Planning your retirement means planning for your future goals, income, wishes, expenses etc. when you make retirement plans you need to consider: the daily expenses that will incur, what will be the source of income, treatment of any medical condition, your assets and the investments. Basically, you have to make a detailed account of your future cash inflows and outflows and based on that choose your plan.
IRA retirement plans
IRA retirement plans are the plans developed by an individual for his/her retirement. Individual retirement accounts IRAs are the tools that the individual uses for their retirement saving. IRA retirement plans have contribution limits set by the government annually. The contributions are bound to change with inflation. Some of the best IRA retirement plans/choices are as follows.
- Traditional IRAs
Developed by individual taxpayers, these plans are tax deductible. You don’t have to pay the tax initially. However, you pay it when you withdraw the amount from IRA retirement fund, and the amount is taxed as income.
- Roth IRAs
Roth IRAs are also developed by individuals, and they are not tax-deductible, but the eligible distributions are free from tax. This means that you are contributing to your Roth IRA retirement fund from after-tax money. The benefit is that, as the amount grows, you don’t have to pay taxes on capital gains and you are also not liable to pay tax when you withdraw the money.
- SEP IRAs
Simplified employee pension IRAs are set up by small business owners and self-employed people for employees. Employers make a contribution to their employee’s retirement account from a percentage of their salary and are thus saved from business income. But the tax is charged as income on withdrawals. A significant point to be noted is that the employees cannot make a contribution to this account.
- SIMPLE IRAs
These retirement plans are also developed by self-employed individuals and small business owners for their employees. The employer makes the contribution in retirement savings account, and the employees are also allowed to make the contribution. The contributions are tax-free.
Above is a glimpse of 2017 retirement plans. You need to choose the best IRA retirement plan after studying each and every plan in detail and understanding what suits your needs and goals.