Sanibel Real Estate: Retirement Guide

Many people spend their lives working towards the goal of being able to afford to spend their older years in comfort, without having to work in order to survive. For the aging American population, the ability for the elderly to be able to support themselves financially is a concern that retirement plans aim to alleviate. Retirement was first introduced in the 1880s and has since grown to be somewhat common place. In the United States the retirement age is set at 65.

Conquer your workplace retirement plan

In one’s younger working years, one usually has the opportunity to contribute a certain amount of money each month that ends up going into a retirement plan. However, some of these retirement plans may seem daunting to the average man or woman on account of them not being explained clearly enough, or just being plain complicated. The first step to conquering one’s workplace retirement plan is to figure out how much one’s contributions ought to be. For example, in one’s 20s, the retirement contribution should be 10 percent, while in one’s 30s, the retirement contribution ought to be 15 percent. In one’s 40s, the contributions ought to be 20 percent.

The next step to conquering one’s workplace retirement plan is making sure that the appropriate fund is picked. For some people, this step is the most confusing because of all the options surrounding a 401(k). Experts advise workers to divide the options into various asset classes like bond funds, money market funds and stock funds.

All about IRA’s

An IRA is short for an investment retirement account, which is sort of a blanket phrase that refers to any kind of retirement plan that offers tax benefits for a person’s retirement savings. In general, the three choices that workers can encounter are to roll over, cash out or leave behind their 401(k), which is a type of retirement account. Cashing out is the worst option because people receive penalties, get taxed and lose out on future earnings the existing money can produce. Rolling over an IRA is the most advised option of the three because it affords the most control of one’s own money, without any drawbacks like penalties and the like. Finally, just leaving behind one’s account with an employer is still better than cashing it out, though one must have a certain amount of money to exercise this option.

Retirement planning decisions

A common predicament that workers face is when their company provides them a choice in their pension payout. The choice that workers typically face is whether to receive monthly annuity payments or just a simple lump sum. In the case of choosing a lump sum, it may be the better option if one is confident in being able to manage their money well. However, taking monthly annuities instead is the better choice if people cannot think sharply anymore, especially if they endure diseases like Alzheimer’s.

Tools & resources

It is imperative that workers have access to a diverse number of tools and resources when they plan their financial retirement, as they provide people with a way to organize their future. Some tools like videos that dispense retirement account advice are invaluable because they provide a direct way for workers to be able to see and relate to an expert giving them retirement advice. Another resource for workers worried about their retirement is the all-important financial calculator, which is available on a good number of investment retirement websites; this financial calculator helps workers calculate any number of things with regards to their retirement picture. For example, a financial calculator may be used to help figure out one’s savings from a 401(k) plan, or it may just be used to help a person figure out if he or she ought to invest in a traditional IRA or a Roth IRA. Equally important as a retirement tool is a checklist, which helps people who are planning for their retirement to keep a handy list of things they have to achieve on their way to retiring in comfort. One of the last resources that it important to have is a retirement budget, as it helps ensure people don’t get into money troubles later on.

To learn more about retirement, see these links.