Retirement
Overview
Retirement is somewhat of a difficult topic for many people to discuss. Overall, Americans are somewhat confident about their retirement plans, with four out of ten citizens stating that they are confident they have enough money to live through it. However, the Employee Benefit Research Institute states that this confidence is unfounded, and that many Americans are unprepared financially for their retirements
Start Early
For many readers of this site, retirement may seem far off and not something to worry about at the present time. However, even people as young as college students may want to start planning for the future, since it cannot hurt and will definitely help one be more prepared for a sudden financial shock such as a car accident or illness.
Different Types of Plans
There are many different types of plans for people who want to get ready for retirement. Since large sums of money are being saved for your future, you should research them all very carefully and see which one is best for your personal needs. The following are some suggestions of things to look into, adapted from a Wells Fargo planning tool.
- Investigate your options at work. Retirement accounts like 401(k) plans and SEP IRAs allow you to save for retirement with pre-tax dollars and many plans offer matching contributions.
- Explore IRAs to supplement to your plan at work. If don’t have access to a retirement plan at work you may be able to make tax-deductible contributions to an IRA.
- Consider an annuity. If you have contributed the maximum to your work and IRA, consider the advantages of an annuity for even more tax-deferred growth.
- Look into your Social Security benefits. Be sure to check your annual Social Security Statement to make sure your wage records are accurate.
Returns on Retirement Plans
Because retirement savings last the course of decades, the savings you put in can grow many times during the period of your life. Below is a sample chart illustrating how important it is to invest early, because the money can grow at a very fast rate.
