2 Kinds Of Retirement Plans To Choose From

Making sure that you have enough money for your retirement can be difficult; you really can't just wing it and hope that you have money. You have to plan and save so that you will have the money you are going to need. One way you can plan and save is to set up some kind of retirement savings plan. There are several kinds of retirement savings plans that you can choose from. Not all of them will work for all people, so even if you have an idea as to what you want, you are still going to need to talk to a financial planner to make sure you are choosing the right plan and to help you get it set up. 

401(k)/403(b)

401(k)s and 403(b)s are basically the same thing. The biggest difference between a 401(k) and 403(b) is that a 401(k) is offered at a for-profit company, while 403(b) plans are offered at non-profit agencies. They are both an employer-offered program, and in most cases, your employer will offer a matching program so they will put some money in your savings account as well as the amount you put in. The money you put in comes out of your paycheck pre-tax, so you never have it in your hands, which makes it easier to save. If you leave that employer, you can roll your account over to your new employer. 

SEP IRA

SEP IRA stands for simplified employee pension individual retirement account. A SEP IRA is a good plan for people who either own their own small business or are self-employed. You can set it up so that you can contribute up to a certain amount of your earnings every year. There is both a percentage cap and a dollar cap, and you can only reach one. There are various things that influence how much that is. For example, you may be able to put 20% of your earnings or $20,000, depending on which comes first. If you are a small business owner who is using this kind of retirement plan, you will have to offer it to any employees who meet the requirements. Your financial planner or accountant will be able to help you figure out which employees those are and how much you will have to do.

Making sure that you are planning for your retirement is important. No matter who you are, you are going to need to have money when you are retired, so the sooner you start planning the better off you are.