5 Best Retirement Plans For Individuals
Curious about the 5 best retirement plans for individuals? Government and military workers’ retirement plans often come in the form of pensions. Those who work in the private sector, however, may have to choose from a list of different retirement plans. Below are five retirement plans that offer different benefits. It may be that one of these is the best choice for you.
- Savings bonds. When considering different retirement plans, investing in savings bonds may not immediately come to mind. The truth is, though, that savings bonds have many advantages. These include cashing these in when emergency funds are needed, rather than drawing from an existing retirement fund, and the different tax laws that apply to savings bonds.
- Traditional IRAs. IRAs have always been good retirement plans. Taxes are deferred on the money invested in a traditional IRA until it is withdrawn. Further, your taxable income may be lowered when you invest in an IRA.
- Roth IRAs. Roth IRAs are frequently considered when looking for good retirement plans. However, tax issues are different with Roth IRAs, plus there are restrictions on who can open a Roth IRA. However, if you are eligible for a Roth IRA, when the money is withdrawn, you will not have to pay federal taxes.
- 401k. With a 401k, you decide how much to put into the account, and that amount is automatically deducted from your paycheck. The money goes into investments that either you or your employer have chosen. Further, the employer matches your contributions, and no taxes are assessed until the money is withdrawn. All 401k investments are considered long-term investments.
- Defined benefit plans. Defined benefit retirement plans operate on the premise that a specified monthly benefit will be available upon retirement. That amount can either be an exact dollar amount or it may be calculated through a formula that takes salary and years of service into consideration.