Lets start off with the easier question. Where do you stand financially? Answering this question requires you to look in to the savings you have gathered while you were working and seeing how many debts you need to pay off before you can freely invest your money in to stocks, some business and so forth. Once you know how much money you have and how much freedom you have to employ it, you will be able to better develop a retirement plan for yourself. This brings us to the first option; the do it yourself investment plan. Exploring this option is a great idea if you are independent and want to manage your finances and investments on your own. For this plan you need to have a sound knowledge of the general condition of the economy, the trends of the stock markets, the possible effects of recession and inflation and what businesses are flourishing at the present time. In recent years, more and more people are investing their retirement funds in to real estate because while this initially requires a slightly larger investment, it promises large returns and there is a minimum risk of losses.
If you are near your retirement years, you have probably already heard about the 401k retirement plan. In a nutshell this is a retirement plan which incorporates both employer matching and employee contributions in to accounts and this is the plan being offered by most companies today. Before you agree to the 401k retirement plan from your company however there are a few things that you should be aware of. In this retirement plan the amount contributions per year is limited and taxes are paid only when you withdraw cash. Furthermore, investments can only be made in the areas mentioned in a list given by the employee with options such as bonds and stocks.
For those individuals who have not been offered a 401k retirement plan from their company there are other options too. One great option that has gained massive popularity recently are the traditional IRAs and more importantly the Roth IRAs. While the traditional IRAs have a few drawbacks, the Roth IRAs are a more workable option. The best way to determine which retirement plan is the best for you, research, analysis and judgment according to your specific requirements is the key.
James T Monaghan is an investment advisor with 20 years of experience in investments. He is particularly interested in pacific life annuity and aig annuity.
