At some point in your life, you have likely been approached by someone, whether that be a friend or a family member, who had some financial advice to give you about retirement. It was likely paired with, “trust me, it worked for me!” or “I took a finance class in college, so I have a better idea than most!” At P.A. Berg Retirement Solutions, we acknowledge that there are some pretty finance-savvy individuals out there — but none of them are registered investment advisors or certified financial planners.
When it comes to retirement planning, there are plenty of routes that you can take, but there is really only one plan that will work for your unique financial situation — and P.A. Berg Retirement Solutions is here to help you find that plan.
In today’s blog post, we are going to outline a few of the more popular retirement saving accounts so that you are a little more familiar with some of the potential options that could be right for you!
401(k) Or 403(b) Offered Through Your Employer
One of the most common retirement savings accounts that people find themselves using is 410(k) or 403(b) plans offered through their employers. One of the best parts about these plans is that the money is withheld from your paycheck, meaning that you can save pre-taxed money without having to contribute to the account out of pocket. Additionally, when you leave your employer, you can rollover the account to a new 401(k), 403(b), or an IRA.
An IRA is an account that allows you to contribute tax-free money that will grow in the account. In a standard IRA, you can deduct your IRA contributions from your taxable income — although there are some caveats that do not allow you to do so, as in if you make over $71,000 annually or are covered by another retirement plan at your place of employment. Additionally, there are many different kinds of IRAs Like:
A Simple IRA is an account that is typically offered by small employers with less than 100 employees. In Simple IRA, employers must match their employee contributions, or make regular unmatched contributions.
A SEP IRA is used most commonly by people who are self-employed. SEP stands for simplified employee pension, and it allows you, as the employer, to contribute up to 25 percent of your income or $53,000 dollars (2015), whichever is less.
In a Roth IRA, you contribute after-tax dollars and get no tax deduction on the contributions that you make. Additionally, the money grows tax-free and can be withdrawn tax-free after you turn 59 ½. Unlike other IRAs, there is no mandatory withdrawal age at 70, and the money can grow until you choose to withdraw it.
There Are Many Plans — But We Can Help Your Perfect Plan
Yes, above retirement savings accounts are the most common, but there are also many more (and much more to the ones that we have just discussed). That being said, it is important to get in touch with a registered investment advisor or a certified financial planner to make sure that you are saving in the most efficient way for your unique financial situation. So what are you waiting for? Contact us at P.A. Berg Retirement solutions and request a free evaluation from Pat Berg himself! We look forward to hearing from you.