Did you know that 3.2 billion Boomers retired in the United States of America in the year 2020? Retiring from work is the goal of almost every adult in the United States, and there are certain strategies that you can take in order to set your personal finances up for retirement.
Knowing the types of retirement plans that you have access to is a great way to start on your journey towards portfolio diversification and relaxing retirement. If you’ve never navigated the financial industry or looked into retirement plans then that is okay.
You’ve come to the right place to learn about the most popular types of retirement plans and find which one is right for you. Keep reading this article to learn more.
The most famous and traditional retirement plan is the 401(k). If you’re an employee at a company then odds are that you have a 401(k) set up for yourself already because they’re easy to access and start. You can also ask your employer to match your contributions to your 401(k).
The only issue with a 401(k) is that you’ll have limited investment options if you choose this route towards retirement. You’ll get taxed on money that you pull out for your investment portfolio. You can learn more about your 401(k) options at Bogartwealth.com.
Traditional IRAs are another type of retirement plan that people tend to go with. They’re great because anyone can start an IRA and there are tons of investment choices for portfolio diversification.
The main drawback that you’ll experience when you get a traditional IRA is the contribution limits. You’ll be limited on the amount of money that you can put into it each month.
A Roth IRA is another great retirement plan that could be a good fit for your personal finances. You’ll gain some serious tax benefits if you choose a Roth IRA rather than a traditional IRA. You’ll have no problems withdrawing money from your savings in your Roth IRA and you won’t get taxed for that money.
You’ll also gain a much greater degree of flexibility when it comes to contributing more money to your Roth IRA. The main drawback is the lack of tax breaks for your contributions. There are also income restrictions in place for this retirement plan.
If you’re running a small business and you want to set up a retirement plan for your employees then you could always consider a simple IRA. These retirement plans are easy to set up for your employees and the contributions that your employees put towards the simple IRA get matched or guaranteed.
Choose From These Types of Retirement Plans for Your Future
Knowing the types of retirement plans that you can choose from will make your retirement much easier and more fun. There are certain retirement plans like Roth IRAs that allow for portfolio diversification, while others are more strict about how you use your money. Simple IRAs are a great choice if you’re a business owner that wants to provide more benefits to employees.
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