Saving for retirement is a priority, which needs to begin its priority status early to procure maximum benefits. If you did not start saving for retirement in your twenties you still have options, however, thanks to the many types of retirement accounts available today.
Saving for retirement involves assessing your financial goals in advance of them becoming financial needs and taking action to achieve them. Read ahead for a valuable guide to the many options available for saving for retirement today.
Personal retirement savings account plans come in many forms. The three most common types of retirement savings account categories today are Social Security, employer-sponsored and individual retirement account (IRA) plans. Underneath these primary categories are multiple sub-categories of account types, each with its own benefits and drawbacks.
The goal of this article is to provide you with as comprehensive an overview of the most common types of plans used today as possible and how each one is effective.
Employer-sponsored retirement accounts include traditional pensions, 401(k) plans and many more. In years past, American workers could rely on their pension plans in addition to Social Security retirement benefits to get them through their later years.
The type and quality of employee pension plan provided by an employer was a huge part of the draw to working for a specific company. Social Security retirement benefits are based the total amount of Social Security taxes one pays into the Social Security fund during their working years.
Life was always complicated in one way or another but the concept of saving for retirement did not necessarily follow suit. People worked and paid taxes, including their share of Social Security taxes. While working, money was contributed and accrued into their pension savings accounts. Upon retirement each employee received their pension wages plus and Social Security retirement benefits as applicable based on the total amount of Social Security taxes paid in pre-retirement.
Unfortunately, this type of simplicity is no longer commonly available for American workers. The best way to save for retirement today involves diversification, which includes opening multiple types of accounts.
An IRA savings account is one way to supplement and provide for your retirement savings. IRAs come in many different forms, so it is vital to research your options to know which available options are most suitable for you. The sooner you start saving up for retirement the more flexibility you will have as you grow older. This includes having the freedom to choose and live to the fullest the exact type of lifestyle you want for your golden years. Continue reading for helpful information about popular IRAs and how to choose the best one for your retirement goals.