According to the United States Department of Labor, creating and sticking to a plan to save money is the most important step in preparing for retirement. Successful retirement requires planning, commitment and stable finances.Know More
According to the United States Department of Labor, retirees need at least 70 percent of their pre-retirement income to maintain their standard of living after they stop working. Putting a set amount of money into a savings account each month is an effective way to start saving for retirement. The Department of Labor strongly advises workers to leave their retirement savings untouched until they retire; withdrawing the money early can cause a loss of interest or tax benefits.
Money can be put into an Individual Retirement Account, or IRA, which can provide an easy way to save for retirement. If an employer has a retirement savings plan, such as a 401(k) plan, an employee may want to sign up and contribute to it as much as possible. Compound interest and tax deferrals can cause money to accumulate over time. Each plan is different, so a potential retiree may ask his employer for details before signing up. An employee may also ask about an employer's pension plan. A retiree also has access to Social Security benefits, which are on average 40 percent of what was he earned before retiring.Learn more about Financial Planning
The government offers taxpayers the 401(k) as a retirement savings plan sponsored by their employer. Using this program, workers are able to save and invest a portion of their paycheck before the employer withholds taxes. According to The Wall Street Journal, the employer matches a certain percentage of the savings invested by the employee.Full Answer >
A Roth 401(k) retirement plan is similar to a regular 401(k) plan, but with the timing of the plan's taxation representing a significant difference. The traditional 401(k) plan requires before-tax paycheck contributions with no tax liability placed on the earnings until funds are withdrawn. The Roth 401(k) plan requires after-tax paycheck contributions, but the withdrawals are tax-free.Full Answer >
To make a withdrawal from a 401(k) retirement plan, borrowers must contact the human resource office of the employer or the investment company hosting the plan, complete a withdrawal form and provide reasons for the withdrawal if younger than 59 1/2. Fees may apply when withdrawing funds early.Full Answer >
Under the Internal Revenue Code, a 403(b) plan is a retirement plan that can be offered to employees of public schools, employees of certain 501(c)(3) tax-exempt organizations and eligible church ministers. This type of retirement savings plan allows participants to make pre-tax contributions, and earnings on the contributions are not taxed until they are distributed from the plan.Full Answer >