Retirement PlansThere are many different types of Retirement Plans available to individual investors. Each of them are equally important depending where you work and your retirement/investment style. Everyone that works should have a retirement account of some sort. If you're a small business owner or a person who works for yourself, you should have some type of retirement account in place. Here we explore a few of the better known accounts such as 401(K), 403(B), IRA and a Roth IRA. If you're not investing in one of these then you better get moving. Social Security isn't going to be enough for you to retire on that's for sure. Every little bit will go a long way. Just read the papers, listen the news. It's going to get really bad in the years to come. The better prepared you are the better off you and your family will be. Click on the Links below to learn more about these type of accounts. Ultimately what you want is to begin your planning as soon as possible. Below I also note a few tax changes that have taken place that will help you better plan.
IRA Changes Offer More Opportunities to Save and InvestYou can now rollover funds from your 401(k)directly into a Roth IRA. Beginning in 2008, you can rollover your job retirement plan directly to a Roth IRA. You will owe tax on the amount you are rolling over if it's not currently from a Roth 401(k)and 403(b) plan. You are eligible for this type of rollover if your annual income does not exceed $100,000. In addition, in 2010 the $100,000 income limit will be eliminated so that anyone can convert a traditional IRA or 401(k) account to a Roth. You can spread the tax liability over two years. I know this may sound a bit confusing so let's try to clear up a few things. The most common retirement plan is the 401(k), which is not taxed. Your employer will take out the amount you told them to take out for the plan prior to paying taxes. This money will grow tax free until you retire, at that time you will pay taxes. The Roth plans basically has you paying taxes now and in the future when you retire, you will not pay taxes. I hope this explains the difference between the two.
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