Day 4 of America Saves Week - Retirement
Day 4 - Retirement Plans
Retirement is a very intimidating issue for most Americans, because of this, they try to avoid it. Every year the amount of Americans unprepared for retirement continues to climb. A 2010 report claimed only 69% of ï¿½working householdsï¿½ were saving for retirement (Carty 1). The number of Americans unprepared for their future has been projected to be as high as 49% in 2012 (Ellis 1).
Luckily, there are many ways to prepare for retirement. Here are three options to consider:
- Consider retirement or pension options through your employer
- Start an individual retirement account (IRA)
- Simply save (Using a savings account)
Many employers provide retirement or pension plan options (many also do not). The first step in preparing for the future is to ask about this and get all the information from your employer. Companies may provide a 401(k) or a traditional pension plan. If either is an option, get the facts from your employer. Make sure nothing will happen to the money you have contributed if you were to leave the company. If your money will be safe, start contributing; you may even be get a tax break.
An alternative to enrolling in a retirement plan through an employer is to save on your own, through an IRA. These are similar to retirement plans with companies; youï¿½re just doing it on your own. An IRA can be setup through your bank. You decide how much money to contribute to this account on a monthly basis, and your bank can transfer that amount from your checking or savings account to the IRA. There are two options for an IRA, a traditional or a Roth. The difference is the way taxes will affect your account, meet with an advisor at your bank to decide what's best for you.
Lastly, there's the most traditional way of preparing for your future, saving. Spending less money now generally means you will have more money in the future. If the options above arenï¿½t viable at this point in your life, prepare this way. Set aside what you can when you can, and always consider long-term implications when you make a purchase.
Preparing for the future and retirement is something more Americans need to be doing. Take charge now and find out which option is best for you.
Carty, D. (2012, March 9). Americans Not Ready for Retirement - Econwatch - CBS News. Breaking News Headlines: Business, Entertainment & World News - CBS News. Retrieved February 18, 2013, from http://www.cbsnews.com/8301-503983_162-20000180-503983.html
Ellis, B. (2012, May 10). 49% of Americans aren't saving for retirement - May. 10, 2012. CNNMoney - Business, financial and personal finance news. Retrieved February 18, 2013, from http://money.cnn.com/2012/05/10/retirement/saving-retire/index.htm
Top 10 Ways To Prepare For Retirement. (n.d.). United States Department of Labor. Retrieved February 18, 2013, from http://www.dol.gov/ebsa/publications/10_ways
Published Feb 22, 2013.