(Newswire.net — April 7, 2021) — At some point in your life, you’ll need to start planning for your retirement. These are some of the best retirement options available to you.
1. The 401k
The 401K is one of the best retirement plans you can obtain. The reason is that most 401K plans come through an employer, and the employer puts money toward the employees’ 401K each payroll. If you obtain an employer-issued 401K, you can save money toward your retirement and receive “free” additional money toward it at the same time.
You can also obtain a 401K if you are self-employed. You’ll lose the extra money, but you can still reap the benefits of tax-free contributions while you save for when you no longer wish to work. One great idea is to open a 401k that will allow you to invest in cryptocurrency. According to SoFi, cryptocurrency investments can bring amazing profits to you in the end.
2. IRA
An IRA is an individual retirement plan. Anyone who is of age can open an IRA account. Generally, you can save up to $6,000 a year or $7,000 if you are older than the age of 50.
There are several types of IRA accounts that you can choose. A traditional IRA will be funded before your income is taxed. A ROTH IRA is different in that it’s funded with income that has already been taxed. A SEP IRA account is a Simplified Employee Pension, and small businesses usually offer it.
3. 403b Pension Plan
The 403b pension plan is reserved for certain employees who work for the private sector. These employees include teachers, church organizations and those who work for tax-exempt organizations. The 403b works similar to the 401k plan, and it has the same contribution limits. In 2021, workers can contribute up to $19,500 to the plan. The total of the employee and employer contributions cannot exceed $58,000 in 2021. This may be the option you need to go with if you work in one of these sectors.
4. 457b Plan
There is another type of retirement plan that’s exclusively for firefighters and some workers inside hospitals, charities, unions, and the like. This plan is funded before the income is taxed, much like some of the other retirement plans. However, it does not work exactly like a 401k plan, and it actually has quite a few benefits to it. For one, you won’t have to pay a 10 percent penalty if you leave a job and have to withdraw your funds before you’re 59 1/2 years of age. You may be interested in opening this type of account if you work for any of the above-mentioned organizations.
5. An HSA Account
A health savings account is another retirement account you may want to think about opening. This type of account is for the health costs that might come your way after you retire. In 2021, you’re allowed to put away up to $3,600 for the year. Some employer-sponsored HSAs include contributions from the employer. The contribution amounts vary between employers.
These are only a few of the options you have for retirement. You can talk to a specialist about some additional options that may be available.