A Brief Introduction To Retirement Savings
Retirement is something that all of us (well, almost all of us) look forward to. Most people eagerly await the day that they can stop working and relax. Even if you don't choose to stop working once you become eligible for retirement, it's good to know that you have the option and can devote your time to hobbies, volunteer work or pursuing a different line of work which you find more personally rewarding without having to worry about the size of your paycheck.
Of course, the above is really only true if you've been saving for your retirement - especially if you decide to leave the workforce altogether once you reach retirement age, you'll need to have an income which you can at least make ends meet on and preferably, live comfortably on. Making sure that you're financially ready for retirement is something that it's never too late to start doing, but that is best begun as early as humanly possible. The sooner you begin your retirement planning, the more you can contribute into your Roth IRA, traditional individual retirement account, 401k or other investment vehicles which you decide to use in your efforts to ensure financial security once you stop working full time.
It's great to save money in a regular savings account in your bank or credit union, but the yield on these savings in terms of interest is far lower than most of your other options. If you've been trying to save for your retirement with a traditional savings account, it's time to start looking at other options which make your money work harder on your behalf.
If you're still working, a 401k or 403b is something that's worth looking into. Most larger employers offer these plans (401k for most businesses, 403b for non-profits, schools and other public sector employers) as part of their standard compensation package, so you may have one of these accounts already unless you've opted out. If you don't have one of these retirement plans already, ask your employer how to sign up. You're allowed to contribute as much as $320 a week (or $17,000 a year) to these retirement accounts and many employers will also match a percentage of your contributions up to a certain amount. Along with individual retirement accounts, these employer sponsored accounts are one of the easiest ways to save for your retirement, since contributions can be automatically deducted from your paycheck.
However, not everyone's employer offers 401k or 403b plans and in this case, an IRA is the way to go - you can also open one of these accounts if your employer has a 401k plan. There are tax benefits associated with these and other retirement accounts, so if you're ready to start saving for your golden years, it's time to begin examining your options and setting aside some money for the future.
Of course, the above is really only true if you've been saving for your retirement - especially if you decide to leave the workforce altogether once you reach retirement age, you'll need to have an income which you can at least make ends meet on and preferably, live comfortably on. Making sure that you're financially ready for retirement is something that it's never too late to start doing, but that is best begun as early as humanly possible. The sooner you begin your retirement planning, the more you can contribute into your Roth IRA, traditional individual retirement account, 401k or other investment vehicles which you decide to use in your efforts to ensure financial security once you stop working full time.
It's great to save money in a regular savings account in your bank or credit union, but the yield on these savings in terms of interest is far lower than most of your other options. If you've been trying to save for your retirement with a traditional savings account, it's time to start looking at other options which make your money work harder on your behalf.
If you're still working, a 401k or 403b is something that's worth looking into. Most larger employers offer these plans (401k for most businesses, 403b for non-profits, schools and other public sector employers) as part of their standard compensation package, so you may have one of these accounts already unless you've opted out. If you don't have one of these retirement plans already, ask your employer how to sign up. You're allowed to contribute as much as $320 a week (or $17,000 a year) to these retirement accounts and many employers will also match a percentage of your contributions up to a certain amount. Along with individual retirement accounts, these employer sponsored accounts are one of the easiest ways to save for your retirement, since contributions can be automatically deducted from your paycheck.
However, not everyone's employer offers 401k or 403b plans and in this case, an IRA is the way to go - you can also open one of these accounts if your employer has a 401k plan. There are tax benefits associated with these and other retirement accounts, so if you're ready to start saving for your golden years, it's time to begin examining your options and setting aside some money for the future.
Source...