Retirement is a wonderful phase of life, but if you want this phase to be comfortable you will have to make sure you have the necessary finances ready. Here are a few benefits you can consider as income sources for your retirement:
This is one thing you will contribute to, all your working life. But during retirement, you actually get to collect these payments. In fact, this should be the foundation on which you need to build your savings and investments. Make sure you pay for the specified number of years and retire at the right age.
Retirement is a stage where your focus has to be on your health. Considering the rise in healthcare expenses, Medicare should be an integral part of your retirement savings. Ideally, you should sign up when you are about to turn 65 if you want to avoid paying higher premiums. Till then, however, you may need an alternate health insurance plan.
A way to save money from your paycheck before you get it in your hand, this is one plan that helps you get tax breaks. Moreover, your employer will also willingly contribute a significant portion to this plan for as long as you work for him. You can save up to $4,500 on your tax bills if you contribute more.
Although the contribution limits of this plan are the same as the traditional 401(k), the tax treatment is completely different. You don’t have to pay any tax on the amount that gets accrued in your account, provided your retirement account is at least five years old.
The tax treatments of Individual retirement accounts are very similar to that of 401 (k). However, this has a lower contribution limit. $5,500 is the amount that you will have to contribute per year to your IRA. If you are above 50 years of age, you can contribute $1,000 extra. The best part is that you can always rollover your 401(k) balance to your IRA account whenever you change your job.
If you don’t want to pay tax during your retirement, a Roth IRA would be an ideal retirement account. Nevertheless, you will have to pay your tax in advance. You can also convert your IRA account into Roth if you are ready to pay the tax on such conversion.
This will be your emergency fund account from which you can manage your unexpected expenses such as repairs or medical bills. Apart from stopping you from taking on debts during emergencies, this will also keep you from raiding your retirement accounts early.
There is no retirement benefit like paying back your mortgage before your retirement. You can enjoy life without debts. If you own your home you can also take out a reverse mortgage and get some extra cash to spend. Get in touch with a reverse mortgage lender through reverse mortgage leads and find out how much you can get.
Having a pension can contribute significantly to your retirement security. However, if you are not fortunate enough to get one, you can always take up a part-time job during your retirement. You can earn some cash and also meet new people. It can help your savings grow and protect your retirement nest egg for longer.