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.
