Investing for Retirement

You may have a long way to go before retirement, or it may be just around the corner. No matter how close or far away it is, you must begin saving immediately. With the rise in the cost of living and the uncertainty of social security, saving for retirement is no longer as easy as it once was. As opposed to saving for your retirement, you must invest!

Let’s begin by examining the retirement plan offered by your employer. Historically, these plans were pretty sound. However, after the Enron scandal and all that followed, people’s retirement plans are no longer as secure. You have alternatives if you choose not to invest in your employer’s retirement plan.

First, you can invest in equities, bonds, mutual funds, CDs, and money market accounts. You are not required to disclose that the returns from these assets are intended for retirement. Simply allow your money to grow over time, and when particular investments reach maturity, reinvest them and continue to allow it to grow.

Additionally, you can open an Individual Retirement Account (IRA). IRAs are very popular since contributions are not taxed until withdrawal. Additionally, you may be eligible to deduct your IRA contributions from the taxes you owe. IRAs can be opened at the majority of banks. ROTH IRAs are a relatively new type of retirement account. With a Roth, you pay taxes on the money you invest in the account, but no federal taxes are due upon withdrawal. A Roth IRA can be opened at a financial institution as well.

Another common retirement account is the 401(k) (k). 401(k)s are commonly offered by employers, although it is possible to open one on your own. Consult a financial planner or accountant for assistance with this matter. The Keogh plan is an alternative type of IRA appropriate for self-employed individuals. Simplified Employee Pension Plans may also be of interest to self-employed small business owners (SEP). This is an alternative sort of Keogh plan that is often easier to administer than the standard type.

Regardless of the retirement investment you choose, you must choose one! Again, do not rely on social security, employer retirement plans, or even a possible bequest! Invest in your financial destiny now to ensure a secure future.