Types of Retirement Plans to Consider

Do you feel sleepless when you think of how you would manage your life post retirement? Are you thinking over how you could make your post retirement life more pleasant? If yes, all you need to do is develop a retirement plan. A slight course correction now can have profoundly beneficial effects eventually.

Here are some retirement plans to consider. Read them, study them, and then make your choice.

401(k) plan:

This is a retirement savings plan sponsored by employers. This is really a simple way to go.  You have to deposit a part of your income into a 401(k) plan account that is tax-free. When you make a deposit in the account, you have the freedom to choose how that money will be invested.

403(b):-

This is a U.S. tax-advantaged retirement savings plan. This has a similar tax treatment as the 401(k) after the Economic Growth and Tax Relief Reconciliation Act of 2001. This is for educational institutions, non-profit organizations, corporative hospital service organizations, and self-employed ministers.

Defined Benefit Pension:-

This retirement plan is sponsored by employers. Under this plan, employers have to provide a specified monthly benefit to their employee on their retirement. That benefit is predetermined and based on employee’s tenure of service and age and earnings history.

Life Insurance Plans-

Making regular contributions to a life insurance policy is an excellent way to safeguard a person’s way of life in case a loved one (and possibly the main breadwinner) should die unexpectedly. And it can be viewed as a form of saving that kicks in precisely when you need it to.

Dividends Stocks-

Investing in the best long term dividend stocks can be another great option to consider. You can invest a portion of your income in the best dividend paying stocks every month and you will receive dividends monthly, quarterly, or half-yearly. If you do not have any specific needs at the present, you can reinvest that amount; you will be putting the powers of dollar-cost-averaging and compounding to work for you. These are two of the most powerful principles in all of investing. And when paired in this fashion, the eventual results are astounding.

Now, it is up to you to decide which option appears to you most suitable. However, we would strongly suggest that any plan involve investing in the best long-term dividend stocks. This option requires the most amount of effort on your part, but it is also the one that usually results in the greatest rewards.

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Types of Retirement Plans to Consider

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