re going to have fun with your retirement, you’re going to need to begin saving ASAP.
This means knowing about the different types of retirement plans available to you. You can pay into a 401(k) with your job or go with an IRA. There are options for those who are self-employed as well.
These are only a few to keep in mind. Check out this guide to learn more about the different retirement programs and find out which one is best for you.
If you talk to anyone in the financial industry about your retirement options, 401(k)s is probably what they’re going to mention because they’re the most common.
It’s a retirement option that you pay into via your job. You can set it up where your boss takes money out of your paychecks each month and automatically puts them into a plan for you.
There’s only a certain amount of money that you can add to the account each year. If you try to pull funds from it to retire before the age of 59, you’ll probably have to pay fees.
If you work as your own boss, don’t worry. There are still money management options available to you. They’re designed for business owners that don’t have any employees.
Like with the traditional 401(k), you’ll only be able to contribute a certain amount of cash to the account each year. If you’re over the age of 50, you can make catch-up contributions if need be.
IRAs are another popular smart investment option because of the tax benefits you can gain from them. As long as you’re earning money, any cash that you put into the account will be pre-taxed dollars.
This means your contributions count as non-taxable income. You won’t have to pay any kind of taxes on the money until you take it out.
The downside is that an IRA will require you to invest your cash all by yourself. You can do this by buying stocks. You could also invest in gold.
Roth IRAs are a bit newer. Instead of contributing to your account with pre-taxed money, you’ll be using after-taxed cash. This means that the cash that you use for your Roth IRA has already been taxed.
You’ll be able to take money out of your retirement fund without having to worry about penalties. There are income limits that you’ll have to adhere to, and you’ll have control over your investments. You may want to hire an accountant.
Types of Retirement Plans to Be Aware of
If you’re going to enjoy your golden years in peace, you’re going to need to be aware of the different types of retirement plans. By being knowledgeable, you’ll put yourself one step ahead of the game.
Start weighing your options today to find the best retirement program for you. The next step for preparing for your retirement is taking care of your debts. Visit the Get Out of Debt section of our blog to learn more.