7 Things You Need To Select The Right Retirement Plans
1. Your Expected Retirement Costs – Choosing the right retirement plans should include an evaluation of your expected retirement costs. These costs may be different for each person, and the ideal plan for your retirement will allow you to save the amount of money that you expect to need once you decide to retire. Some plans may not offer investment options that will provide the return needed to reach the desired account balance. Make sure that you include all of the possible expenses faced after retirement; otherwise you could choose a plan that falls short.
2. Your Anticipated Plan Contributions Each Year – The plan that you choose should factor in your yearly expected contributions and ensure that your retirement goals can be achieved. Some plans may limit allowable contributions to a small amount on an annual basis, and some plans may allow catch up contributions once you get close to retirement age.
3. Tax Planning Advice – Finding the best retirement plans should include professional tax advice. The consequences of poor retirement planning can be large tax liabilities, at a time when your income is needed the most. Some plans utilize pre tax contributions that are taxed upon distribution, while other plans use contributions made on an after tax basis so withdrawals are not taxed after retirement. Tax advice can help you choose the right plans for all of your retirement needs and goals.
4. A List of Retirement Goals – Before deciding on the best plan for your financial security during retirement you will need to create a list of your retirement goals. Will you want to travel? Will you keep a second home? Will you work at a part-time job or take up a hobby with related expenses? Your retirement goals will affect the best plan for your future, and the amount of retirement income you will need to live on without financial problems after retiring.
5. A Professional Financial Planner – A financial planner can help you choose the best retirement plans for your unique goals and financial needs at this stage in your life. A financial planner will help you to set financial goals, and then outline steps you need to take so that these goals can be easily met.
6. A Good Retirement Calculator – A good retirement calculator can help you accurately calculate all of the expenses you will have after you retire. This should be one of the first steps in retirement planning so that you do not end up short on funds in your golden years. These tools can help identify unexpected costs and expense that you may not have considered.
7. Your Annual Income Amount – Some retirement plans have certain restrictions concerning annual income amounts for eligibility. Many 401K plans, IRA accounts, and other retirement options may not be open to high income earners. Some plans may be intended for small business owners or self-employed individuals, while others are intended for high income employees, and still others may be ideal for low-income wage earners. You will need to know the annual amount that you earn to determine which plan is right for your retirement needs.