Don't put all your eggs in one basket
Planning for retirement can be intimidating. Here are some investment ideas, from Consumer Reports, that lead to accumulating a solid nest
Contribute to your 401(k)
If your company offers a 401(k) plan, enroll in it and have money taken out of your paycheck automatically since it won’t be taxed until it’hs withdrawn. Contribute as much as you can afford, especially if the employer matches up to a certain amount. As your salary increases throughout the years, make sure you increase the percent you contribute.
Look into IRA's
Consider opening an or individual retirement account (IRA). For this year, you can contribute up to $5,000 a year into an IRA, and an additional $1,000 if you are older than 50. There are two primary types of IRAs: traditional and Roth. Each has their advantages and disadvantages, and the main difference between the two investment vehicles are related to taxes. The money you contribute to a Traditional IRA is not taxed until you withdraw it and with a Roth IRA the money is taxed when it contributed but withdrawals are tax free. You can not contribute to a traditional IRA past age 70 /1/2, and you can takeout money from Roth IRA at any time without being hit with a fee.
Consider SEP IRAs
An SEP IRA is a retirement plan for self-employed and small business owners. Regardless of whether you're contributing to a retirement fund, with this plan, you are allowed to contribute up to 25 % of your income (up to $50,000). You can also consider a SIMPLE IRA which is based on contributions up to $14,000 if you're 50 or older.
Have your spouse chip in
Even if your spouse isn’t working, he or she can still contribute to an IRA fund. Your spouse can make a deductible IRA contribution of up to $5,000, ($6,000 if age 50 or older), as long as you file for a joint tax return and the working spouse earns enough to cover the contribution.
Consider non-retirement accounts
If you feel adequately invested into retirement funds, and want to invest a little extra money as a precautionary back up, you may want to consider putting some money aside in nonretirement accounts. Nonretirement investments are the same investments you would find in a retirement plan, such as stocks, bonds, mutual funds, ETF's, CD's etc. The main difference is the taxes associated with income earned and capital gains.
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