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Retirement Planning: Tips for Selecting the Right Retirement Plan

Retirement planning is not that easy. But it is a necessity for those who prefer to live large well into their years of ripeness. When a middle aged couple choose between retirement plans, they want to make sure that they select the right one for them. The following retirement planning tips and steps will help you to get ready for old age in no time at all.

May 16 2014, 4:52am CDT | by

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Retirement Planning: Tips for Selecting the Right Retirement Plan

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Retirement Planning: Tips for Selecting the Right Retirement Plan

Retirement planning requires setting aside some income for rainy days that are bound to come later on in life. “Grow old with me…the best is yet to be!” So go the lines of a song. Yet to think that one day not very far off in the future you will be confined to a rocking chair and have no source of income is very frightening indeed.

Therefore the best strategy here is to start retirement planning wisely for a financially safe and secure tomorrow. And since it never rains but it pours, to stash away a nest egg for difficulties such as a life-saving operation or costly medicine may be the best policy.

Retirement plans are inspired by fear of old age and the degenerative diseases that accompany it. When one doesn’t have a job anymore, and the bones in one’s body start creaking a little too much, it is a retirement plan be it an IRA or a 401(K) that will make sure that you get to enjoy your golden years.  

After all youth does not last forever. Ultimately, the machinery that is the human body wears itself out. The mind too needs a rest after years of psychological struggle coping with the ideas and emotions generated by a complex society.  

So it is here that a retirement plan comes in handy. Now, the question is which sort of plan suits you, the planner. Well, that is a matter of conjecture that must be beefed up with experience and information. Read on in order to get a feel for the process.  

IRS defines the following types of retirement plans

  • Individual Retirement Arrangements (IRAs) 
  • Roth IRAs 
  • 401(k) Plans 
  • 403(b) Plans 
  • SIMPLE IRA Plans (Savings Incentive Match Plans for Employees) 
  • SEP Plans (Simplified Employee Pension
  • SARSEP Plans (Salary Reduction Simplified Employee Pension) 
  • Payroll Deduction IRAs 
  • Profit-Sharing Plans 
  • Defined Benefit Plans 
  • Money Purchase Plans 
  • Employee Stock Ownership Plans (ESOPs) 
  • Governmental Plans 
  • 457 Plans
  • 409A Nonqualified Deferred Compensation Plans

With a huge population approaching retirement age, the net that is to be sewn piecemeal to protect them from financial ruin in their old age is of paramount importance.  

It takes more of a toll on women than men. A lady earns less than a man. Then if she works part-time due to domestic responsibilities, there are little to no savings on that job.  

Finally, females are unfortunately seen as the sacrificing agents in today’s society despite steps taken by the feminist movement to eradicate this shameless tendency.  

Coming to the actual procedures, they consist of saving a certain fixed amount every month beforehand. By the time you reach senescence you will have a nest egg from which to visit the Bahamas or book a farmhouse.  

A retirement plan is not necessarily for you alone. You can become a caretaker of your highly aged parents or your progeny if you want to via their beneficial effects.  

And the choice you make from the long list of retirement plans available will determine how the profits accrue to your side in the end. Make your decisions with wisdom and forethought for your last days on earth depend on them.  

The retirement planning ways are many but we have distilled them into three basic objectives. By their proper application in your life you may save a lot for your senescence. The only thing you have to be careful of is putting your money into risky schemes that may swindle you. So, keeping the precaution of playing it safe in mind we present before you the thrifty three:

1. It is never a good idea to wait till the last moment before catching a train. And so it goes in financial funding for the future. Start in your middle age by saving up at least 20% to 30% of your annual income. And by setting it aside somewhere where there will be no danger to its holistic value, you will create value for yourself in your years of helplessness. 

2. While a bank is a good place to invest your money, not just any old bank will do. You have to make a survey and choose a reputable financial center to guard your cash for you. In today’s world the robbers who loot banks have the most cutting edge equipment to crack through the most foolproof safe or vault. Therefore choose the best in terms of banking establishments and rest assured that your money is in good hands. 

3. Last but not least get some insurance so that you or your loved ones will be taken care of in case of an emergency such as an accident or illness. It is never too late to start saving up little by little in the form of payments for life insurance. Your spouse and children deserve some guarantee of financial coverage in case the worse happens.

IRS can also help with choosing a retirement plan.

 

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<a href="/latest_stories/all/all/20" rel="author">Sumayah Aamir</a>
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