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Basics >> 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, youve absolutely got
to start saving for it now. However, saving for retirement isnt
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!
Lets 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 arent
as secure in their company retirement plans anymore. If you choose
not to invest in your companys 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). IRAs
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 IRAs can
also be opened at a financial institution.
Another popular type of retirement account is the 401(k). 401(ks)
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.
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