How to Have a Solid Retirement

Posted on Thursday June, 24 2010 | 0 Comments

Americans are way behind the ball when it comes to being prepared for retirement. According to the 2010 Retirement Confidence Survey, "Fewer workers report that they and/or their spouse have saved for retirement (69 percent, down from 75 percent in 2009 but statistically equivalent to 72 percent in 2008). Moreover, fewer workers say that they and/or their spouse are currently saving for retirement (60 percent, down from 65 percent in 2009 but statistically equivalent to percentages measured in other years). "  Such statistics are troubling.  If you find yourself among those that are in this situation, please take heed to the following suggestions.

  • Enroll in work sponsored retirement plan.  Many current employers offer a 401K.  This is a tax deferred retirement account that allows you to deposit pre-tax money for retirement.  Some employers offer to match up to a certain percentage of your income.  3% is a common percentage.  While the money you withdraw is taxed as ordinary income upon withdrawal, using the tax deferral advantages of a 401K is a great choice.
  • Start a Roth IRA.  A Roth IRA is different in that the money deposited is after tax money.  However, upon withdrawal the money is tax free.  A Roth IRA can also be passed to your heirs tax free.  It also allows withdrawals tax free for things such as first time homebuyers and post secondary education.  Another feature is you can withdraw contributions (not earnings) any time without any tax consequences.

For more information on retirement options click here.