A 401k plan is the most common retirement plan that people take out. Currently you can invest up to 15% of your salary into the fund. The money you invest is pre-tax which means it lowers the amount of tax you are paying out of your salary.
Bear in mind that your 401(k) is designed with a specific purpose in mind -to provide you with an income when you retire. For this reason it is not made easy for you to access these funds for any other reason.
An IRA or Individual Retirement Account is quite a different beast. You?ll discover that there are much stricter terms and conditions on IRAs compared to a 401(k). To start with if your employer offers a 401(k) you would have be earning very little to qualify for the ax deductions allowed.
There?s no denying that planning for you financial retirement can be daunting and confusing at the best of times. It?s no wonder that many people make crucial mistakes when trying to deal with their retirement plans. But don?t worry, here I will outline the most common errors people make when planning their 401(k) retirement fund.
The chances are that some of your 401(k) will be invested in the stock market. As we all know markets can be unpredictable and if you take your eye off the ball, your savings could be wiped out in an instant. It?s not worth risking your retirement funds on volatile stocks that seem to promise a hog return if you stay invested. It?s a much better policy to back larger established companies that have been around for may years and have transparent balance sheets (unlike some of the major investment banks that crashed in 2008).
It is really never too early to formulate a detailed retirement plan, however before you take a dive; you should make sure that the water is clear. Investing for retirement process requires a detailed planning to get the results you desire. I am sure that with few tips I provide you here, you can just start making most out of your retirement planning.
Say for example you get $ 50,000 in one year and make a contribution of $16,500, and then you?d have to give federal income tax on $33,500 only. Income taxes in the states vary. After you cross 50 years of age, you are permitted a catch up contribution of extra $5000 every year.
A Roth IRA is one of the best ways to save for retirement outside of your 401K. It is funded with after tax dollars making it so that you will not have to pay taxes when it is used. You can also use the money you deposited without penalty before age 59. These options make this a great way to save.
Many people will be working longer than individuals in the past, but we will also be living longer. Find something you enjoy doing and consider making a part time business out of it and this will give you further options during your golden years. As long as you plan for the future, you will be headed in the right direction.
For self-employed individuals, you can opt for a Keogh plan. This is basically the same as a IRA but tailored for the individual who pays his own taxes. Small business owners may be interested in a SEP ( Simplified Employee Pension Plan). These are slightly easier to administer but are essentially the same as Keogh plan.
Visit the source at: http://www.prlog.org/10761542-stock-market-timing-necessary-if-economy-goes-south.html
Meteor Shower August 2012 paul ryan jessie j jessie j Tyrann Mathieu kobe bryant David Boudia
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