How many people do you see working at Walmart, McDonald’s, or any other business that are in their late 60’s, 70’s, and even early 80’s that should be enjoying their Golden Years? Problem is they no longer have the Gold to enjoy. Ongoing medical costs, reductions in their 401k plans, gas taking 4%-7% of a person’s annual income, and other unforeseen incidents chip away at our nest eggs.
Most people want to be able to live comfortably when they retire. You get used to a certain standard of living and it is difficult to drop below it. The only way you can be assured that you will have enough money to live comfortably is to start planning at an early age. You should take into account the Social Security benefits you will receive but the important thing here is the age you will be able to receive full benefits. This means that your retirement plan should consist of other investments and savings plans.
The tax advantages offered by Roth IRA have resulted in its great popularity. The amount you deposit in your account will be taxed only at the initial stage. Later on, at the time of withdrawal you can get the whole amount plus earnings, totally tax free. Roth IRA ensures protection for investors against all types of hidden fees during and at the end of the period. If you are a person working under a firm for a salary, your employer provides the scheme Roth IRA to you. If the investment is more than 401K, you have the freedom to choose the plan you put your money in. If the amount is below 401K, you do not have the freedom to choose your investment plan. In fact the employer whom you work for selects the scheme.
Let’s look at each plan: the 401K was a great plan with it was created. I gave the opportunity for both the employee and the employer to share in the contribution toward a retirement plan for the employee and the employer got a tax benefit as well. The problem with this plan is where the money is placed to grow. All the 401K plans of today are at risk to lose their principal unless the money is in a slow growth or balance fix interest growth plan. Either way, the employee will lose money on the account because of the low interest received or the account principal can be lost.
Make use of financial planning birmingham al that incorporate matching investment from your employer. There is the 401k in the USA and KiwiSaver in New Zealand. Take full advantage of these as the matching contributions are in effect doubling your retirement savings. In the US the 401k may be subject to vesting rules which means you must serve a certain number of years to retain the matching funds. This vesting does not apply to KiwiSaver in New Zealand but can apply to company instigated retirement plans. This aside, it is a great start to your planning for your future and a must. Check how your plan will be affected.
The appointment went very well at first. The new prospective client had about $700,000 to invest and had just retired. I recommended an annuity retirement plan first to guarantee his monthly income needs. The plan was to invest enough into a annuity retirement plan to make absolutely certain that all of his monthly income needs would be met for the rest of his life. That way there would be no worries about how he would take care of himself and his family in the event the market went down or just didn’t perform as expected. Then we take whatever money is left and invest in the market for higher returns and inflation protection.
The next category fund is the long term funds. Whatever happens try not to utilize this money for any small purpose. This is the money that you need to guard for your retirement. With this amount intact, you can do all that you wanted during your retirement. With proper planning retirement can be an enjoyable and an experience which you can cherish for the rest of your lives. Start planning today!