What is your retirement fund looking like? Is it as financially secure as you would like, or do you think you need a new strategy? Your current plan might not be the right one for you, so you might want to consider switching to something else, such as a self-directed plan, which will offer more flexibility and control with your retirement fund options.
The Employee Benefit Research Institute released the results of a survey in 2019, showing that only around half of the current employees have a solid understanding of the benefits they receive. Getting a better understanding of the options and the types of investments available to you will allow you to get the most out of your benefits and achieve the ideal retirement.
Most people are at least aware that virtually all plans involve a tax advantage, whether when you are making withdrawals or upfront during the savings phase. For example, Roth plans are funded with after-tax money but offer tax-free withdrawals to make up for it. Traditional 401(k) plans offer the opposite: contributions with pre-tax dollars, yet a decrease in taxable income. Is either of these right for you?
As for other retirement fund options, you should also consider the types of investments you’ll be allowed to make. Investing in real estate, for example, comes with stringent regulations with some regular retirement funds. However, you get more control over real estate investments with a self-directed plan.
Retirement Fund Options for Knowledgeable Employees
Some highly-knowledgeable employees prefer to buy Guaranteed Income Annuities to create their pensions. Unfortunately, employers do not offer GIAs, so it’s something employees do on their own. It involves trading a lump sum at retirement and purchasing an immediate annuity for receiving a monthly payment for life. An example would be at age 50. Then, you would start making premium payments until you are 65 or whenever you plan to retire. With each payment you make, you will bump up the amount of payment you will be guaranteed.
However, not everyone is comfortable with the kind of arrangement that a GIA involves. Depending on where you work, you might have to accept the plan that your employer offers. Of course, you could always supplement that by opening another IRA account or even opting for a self-directed retirement account, either IRA or Solo 401(k).
Find out more about your retirement fund options, including self-directed investing and checkbook control at Rocket Dollar. In addition, there are a couple of pricing options depending on the level of benefits and control you need.