Personal retirement accounts are considered to be the best option to save for the retirement. You will be able to live your life post retirement in a convenient way with these accounts. Here is a list of some of the retirement accounts you must consider investing in.
403(b) or 401(k) as offered by the employer
For most people, 403(b) or 401(k) is considered to be the best place for starting personal retirement accounts. The money is withheld with the aid of payroll deduction. As of the year 2015, you will be able to save up to $18,000 of the portal income annually. In case you leave the job, you will be able to roll this account into the individual retirement account (IRA) or 401(k) of the new employer. This account is usually offered by for-profit companies.
SEP IRA
SEP IRA or Simplified Employee Pension is considered to be one of the well-renowned accounts which are used by small business owners or self-employed individuals. The employer requires contributing up to 25 percent of the income. These accounts can be set up at ease. In case the business has employees, the employees should also be contributing to specific accounts.
Solo 401(k)
These accounts can be set up by a sole proprietor. It is possible to make a contribution as employer or employee in this type of account.
SIMPLE IRA
This plan enables small employers to set up individual personal retirement accounts with the least amount of paperwork. Employers will be able to match the contributions of the employee or make unmatched contributions. An employee will be capable of contributing up to $12,500.
IRA
You can contribute an amount of $5,500 every year post retirement in an individual retirement account. The money grows free from taxes. It is possible to contribute to both personal retirement accounts, 401(k) and IRA. However, if you already have a retirement plan at work, it is not possible to deduct the contributions of IRA from the taxable income in case you earn more than $71,000 every year.