Posted on: 30 December 2015
Whether you're in your 20s or heading into your 40s, it is never too late to start planning for your retirement. Even if you are self employed, there are things you can do to help save money in order to provide a good nest egg for your golden years. Here are some options for you to consider so that you'll be prepared when you reach retirement age.
Money From Employers
Many employers offer 401(k) plans designed to help their employees save for retirement. No matter what your age, it's recommended that you take advantage of these plans. Most employers will match whatever you deposit up to a certain percentage, and this can double the amount you save every month. Keep in mind that most plans come with a tax penalty if you withdraw early, and you should always read over the terms before you withdraw any money. Find out if your plan allows you to roll the funds over into a new retirement account if you change jobs. Otherwise, you may be forced to take your hard earned money out early and pay penalties and taxes.
If your company doesn't offer a retirement plan or you just want to set something up on your own, there are IRA and other retirement plans available for individuals. Consider getting a deductible IRA account, which lets you save money with after-tax dollars, and you can also claim these savings on your annual tax return as a deduction. This plan is ideal for people who do not have their own work plan and want to save a bit of cash when filing their taxes each year. Keep in mind that you cannot withdraw the money without penalty before the age of 59 1/2, and you must take the money out before you reach the age of 70 1/2.
Plans For The Self-Employed
If you work for yourself or own a business, you can still take advantage of several different retirement plan options. There are plans called Solo 401(k)s that will allow you to contribute to a personal retirement fund. These plans will let you put tax-deferred money away and can also be a big help when it comes to the end of the year's tax filing. Just like a traditional 401(k), your money can be invested however you choose and you can watch those savings grow over time. A simple IRA is another option that will help you save money, and you can change your savings options at the beginning of each year to fit your current earnings and goals. No matter which retirement plan you choose, putting money away now will help give you peace of mind and the cash you will need later to retire comfortably.
To learn more about you investment options, speak with a financial planner like those at Duff & Associates.Share