Make Retirement Planning A Breeze
Retirement planning has become one of the biggest worries of the current working population. The traditional option available for retirement planning is IRA. However, some experts also suggest that you opt for Roth IRA instead. This is not all, there are 401k options available with your employer. Apart from this, SAT and SIMPLE are other options that you should consider for your retirement planning. We will be checking out all these options in brief below.
IRA- You can contribute to the traditional IRA along with your spouse if you prefer to do so. Here, you will have to pay a tax on the compensation you receive but that would not be applicable once you are aged 70 or more. If you qualify, you can also make the traditional IRA contributions deductible. Your total contribution for the year should not be more than the total taxable compensation or $5,500 if you are less than 50 years of age and $6,500 if you are more than 50 years of age. Money can be withdrawn at any time.
Roth IRA– this is slightly different than the traditional IRA. Here too, you can contribute along with your spouse. However, there is no age limit for making a contribution which means that you can start rather early. Though the contributions are not deductible, you can withdraw money whenever you want. The rest stays the same as traditional IRA only. Apart from this, there is a rollover IRA which can be used to make contributions towards retirement.
SIMPLE– Known as the Savings Incentive Match Plan for Employees IRA, this is a special kind of IRA provided by the employers. If you are working in an organization that does not have more than 100 employees, then you can make use of the SIMPLE IRA to fund your retirement. This employee sponsored plan helps you invest and grow your money for retirement.
Here were some ways in which you can make the best retirement plan for yourself. Talk to a tax consultant in order to find the best retirement planning solutions for yourself. Remember, you can use a certain combination of retirement plans to give you the best benefits. While planning for your retirement, remember to keep your future earnings in mind. You can start early with the help of Roth IRAs. Moreover, make provisions for the changes in your life like marriage, kids and more. This will help you in making your retirement a breeze with adequate money
Blog written by Liz Soria #helpquickbooks
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