Retirement Plans

If you are already saving for retirement in the United States, great job! If you haven't started yet, now is the time. It's never too late to get a retirement plan. The United States offers different types of retirement accounts; the most common are 401k, Traditional IRA, Roth IRA, SEP IRA, Simple IRA, and Simple 401k.

Although each plan has its own features, there are three key points that make a big difference between them:

• Whether you pay taxes on this money when you start the retirement plan or when you withdraw it.
• The maximum amount you can save each year.
• The rules for withdrawing money without penalty or with penalties for early withdrawal.

The most popular plans among them are:

401(k): The 'Standard' Employee Retirement Plan

This is one of the most widely used plans by companies and the deduction is made directly from your salary. The money you accumulate in your 401(k) is tax-deductible, as taxes are paid when you withdraw it.

Traditional IRA: A Retirement Plan for Everyone

The Individual Retirement Account (IRA) is a good option when you don't have an employer, as it is a self-managed savings plan. The tax advantages are similar to those of the 401(k). Taxes are also paid when the money is withdrawn.

Both plans described above are qualified and involve the benefit of deferring tax payments during the funding stage of the plan. However, there are retirement plans that allow you to pay taxes on the contributed money during its growth stage and thus avoid tax liability at the time of distributions.

It is important to remember that there are other types of non-qualified plans that allow you to access supplemental retirement income while also providing financial protection for high amounts from day one of coverage in the event of death, illness, or even accidents, such as a Permanent Life Policy, which will allow you to build wealth and remain financially protected at all times.

For more information contact us.