Plan for Retirement

 

When considering retirement you might think that you are either too early or maybe too late. Well - you are not too early or too late - right now is the time to get moving on this goal. Of course, the earlier you start the better, but that doesn't mean that you can't start to build toward the future you envision for yourself starting right now.

For the purposes of this module, we want to focus on the three most prevalent forms of retirement funds that will be at your disposal while you are working - The 401K, Traditional IRA, and the ROTH IRA. 

If you are working for a company or an organization that offers a 401k or a 403b plan this is most likely going to be the single most advantageous retirement plant that you will ever be offered. If your employer offers a "match" this means that you will get an instant 100% rate of return on your money with zero risk - this money is then invested into the market at your discretion. There is probably no other investment that you will ever be offered that gives this rate of return with zero risk.

 

Think about it. 

 

100 dollars in your paycheck is taxed and you end up with about 72 dollars. 100 dollars into your 401K with a match is 200 dollars that are then invested and can grow for you over the next 20 or 30 years. Seems like a no-brainer right. 

After you take advantage of an employer-sponsored plan you still have the option of an IRA or a Roth IRA. You also have the ability to invest in these retirement plans if your employer does not offer a 401k or a 403b. Basically, if you had a job in a given year you are able to invest for your retirement.  There are costs and benefits associated with all of these retirement plans and we encourage you to take advantage of our module that specifically focuses on retirement planning for more detailed information on each of these plans.

 

Learning Checkpoint:

Optional: Learn a little more about the differences between a 401k, IRA, and a Roth IRALinks to an external site.from Investopedia.