9 Options to Fund Your Retirement

There are plenty of good options to fund your retirement. Sticking to a single plan won’t help you achieve your goals though. Here are 9 Options to help Fund Your Retirement.

Options to Fund Your Retirement with: Social Security

One of the options to fund your retirement is Social Secuirty. Nine out of 10 people over age 65 receive Social Security. Those benefits account for 39% of older Americans’ income, according to the Social Security Administration. Despite what might happen to Social Security, it’s still an extremely important part of retirement planning.

Fund Your Retirement with: Pensions

Pensions are the easiest retirement plans because little is required of you. The employer contributes all the money and the funds are professionally managed. All you have to do is stay on the job long enough to qualify, then retire and collect. But not everyone has this option.

Defined Contribution Plans

With defined contribution plans such as a 403b or 401k, you’re in control of your future. Many consider these the best retirement plans because most employers match a certain portion of your contributions. In many cases, it’s a dollar-for-dollar match

Roth IRAs Options 

A Roth IRA is an individual retirement account funded with taxed dollars. You enjoy the benefits of tax-free growth and tax-free withdrawals. Roth IRAs are also highly recommended for young retirement savers, whether or not they have access to employer sponsored plans. When you’re decades from retirement, “the ability to pay taxes today at a known rate and have it grow tax-deferred and come out tax-free at an unknown tax rate is wildly advantageous BUT…A Roth IRA isn’t an option that’s open to everyone.

Traditional IRAs Options 

Traditional IRAs have the same annual contribution limits as Roth IRAs, but they are not subject to income restrictions so anyone can contribute. The contributions are tax deductible and you enjoy tax-deferred growth, meaning you don’t pay capital gains tax but you have to pay tax on your contributions and earnings when you make withdrawals. Traditional IRAs are subject to required distributions at age 70 ½ and you can’t make contributions to the plan after that point.

Still, the traditional IRA is often the better option for people with a shorter time frame to retirement, such as those retiring in five or 10 years. It can be very advantageous for these contributors to get the combined benefit of the upfront tax deductions and tax deferral, Swanson said.