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Getting Started on Saving for Retirement

Imagine the ideal retirement. It can come in different forms, like a fraction of your life spent on vacations and seemingly unlimited leisure time.

So, how does one get to that point in our lives, exactly? What questions do we have to ask ourselves to achieve the life we’ve always wanted?

Most especially, what are the specific plans you should take to reach the financial goals you want?

Personalize your ideal retirement

You’ll be earning for your retirement for the rest of your professional life. You need to take the time to picture what you really want by then.

Write all the lifestyles you want as soon as you retire – it’s much more possible now than it’s ever been.

No matter how your dream could be, list them down for consideration. From establishing your own business to becoming the next big music producer, anything is fine for now.

Even if you write 30 things, you’ll find yourself slashing out those you couldn’t go through with wholeheartedly. Eventually, you’ll eliminate enough scenarios to create a solid picture of at least one thing you actually want.

When you’re able to focus on the scenarios you couldn’t erase, the next steps could feel less like chores.

Keep your goal SMART

We’re all familiar with the SMART method. With specific, measurable, achievable, relevant, and time-bound goals, you’ll be closer to finding the ideal retirement fund for you.

Focus on the things you control, such as keeping track of your income and setting the proper standard.

Use budget planners, worksheets, and retirement calculators to determine how you can keep track of this.

Choose your Retirement Plan

Here’s a crash course for retirement plans that offer tax advantages for saving in specific retirement accounts:

Employer-sponsored retirement plans

Pension plans require an employer to make contributions to funds set aside for the worker’s benefit. These are tax-advantageous accounts that only requires you to pay taxes when you’re ready to withdraw the funds.

Most companies contribute around 3 percent of your monthly income, but experts recommend saving between 10 and 20 percent, instead.

These plans can get transferred without tax consequences into IRAs.

401(k) Matches have employees contribute the same percentage of an employee’s contribution. These are commonly around 6% of an employee’s salary.

You can withdraw 401(k)s with or without financial hardship, as long as you meet certain qualifications. These usually depend on your needs, accessibilities, and the amount you already have in your account.

Individual Retirement Accounts

If your employer doesn’t offer pension plans, you might be eligible for an IRA.

Traditional IRAs are for individuals and families who earn less money than they are able to gain every year. These deter taxes for until you’re ready to withdraw as long as you follow the rules.

You can begin making withdrawals from 59.9 years old without paying the early withdrawal penalty, although this requires taxes. Past contributed principals are also taxed.

Roth IRAs let you withdraw past principal contributions tax-free without an early withdrawal penalty. However, this stops you from replacing the funds you withdrew.

Additionally, there are tax consequences for investment gains or other funds that exceed past contributions.

Health Savings Accounts

HSAs help to pay for current and future health care expenses while still providing tax benefits. Contributions reduce your taxable income while deterring tax and able to get withdrawn tax-free as long as you use it for your health.

This doesn’t force you to use it for you to avail it. You can use whatever you have in your account for as long as you have it.

However, if you don’t use the HSA for medical purposes, you will have to pay ordinary income taxes. Plus, this would take 20% penalty if you took it before you turn 65.

Building emergency funds with this account can benefit those who have good health and low medical expenses. This provides funds to pay for health care expenses, which are of the highest priority upon retirement.

Retirement, Getting Started on Saving for Retirement | Finance BrokerageRetirement Plan Options for Entrepreneurs and the Self-employed


Savings incentive match for employees, or SIMPLE IRAs, are employer-sponsored retirement plans offered in small businesses. These are less expensive and less complicated than 401(k) plans for businesses who have 100 or fewer employees.

The employer must make contributions for up to 3% or a flat 2% of salary. This is whether or not an employer chooses to participate in the plan.

Contributions are made pre-tax and the money accumulates tax-deferred until retirement at 59 ½. If you withdraw these before that age, you’ll pay a 10% penalty fee.


With simplified employee pension, or SEP IRAs, those self-employed can make pre-tax retirement contributions for themselves and their employees.

SEP-IRAs have far less paperwork and no annual filing, compared to a 401(k)-retirement plan. Business owners can completely deduct contributions as business expenses, while employees don’t have to count them.

Contributions could be as much as 25 percent of their gross annual salary. Entrepreneurs

Employees that are 21 or older, worked for you for three of the past five years are eligible for contribution. Although, they also need to have gotten paid at least $600 in a year.

Keogh Plans

Named after Eugene Keogh, the man who created the plan, Keogh Plans are those for highly paid individuals like lawyers. Contributions could be from profit-sharing or money purchases.

You can contribute up to $54,000 a year as of 2019 or deduct up to 25 percent of your income.

Keogh plans can also be tax-deferred until retirement beginning at 59 ½ with a 10% for withdrawals beforehand. Some exceptions depend on your physical and financial health.

This can change in profit-sharing plans every year. You determine the percentage of profits to be placed, but contributions are required.

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