Retirement is the start of a new stage of life. It is life after working. Retirement allows more time to enjoy other interests in life. You can never start too early planning your retirement. Planning early allows for adjustments in any financial situation. Learn about the type of plans that meet your needs and start earning towards your future.
Federal Government Retirement Resources
- Prepare for Retirement
- Plan for Retirement
- Retirement Planning
- When to Start Receiving Benefits
Retirement Organizations and Associations
- California Public Employees’ Retirement System
- National Active Retirement Association
- National Institute on Retirement Security
- Association of Retirement Organizations in Higher Education
- Teachers Retirement Association
Retirement Savings Plans
With an IRA retirement account tax is deferred and individuals can take advantage of compounding interest. IRA’s are individual sponsored type retirement accounts. Contributions are made separate from employee salary deductions. They are great for small businesses and the self-employed. To ensure your IRA is tax-deductible make no withdrawals before 70 ½. IRA’s deposits are also capped at $6000 a year. You must hold a Roth IRA for a minimum of five years before making withdrawals or you’ll incur heavy penalties.
The 401k is tax deferred until the benefits are paid out. A 40k has many options such as, stocks, bonds and mutual funds. Employees don’t have to worry about losing a 401k when moving to another job. 401ks are easily transferable. Some employers will even match an employee’s contribution into the 401k. With a 401 k you can risk penalties for withdrawing money early. Investment opportunities can be limited when investing in safe returns.
The 403(B) is a plan available for non-profit employees and those in public education careers. It is a tax advantaged plan. You can make a larger contribution than an IRA. Some 403(B) plans allow contributors loans. With other plans you are not penalized if you wait after the age of 70 ½ to make withdrawals. In the 403(B) you must make withdrawals at 70 ½. This plan doesn’t have many options and employers determine when employees can receive employer contributions.
Contributions of up to 25% of income are eligible for deposit in the 457 plans as long as it’s not more than $8000 per year. The 457 has a catch up provision. That allows those who failed to meet maximum contributions to contribute up to $15000 annually in the three years up to retirement age. One of the great advantages over other plans is the ability to make withdrawals before 70 ½ with out penalty. When considering the 457 plan beware there are limits to rolling over this plan when moving to another job. Also if you invest in an annuity you are subject to a fee from the insurance company for early withdrawals.
Thrift Savings Plan
The Thrift Savings Plan is one of the few plans that allow withdrawals at 55 without penalty. This plan is a tax deferred savings plan and has lower fees than other plans. If you are in the military your contributions can be matched. If you leave service you can have the Thrift Saving Plan roll over into a 401k. When considering the Thrift Savings Plan understand your investment choices are limited. Once you leave service you cannot contribute to the plan unless you transfer it to another 401k.
Life After Retirement
There is life after retirement. You can stay active and even continue to earn money. Retirees have the opportunity to reinvent themselves. Maybe you’ve always wanted to paint, travel, dance or just spend more time with family, especially the little ones. If you ever wanted to volunteer and never had the time you can combine your thirst for travel and volunteer in another country. This is the time to be creative and a bit daring.