Investing for Retirement
Retirement
may be a long way off for you – or it might be right around the
corner. No matter how near or far it is, you’ve absolutely got to
start saving for it now. However, saving for retirement isn’t
what it used to be with the increase in cost of living and the
instability of social security. You have to invest for your retirement,
as opposed to saving for it!
Let’s start by
taking a look at the retirement plan offered by your company. Once upon
a time, these plans were quite sound. However, after the Enron upset
and all that followed, people aren’t as secure in their company
retirement plans anymore. If you choose not to invest in your
company’s retirement plan, you do have other options.
First, you can
invest in stocks, bonds, mutual funds, certificates of deposit, and
money market accounts. You do not have to state to anybody that the
returns on these investments are to be used for retirement. Just simply
let your money grow overtime, and when certain investments reach their
maturity, reinvest them and continue to let your money grow.
You can also open an
Individual Retirement Account (IRA). IRA’s are quite popular
because the money is not taxed until you withdraw the funds. You may
also be able to deduct your IRA contributions from the taxes that you
owe. An IRA can be opened at most banks. A ROTH IRA is a newer type of
retirement account. With a Roth, you pay taxes on the money that you
are investing in your account, but when you cash out, no federal taxes
are owed. Roth IRA’s can also be opened at a financial
institution.
Another popular type
of retirement account is the 401(k). 401(k’s) are typically
offered through employers, but you may be able to open a 401(k) on your
own. You should speak with a financial planner or accountant to help
you with this. The Keogh plan is another type of IRA that is suitable
for self employed people. Self-employed small business owners may also
be interested in Simplified Employee Pension Plans (SEP). This is
another type of Keogh plan that people typically find easier to
administer than a regular Keogh plan.
Whichever retirement
investment you choose, just make sure you choose one! Again, do not
depend on social security, company retirement plans, or even an
inheritance that may or may not come through! Take care of your
financial future by investing in it today.
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