Creating a Viable Retirement Savings Plan

Everyone needs a retirement savings plan to prepare for the later years. However, many people are still at odds over the best methods and plans to use when trying to save for retirement. Should one follow other savings plans besides a conventional savings plan? How much can one depend upon his or her pension when factoring a savings plan?

Perhaps most importantly, when should one begin saving for retirement in order to accumulate an amount that allows one to live the rest of her or his days comfortably?


Using Investments for Retirement Living

One option retirees need to consider when they implement a savings plan on their retirement is investment. There are many ways to invest such as through bonds, ETFs (exchange traded funds), mutual funds and stocks. If investing, one should decide the level of comfort he or she has with risk to determine what type of investment is best. One can also put money into retirement accounts such as a 401(k) or an IRA, both of which come with certain tax stipulations.

It is usually recommended that one invest in a combination of stocks and bonds for a savings plan. Hard assets such as gold and real estate are also options, but they are usually not as good for a retirement investment. There are also other retirement investment accounts besides these options, but they may not have the same tax advantages as IRAs and 401(k)s, so one should keep this in mind when determining the best investment.


Other Retirement Savings Plan Options

One can also use CDs to create savings plan for retirement. A CD, or certificate of deposit, is an investment a bank will give someone for holding his or her money for a certain amount of time. A CD can be inside an IRA. As an IRA, one can put money into other kinds of investments in order to further build wealth. If one is comfortable with risk, an IRA may be the better choice between the two.

Ideally, a retiree should start a savings plan when he or she is in his or her twenties. No matter the age, one needs to know a few factors to help create a viable plan.

These factors include one’s current age and income, the desired retirement age and income, life expectancy, the expected pension and expected social security. These factors will help the future retiree know how much to set aside each year.


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