Retirement may be a long, long way off for you or it may be just around the corner. matter how near or far away it is, you have really got to begin investing for it right now. However, saving for retirement isnt what it used to be with the rise in the cost of living and the instability of social security. Nowadays, you have to invest for your retirement future, as opposed to just saving for it!
Let us start by taking a look at the retirement plan offered by the company you work for. Once upon a time, these plans were quite sound. However, after the Enron upset and all that followed, people arent as confident in their company retirement plans anymore. However, if you choose not to invest in your companys retirement scheme, you do have other options.
First of all, you can invest in bonds, certificates of deposit, money market accounts, mutual funds and stocks in alphabetical order. You do not have to tell anybody that the returns on these investments are to be used for retirement. Simply let your money grow over a period of time, and when an investment reaches its maturity date or value, reinvest it and continue to let your money grow.
You can also open an Individual Retirement Account (IRA). IRAs are very popular because the money is not taxed until you withdraw the funds. You may also be able to deduct your IRA payments from the taxes that you owe. An IRA can be opened at most larger banks.
A ROTH IRA is a much newer type of retirement account. With a Roth, you pay taxes on the money that you are investing in your ROTH IRA account, but when you cash out, no federal taxes are owed. Roth IRAs can also be opened at most larger financial institutions.
Another popular very sort of retirement vehicle is the 401(k). 401(ks) are typically offered through employers, although you may be able to open a 401(k) on your own. You should talk to a financial planner or an accountant to help you decide whether this is right for you or not.
The Keogh plan is another type of IRA that is more 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 scheme that people typically find easier to run than a regular Keogh plan.
Whichever retirement investment you choose, just make sure you do pick one! Again, do not depend on social security, company retirement plans, or even an inheritance that may or may not happen! Take care of your financial future by investing in it today.