According to the Internal Revenue Service (IRS), the earlier you start your retirement plan, the more financially secure you will be later in life. By making small contributions over the course of your career that are tax-deductible and that rely on tax-free compounding growth, you will be able to anticipate and maintain financial stability well into your older years, ultimately providing you with the means to enjoy a long, comfortable retirement with your loved ones living the exact life you’ve always dreamed of.
So how do you choose the best retirement plan companies who have those plans available? From Individual Retirement Arrangements (IRAs) to 401(k) plans, there are a wide variety of options available, offering a range of features, such as profit-sharing and matching contributions from your employer—but with so many choices, you need the skills and the knowledge to identify a plan that allows you to reach your long-term goals as an aspiring retiree. If you’re not quite sure where to start, read the following steps to determine the right retirement plan for you and your family.
Here are 4 steps to finding the best retirement plan for you and your family…
1. Assess Your Needs
Before making any decisions, assess your current financial situation. Use the Roadmap to Saving & Investing from the U.S. Securities and Exchange Commission, a guide to taking stock of your income, savings, investments, assets, and debt. Determine your anticipated Social Security benefits by using the Social Security Administration’s Calculator. Estimate your financial needs during retirement with the calculators created by the American Savings Education Council (ASEC). By utilizing these tools and resources, you will be able to determine exactly how much money you have now, and you should be able to determine what your long-term needs will be as you approach retirement.
2. Set Goals
After assessing your needs, the next step to finding the best retirement plan is to set some goals, such as a figure that you want to have saved in the next 5 to 10 years, as well as any long-term purchases or investments you would like to make like buying a home or a piece of property. Create a timeline for the rest of your life and identify these goals, being careful not to forget the needs of your family members, like sending your children to college and helping to support grandchildren. Set this timeline aside for later, as you will use it as you research potential plans and speak with a retirement plan company.
3. Research
As stated above, there are a wide variety of retirement plans available to you. You can begin your research by sifting through resources created by the IRS that provide an overview of options, including:
- IRAs
- 401(k) Plans
- 403(b) Plans
- SIMPLE IRA Plans
- SEP Plans
- SARSEP Plans
- Payroll Deduction IRAs
- Profit-Sharing Plans
- Defined Benefit Plans
- Money Purchase Plans
- Employee Stock Ownership Plans
- Governmental Plans
- 457 Plans
Each plan comes with its own features relating to contributions, deductions, deadlines, withdrawals, distributions, etc.
Something you should keep in mind is whether you would like to extend the period of income payout or increase the amount of regular income for a set period of time—depending on your needs and goals, you may choose one over the other.
4. Speak with a Professional
Once you’ve familiarized yourself with available plans, assessed your needs and set some goals, you should speak with someone that knows more about the topic than you. First, contact your human resources (HR) team at your employer; then, find a retirement plan company with a team of financial advisors that can assist you in aligning a plan with your goals.
Choose Your Retirement Plan Today
The easiest way to ensure you’re choosing the right plan is to contact a retirement plan company with experience and training in your respective field.