If you are nearing retirement, or want to make sure that you are financially prepared…
Do you want to know how you can start saving for retirement early? A supplemental retirement plan will give you the financial security that you need later on in life, and you can request one from your place of employment today. Here is some information on how these plans work.
A supplemental retirement plan allows you to defer part of the funds that you would be receiving from your paycheck before taxes are taken out of the funds. The taxes on this income are deferred until you withdraw the money for this account, and you will be able to automatically save for retirement while you work. And, since taxes are not due on the money right away, you are able to make larger contributions to the account, which means you will have even more saved up when it is time to retire. Investment earnings are not taxed right away either, which means they are left in your account in order to generate more money for you.
If you are creating a supplemental retirement plan for yourself for 2007, you can not deposit more than $15,000 into the account. Each year, this number varies slightly, and in most cases, your place of employment will match the funds that you have saved each year, so that by the time you retire, you will be able to live comfortably. The most common form of this is the 401k, which is quite common in most offices. However, the 403 (b) is also an option if you want a supplemental retirement plan that will give you the money that you need for retirement, or in an emergency.
There are a number of investment choices that come along with this retirement plan as well. You can choose to invest your money in real estate funds, stocks and bonds, or money market funds, depending on the amount you are willing to invest, as well as you financial interest. Keeep in mind that a monthly fee may be attached to these investments, so be sure to factor this in when you’re figuring out your amounts for retirement. When you are investing, it is best to meet with an accountant or financial advisor to make sure that you are making the right choices with your money, and to learn ways to tell whether or not your money is growing for you.
Remember that you can always change your mind when it comes to your supplemental retirement plan. If you want to change your retirement plan, or increase or decrease the amount of money you are putting into the account each month, it’s up to you. You will just need to contact your human resources office about a month in advance from the time you want the change to take place. For more information on how a supplemental retirement plan can work for you, visit www.fidelity.com.