What Are My Retirement Planning Options?

There are a variety of retirement planning options that can meet your needs. Your employer funds some; you fund some. Bear in mind that in most cases, withdrawals made before age 59½ are subject to a 10 percent penalty, and withdrawals usually must begin by April 1 of the year after you turn age 70½. Income taxes are also due upon withdrawal in most cases. This list describes 10 of the most common options.

A defined benefit pension normally provides a specific monthly benefit from the time you retire until you die. 

A money purchase pension provides either a lump-sum payment or a series of monthly payments. 

Your employer funds a profit-sharing plan; employee contributions are usually optional. Upon your retirement, you will normally receive your benefit as a lump sum. 

A savings plan provides a lump-sum payment upon your retirement. The employee funds savings plans, although employers may also contribute. 

Under an employee stock ownership plan (ESOP), an employer periodically contributes company stock toward an employee’s retirement plan. Upon retirement, employee stock ownership plans may provide a single payment of stock shares.

Tax-sheltered annuities or 403(b) plans are offered by tax-exempt and educational organizations for the benefit of their employees. Upon retirement, employees have a choice of a lump sum or a series of monthly payments. 

Individual retirement accounts are available to virtually any wage earner at any salary, up to certain income limits. They are funded completely by individual contributions. IRAs are usually held in an account with a bank, brokerage firm, insurance company, mutual fund company, credit union, or savings association. 

Self-employed plans were specifically designed for self-employed people. They are funded completely by wage-earner contributions and provide either a lump-sum payment or periodic withdrawals upon retirement.

Simplified employee pensions, or SEPs, were designed for small businesses. Like IRAs, they can provide either a lump-sum payment or periodic withdrawals upon retirement. 

Savings Incentive Match Plans for Employees, or SIMPLE plans, were designed for small businesses. They can be set up either as IRAs or as deferred arrangements — 401(k)s. 

Annuity Contracts can be utilized on an Independant basis,in the past were used for what was called a pension.

If you are considering Retirement Planning, call for a free consultation today.