Once you get a good job and get settled down into the life you love it is time to start thinking a little bit about retirement. It is never too early to start saving money. There are plenty of ways to go about saving your money for retirement, but here are some of the most common ones.
1. Investing Into 401ks
401ks are simple plans. Most employers will have some sort of 401k available for their employees. Basically if you sign up for the plan a small amount of money will be taken out of your paycheck each and every month and invested into the plan. It can then grow tax free until you withdraw it.
Every plan is different so talk to your company's human resources department to get the basics on your plan.
2. IRA Plans
IRAs and 401ks are very similar to each other. The major difference is that you have to set up an IRA yourself and invest into it outside of work rather than just have it all taken care of automatically by your employer.
3. Roth IRA Plans
Just like 401ks and IRAs you do not have to pay taxes on the interest you made on your investments. Unlike these plans however a Roth IRA lets you take out money from your plan without ever having to pay interest. You just need to follow the Roth IRA withdrawal rules to get a tax free income Once you retire. Of course because they let you get a tax free income later on you will not be able to write off the money that you invest into the plan on your taxes. So it becomes a question of when do you want to get your tax break.
4. Invest Into Real Estate
One other way to prepare for retirement would be by simply buying rental properties. A rental property is an asset that will keep appreciating over time and as the mortgage gets paid down you will see some good cash flow and equity from it.
5. High Leveraged Investments
There are a number of investments out there that give you a lot of leverage. An example would be stock options. While most people are probably better off not investing into things that give you a lot of leverage, if you put the time into it and are willing to learn it can be a great way of growing your money.
1. Investing Into 401ks
401ks are simple plans. Most employers will have some sort of 401k available for their employees. Basically if you sign up for the plan a small amount of money will be taken out of your paycheck each and every month and invested into the plan. It can then grow tax free until you withdraw it.
Every plan is different so talk to your company's human resources department to get the basics on your plan.
2. IRA Plans
IRAs and 401ks are very similar to each other. The major difference is that you have to set up an IRA yourself and invest into it outside of work rather than just have it all taken care of automatically by your employer.
3. Roth IRA Plans
Just like 401ks and IRAs you do not have to pay taxes on the interest you made on your investments. Unlike these plans however a Roth IRA lets you take out money from your plan without ever having to pay interest. You just need to follow the Roth IRA withdrawal rules to get a tax free income Once you retire. Of course because they let you get a tax free income later on you will not be able to write off the money that you invest into the plan on your taxes. So it becomes a question of when do you want to get your tax break.
4. Invest Into Real Estate
One other way to prepare for retirement would be by simply buying rental properties. A rental property is an asset that will keep appreciating over time and as the mortgage gets paid down you will see some good cash flow and equity from it.
5. High Leveraged Investments
There are a number of investments out there that give you a lot of leverage. An example would be stock options. While most people are probably better off not investing into things that give you a lot of leverage, if you put the time into it and are willing to learn it can be a great way of growing your money.
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For more on saving for retirement read this article on Individual Retirement Plans
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