You don’t have to know much about planning for retirement to be familiar with the terms social security, IRA’s, Roths and 401Ks. The four options are vastly different and when you can receive them can be changing as well. For years, the age was 65 in order to start collecting social security but that has recently been changed to 67. Since the government is in control of this retirement fund, the age requirement could change again. You may be more wise to invest in a 401K in Marysville CA where you have more control.
You may be more familiar with social security because every job that you have held since you were old enough to pay taxes, a portion of that check has gone to the social security administration. The problem is, even though you have been paying all your life, it will not be enough to support you in your golden years. That is why there are great government incentives to invest in other funds.
A great way to invest is with a 401K feature that most full time jobs will offer their employees. If you plan on working for a company for any length of time, make sure they offer this type of benefit. You can put money into this account straight from your paycheck, much like a social security deduction, that is not taxed. There is a maximum that you can put into your account each year, but the great incentive here is that your employer can match this investment up to a certain amount. What’s better than free money from your employer?
Another way to invest for retirement are in Roths or a Roth IRA. Both are an Individual Retirement Account, but the IRA, much like a 401K is not taxed until you start withdrawing. A Roth IRA is taxed when you put money into the account and then when you reach 65 1/2 years of age, you can start withdrawing without paying taxes on the amount.
It has been said that you can literally pick your retirement stock options blindfolded and do much better than you would from not investing in your future at all. It is never too late to start investing, but investing $5 today will earn your more than investing $20 next week.
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