Different Options For Retirement Plans
What is your retirement plan? Are you aware of the options that you have? Have you already started saving, or are you wondering what you can do for your future? Here are some options for you.
An Individual Retirement Account (IRA) is a personal savings account that allows a contributor to set aside pretax funds for retirement purposes. The money (or contributions) and interest earned is not taxed until it is withdrawn from the account (distributed).
Anyone who earns wages can open and contribute to an IRA, as long as they are not 70 ½ by the end of the year. It is extremely important to plan for retirement, and an IRA is a good investment for some. Self employed individuals can greatly benefit from this type of retirement plan because of the tax benefits. There are different types of IRAs which have different restrictions as far as how old you have to be and how much can be contributed per year.
A Retirement Income Annuity is an account that you can invest a lump sum of tax deferred money at severance from a company, or at any time, to have the money paid to you little by little. You can make arrangements for life time long payments, or for a specified amount of time until funds are exhausted. This can be disbursed monthly, quarterly, annually or whatever option you choose. You also have the option of receiving a lump sum at maturity. A fixed annuity will guarantee an interest rate that will remain unchanged. A variable annuity will invest the money and your interest will depend on the market value. Typically, the company will insure that your rate will not fall below initial premium.
A 401k is an investment account that allows you to save money for retirement with pre-tax funds. Your employer may also contribute to the 401k. Your money can go with you if you have an account with your company and choose to leave. If your plans change, or you want to combine this money with another investment, you can rollover your distribution to an IRA or an Income Annuity.
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