Account
Retirement Benefits: Should You
Invest?
Let’s face it: Most people are not going to receive a pension
from their employer when they retire. The trend has been
falling away from pensions for some time now, but with the
present economic turmoil and the number of companies struggling
or altogether going under, most of us can wave our pensions
goodbye. That leaves a great many of us looking at account
retirement funds and questioning if they are worth investing
in, considering the volatility of the stock market and the
economy at this point.
The easy answer to this question is YES, it is a good idea to
put some money into an account retirement fund so that you have
some savings when you are ready to retire. However, many people
are wondering if they will be able to retire at all because
they have very little saved up, if anything. If you are one of
those people, then it is time to consider asking your employer
about a 401K or setting up an IRA for yourself.
Getting your employer to open a 401K and match your
contributions is the easiest route to go, but it is not
difficult to open an IRA if that is not an option. Even if you
own your own business, you can have a retirement fund to get
you through the later years. If you cannot count on your
employer to help take care of you after retirement, then you
have no choice but to take care of yourself, and that has to
start right now. Even with the current economic situation, it
is better to have something in savings rather than nothing at
all.
There is little difference between a 401K and a traditional
IRA. Your money goes into a 401K without paying taxes.
With a traditional
IRA, you pay taxes on the amount contributed but then are given
a tax deductible for the same year. You come out the same in
the end, which means you will pay taxes at the time you
withdraw the money.
If you think you will be in a higher income bracket by the time
you retire, then you should check into a Roth IRA, which will
allow you to pay taxes on contributions at your current income
bracket and withdraw funds later on tax free. You also have
more access to your money before retirement than with other
accounts.
When deciding where to invest your account retirement funds,
you can choose safe bonds and stock options until you have more
confidence in the market. This will allow your money to grow,
at least a little, until the economy rebounds and things look
more prosperous.
In the end, no matter what the economy looks like, it is a good
idea to start saving towards retirement so you are not one of
the many that worry they will not be able to retire at
all.
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