Trying To Move On

Individual retirement account commonly known as IRA refers to an account meant and used by a person for depositing his savings through regular deposits say yearly during his working life so a good balance could be achieved to sustain life after retirement. It is used as a tax saving tool too.

Planning for financial matters ask for timely decision making and when related with after retirement, more caution is required because better choice now will lead to best life afterwards. Individual retirement account is one such option which you can rely upon to have secure future.

Being statuary regulated, individual retirement account is a little complex issue but if you read all the related terms and qualifications thoroughly then little chances of being caught up in a fix will be there and further guidance from any financial advisor would drive things more smoothly.

There are various points that should be considered while zeroing in on retirement individual account. Important aspects are - your present salary level i.e. if you can open an IRA account or not, the type of account you will be selecting, maximum tax benefits you can achieve and the maximum contribution you can make in a single year in account etc.

There are several types of individual retirement account as Traditional IRA, Roth IRA, Sep IRA, Simple IRA etc. These have different provisions with regards to contributions like before tax or after tax, investment of amount, withdrawal of money, tax to be imposed and many others.

Individual retirement account can be a good way to save significant amount of tax because yearly contributions to this account are exempted from tax and is taxable only when amount is withdrawn at end i.e. when you are retired and as at that point you would be having low income so will be taxed at lower rate.

You can have your own portfolio as how to invest amount of individual retirement account and also can borrow money against this account though you must meet all the statutory compliances. In case of bankruptcy, IRA has similar protection as like of other retirement plans.

Amendments are being carried out periodically in related acts, to make individual retirement account more easy and accessible and its due to this effort that at present time IRA is out of popular and trusted ways of savings.

Good search work can ensure you best returns out of your IRA account and this particular option is suitable to almost all the categories of employees though there do exist a ceiling on maximum amount you could deposit in this account in one financial year but still its always worth your trust.

Retirement if planned well before time could be most enjoyable part of life and have the first step towards this, in way of individual retirement account

Author is a retired person. He shares his life experience in his website http://www.retirement-information.info/Retirement-Community.html on retirement planning

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The baby boomer generation has already turned 60 (at least the oldest of them) and is undoubtedly pondering their upcoming retirement.

Are they ready?

According to a 2006 study conducted by the Center for Retirement Research at Boston University, many are not.

The study shows that median assets in retirement plans-including 401k's and IRA's-are just $60,000 for workers in their 50's. While this is not an average, this figure clearly suggests that quite a few baby boomers might be unprepared to meet their retirement needs.

Most financial planners say that retirees should withdrawal no more than 4% to 5% from their nest egg each year to try and make their money last. At $60,000 this allows for about $3,000 each year in withdrawals (not counting earnings). That isn't even enough for play money.

What Happened to my Social Security and Pension Benefits?

While retirees can claim partial Social Security benefits at age 62, most baby boomers will have to wait until 66 or 67 before they can claim full benefits, not 65 as it used to be. Yet another bump in the rocky road to retirement.

Of course, there may be many baby boomers that are lucky enough to have a pension benefit waiting for them when they retire. But many more have experienced the disappointment of seeing their employer scrap their defined benefit pension plans in favor of the more common defined contribution style of a Profit Sharing or 401k plan. This move may have cost those relying on this benefit dearly.

What's a Boomer to Do?

Fortunately, not all is lost. But the obvious needs to be said: If retirement savings is lacking, people will need to work longer than they expected before they decide to hang up the suit and tie.

Here's an interesting fact from the same report by the Center for Retirement Research: For every year a worker delays retirement and continues to save and invest, monthly benefits increase by 7 - 8%.

Delaying retirement for 2 years? Go ahead and tack on an additional 15% in monthly benefits.

What about 4 years? Watch your potential benefits increase by one-third! You get the idea.

Looking Ahead

There is simply no replacement for disciplined saving and investing, and it's never too late to start. If you're young, start now-you'll be way ahead of the game.

If you're not as young and you feel you're behind, take heart. Revamp your budget to remove frivolous items and focus on packing away as much as possible into your retirement plans. It's a good idea to consult with a fee-based financial planner to discuss your situation. They will create investment programs tailored to your needs and will help put you on the right track.

Many baby boomers will have to modify their retirement goals and expectations to bring them down to more realistic levels. The younger generations should use this opportunity to learn and to take the time to consider where their own retirement is headed.

For more information on retirement plans, visit http://www.guide-to-retirement-plans.com

http://www.Guide-to-Retirement-Plans.com aims to arm retirement plan investors with the knowledge needed to understand retirement plans, pick the ones suitable for them, and save and invest properly to ensure a fulfilling retirement.

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