Even if you wait until you’re well into your 60s before retiring, you still have several years to go – according to the average life expectancy. So how will you spend the last couple of decades of your life? Hopefully, you’ve made some good retirement investment options to enjoy your golden years.
There are social security retirement benefits, but they will only replace approximately 40% of your pre-retirement earnings. So it’s essential to have additional savings, too, in the form of savings, investments, pensions, etc. Some retirees find themselves seeking part-time employment because they either didn’t save enough or want to stay active for as long as possible.
Whatever your plans are in the future, you need to understand your retirement investment options. A 401(k) is a workplace retirement plan. What you contribute should be matched by the company. So make sure you contribute enough to get any free money you can from the company. However, there are traditional and Roth IRAs if it’s maxed out or you don’t have this type of plan.
The good thing about an IRA is that you can set one up at a bank or brokerage firm. Some firms will even allow you to direct the investments yourself. As a result, you will have more flexibility with your retirement investment options. Or, if you prefer, hire someone to make the investments on your behalf. IRAs, in general, provide a broader range of possibilities than workplace retirement plans do. However, the IRS may limit an individual’s contribution each year.
Retirement Investment Options for IRAs
You’re probably already aware that taxes work differently depending on your retirement plan type. It comes down to whether it’s a Roth or traditional account and what tax breaks you are eligible for.
Those who run a small business or are self-employed have many custom retirement accounts, including SEP IRA, SIMPLE IRA, Solo 401(k), and more. These plans are easy to set up and don’t cause any hassles for the small business owner or employer. If you are the employer and have employees, some administrative duties will be your responsibility. Keep this in mind when looking over retirement investment options for small businesses.
As for the actual investments themselves, what you are allowed to invest in and how much control you have over those investments, as mentioned above, will depend on your type of retirement account and how much control you have over it. A few things to consider include retirement income funds (RIFs), a type of actively managed mutual fund, real estate investment trusts (REITs), crypto-currencies, and annuities.
Learn more about these types of funds and accounts and other retirement investment options at Rocket Dollar. It’s the best place for those interested in self-directed accounts.