Retirement Income Must Be More Than Social Security
A vast majority of all Americans once they reach retirement age will depend on their Social Security benefits in order to help finance their retirement. They will also rely on Social Security benefits to help provide for their beneficiaries as well. Moreover, many people are now relying on retirement plans set up by their employers in order to help provide them with additional funds as part of their retirement income.
However, if you are looking for a way to increase the amount of income you have once you retire then you may well want to consider actually setting up your own personal retirement plan as well. These plans known as Individual Retirement Accounts (IRAs) have several features and benefits which will help to provide you with a much more secure and stable financial future once you retire. Below we will take a look at the various kinds of IRAs that are available.
Traditional IRA
This can be set up and then monies contributed to it by someone who is receiving taxable compensation throughout the year and is also under the age of 70 1/2. Also if you should happen to be married and yet not working then your husband or wife can actually help to fund yours for you. But in order to do this they will also need to file a joint income tax return at the end of each year. You may also discover that in fact these contributions can be deducted from your tax return, however it will depend solely on if you meet certain requirements set out by the IRS.
As well as being able to fund your own IRA through annual contributions, you can, if you wish and happen to be employed and have a company retirement plan, fund it with assets from this. But if you are unsure it is best that you discuss matters with your financial advisor who set up your plan for your and your employer's administrator of their plan.
Roth IRA
Although you do not receive any tax benefits up front as you do with the traditional IRA, it is still very similar to it. But there are also some differences with this IRA compared to the more traditional version.
1. You are still entitled to fund your Roth IRA even after you have reached the age of 70 1/2.
2. You do not need to start withdrawing or distributing your assets from this retirement income fund once you have reached 70 1/2. Whilst with a more traditional IRA you will need to start taking the minimum withdrawals from the fund once you have reached the age of 70 1/2.
So as you can see from above these are just a couple of ways that a person can actually help to boost their retirement income. Certainly for many people being able to live a comfortable life during their retirement is very important in this day and age. With people living for a lot longer, many older people are trying to find ways so that they do not have to become dependent on their children. |