Retirement is something that you are never too young to think about. When it comes to investing in a retirement plan you must be sure to invest in the one that will best suit your present and future lifestyle. Account for unexpected expenses, penalty fees for early withdrawals or loans and the interest rates. The different types of retirement plans include; health savings account, Solo 401(k), SEP IRA, IRA, simple IRA, Roth IRA and 401 (k) /403 (b).
Save with the Health Savings Account
If your insurance is high deductible prone, then you will want to take the time to investigate a health savings account. This account will cover medical expenses if you need to withdraw the money. This covers co-pays as well. In the health savings account, you can add up to $3,350 a year for a single person and $6,650 a year for an entire family. Your money will accumulate over the years. Once you hit sixty-five you can take the money out for any reason and face not adverse actions.
Go Solo with the Solo 401(k)
The Solo 401(k) is best for one person owned businesses. The single owner can set up an individual 401(k) and add money as both the employer and the employee (double the savings!), up to more than $50,000.
Simplified Employee Pension (SEP-IRA)
In this account, self-employed and small business owners get to save big for the future. This is done by adding up to twenty-five percent of the business’s income. This adds up nicely for the business owner, however, the employer’s contributions may not exceed $53,000.
Simplify Life with a Simple IRA
This plan lets in small employers (fewer than one hundred personnel) to installation IRAs with less paperwork. Employers need to either fit worker contributions or make unparalleled donations.
Which is Better? 401 (k) /403 (b)
401 (k) /403 (b) falls under some of the best retirement plan for teachers. These plans ensure that the money for your retirement is taken directly out of your paycheck. This simple payroll deduction allows you to save over $15,000 of your income before taxes come out.
This plan permits small employers (fewer than a hundred personnel) to set up IRAs with less office work. Employers should both suit employee contributions or make unequaled contributions. An employee can make contributions of up to $12,500. Extra money is allowed for persons over fifty.
IRA, Simple IRA and Roth IRA
Simple IRA- this plan allows small employers to get IRAs with much less office work. IRA- there can be up to $5,500 underwrote per year to an IRA. The best part is your money will cultivate free of taxes. With a Roth IRA, the money you add will be contributed after taxes are paid. This means no tax cuts for the money you put in. The plus side is the money you have saved will grow, with no tax payments required after you are fifty-nine and a half.