Best retirement plan options
There are a lot of retirement plans for you, but if you decide to stick with only one plan, it can’t be of much help. A good retirement plan does not consist of any one asset but comes with a stack of income sources made and planned to meet your goals. Here are some best options for you:
Pensions: Pensions are the easiest among the lot as it does not require much of your effort in managing them. The funds are managed professionally when the employer finishes contributing all the money. You only need to stay on the job as long as possible, then retire and collect. But everyone does not get this option.
Unlike government and municipal workers, pension plans are less popular among corporates. Many pension schemes are not as generous as before. Most of them do not offer the cost of living adjustment, so the first amount remains same as you will get at 80-90 years. To avoid problems, you must save additional funds.
Defined Contribution Plans: If the defined contribution plan is of 403b or 401k, then you are saved for future. You need to choose if you should participate, which plan option is suitable for you when to change those options, and how much to contribute. These are considered as the best retirement plans for pensions by many financial advisors. Contributions will be deducted from your paycheck. Thus you won’t have to worry about the same. So, you will not need any ongoing effort to invest. But there is a limit for contribution.
Roth IRAs: This is an independent retirement account which is funded with taxed dollars. This allows you to enjoy the benefits of tax-free growth and tax-free withdrawals. It is recommended for you to do a 401k employer plan and added to that a Roth IRA if your income level admits. In this way, you will get a sensible plan which will allow you to make pre-tax contributions to the employer plan and after-tax contributions to the Roth plan.