Retirement Plans

Retirement planning has always erred on the side of conservatism, with investors buying into investment vehicles that have been traditionally representative of retirement savings. Recently, however, a groundswell of entrepreneurship and risk-taking has brought a number of new 401k investment options to the forefront.
To prevent investors from depleting their retirement savings, the IRS imposes a penalty of 10% for making any withdrawals or distributions from your retirement plans before you reach the age of 59.5. There are, however, exceptions to every rule it seems when it comes to the tax code
A beneficiary is a recipient of your assets upon your death. Many believe that setting up a will and naming beneficiaries in there is enough to properly transfer assets at the time of your death; however, this is not true.
The 401k plan is an excellent method for saving for retirement – as long as your current employer offers sound investment options that allow you to diversify and assume as much risk as you can tolerate. However, employees who are not happy with the current state of their 401k plan may want to consider a 401k rollover to get their funds into better investment vehicles for their specific needs.
A defined benefit plan provides an employee with a set amount of money in the form of an annuity once retirement kicks in
A direct rollover is a method for transferring assets held in one retirement plan to another; direct rollover rules typically allow investors to avoid taxes on the transaction and may be prompted by job changes, changes in financial situation, or preferable terms in the new retirement plan. For instance, by making a direct rollover to IRA instead of taking a cash payout, individuals can defer taxes on both earnings and contributions for the amount of the direct rollover.
An employee stock ownership plan, or ESOP for short, is a stock bonus plan that invests corporate profits back into the stock of sponsoring employer by rewarding employees with company stock

The fixed amortization method of determining substantially equal periodic payments is probably the most popular method out of the three available. The annual payment is derived by amortizing the account balance over a pre-determined number of years using the selected life expectancy table(uniform, single life, or joint and survivor) and interest rate that you choose. Once the annual payment is determined for the first year, it stays fixed for the remainder of the plan.

Retirement planning has been diluted to a very simple, least common denominator. As time goes on, more and more retirement savers are seeing their retirement portfolios as a grower, not protector, of wealth. This thinking leaves future retirees to believe that their portfolios have to outpace inflation, when in reality, their portfolios have to outpace their own lifestyle inflation.
For most Americans, social security benefits are an important part of their retirement plan. Whether this fund is your primary retirement account or a small portion of what you plan to live on during the later years of life, you need to use calculate social security benefits to find out what amount you can count on each month.
Tim Ord
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