Finding a retirement plan that complements your retired life without burdening your existing lifestyle is not an easy task. Moreover, with a plethora of options available today, it has become very difficult to find the perfect retirement plan. Here are the top 10 retirement plans that are evoking great interest in the American market
Pension
One of the best options since very little contribution is required from you, pensions are predominantly found in the government jobs. Being less visible in the corporate world and other business houses, it is the most sought after options.
Defined Contribution Plans
Mostly made up of 401k and 403(b) plans, they put you in the driver’s seat while determining your retirement fund contributions.
Roth IRA
Applicable for contribution after taxes, they are popular due to the non-existent withdrawal charges once you have crossed the age of 59 ½ years.
Traditional IRA
A bit similar to Roth IRA in terms of unrestricted contribution limit, traditional IRA comes with an added advantage of tax deduction on contributions as well as earnings. The withdrawals, though, are taxable.
SEP IRA
Retirement plans for the self-employed, it is an excellent tool to save money from taxes, owing to the low-cost and ease-of-administration. It is one of the top 10 retirement plans with a huge contribution limit.
Nonqualified Deferred Compensation Plan
Termed a “Rich Man’s Roth IRA”, it is a tool you can turn to when you have maxed out your contributions to all the other retirement funds. Simply put, it is a deferral of your income; moreover, until some time in future, you don’t need to pay taxes till it’s deferred and eventually becomes tax-free.
Guaranteed Income Annuities
An annuity is a product that allows you to invest a sum today and get a guaranteed income stream when you retire as a monthly, quarterly, yearly or a lump sum amount
Cash-Value Life Insurance Plan
With this, you can pay for a policy that develops cash value. Once you have accumulated cash value, you can take a loan against your death benefit. This amount would act as an income source upon retirement.
Social Security
A staple of many Americans, it is a reliable source of income but has its own disadvantages.
Real estate
If you can afford it, real estate is one of the most stable sources of post-retirement income to live by. However, it has its own set of disadvantages.