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Post-Retirement Planning

Table of Contents


Retirement is the graceful withdrawal from one’s current position or occupation or even from one’s active working life. A person can also become semi-retired by decreasing his or her work load or workload. But for many who would like to give it a try, they would usually resort to some sort of investment plan in retirement. Some plan on saving up their money so that they can use it when they need it most. Others opt to save their money in a low interest bank account where they can also withdraw some whenever they want. Yet, there are some who are not confident enough with their money management skills and thus opt to invest their retirement savings.


Retirement Funds

There are different ways of investing retirement funds. These include saving in a 401(k) program, IRA (Individual retirement account), and social security. One can also save in a traditional IRA, stock market, bond, real estate, commodities, and many more financial planning instruments as well. The aim of all these is to accumulate enough money for the retirement that would allow you to live your life comfortably.

All these options of saving for your post-retirement life, will depend on your individual situation and financial planning goals. If you are confident enough that you will be able to manage your post-retirement income in the best way possible, then you should save the maximum amount for your retirement savings. There are two types of retirement savings: those you get as a lump sum when you retire; and the other one is through pre-retirement income. In the former, your money is taken directly from your paycheck; while in the latter, your money is invested in an IRA and accumulates tax-free during your lifetime. So, it would be prudent to choose the saving option that best suits your financial needs and circumstances.

Roth IRA

So how can we start saving for our post-retirement life? One option is to open a traditional IRA account and save for retirement. When you retire, you can withdraw this amount without paying taxes. The Roth IRA option allows you to start saving for retirement immediately after you stop working, thereby reducing your taxes instantly.

Another great way to start saving for your retirement is by opening a Roth IRA account. You need to be aware that there are strict restrictions when it comes to Roth IRA contributions. One of these restrictions is the income or assets limitation. The assets that are allowed to be invested in a Roth IRA include your home equity, 401(k) s, IRAs, mutual funds, and other approved saving accounts. If you want to make sure that you are maximizing your post-retirement income, then it would be best to increase your retirement savings to include more assets such as stocks and bonds.

In addition to your Roth IRA, you can also opt for the traditional IRA. If you are still employed by the company that you’re working for at the present time, you can roll your earnings into a traditional IRA and use it to make retirement saving options. Your goal should be to reach your target retirement age. But if you are not working anymore, or have already stopped working, you can use a Roth IRA to reach your target retirement age.

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