Retirees need money to support their families and pay for their medical bills after requirement. This makes it crucial for them to plan to avoid a financial crunch after retirement. Many people, who can afford to put some money aside for investments, opt for annuity plans. An annuity is a form of investment that provides a certain amount to the people as income for a particular tenure. Annuity contracts can be purchased from insurance companies. The ‘immediate annuity’ offers payments for a certain period of time or for the entire lifespan of the individual. On the other hand, the ‘deferred annuity’ enables the policyholders to grow their money by earning interest. No taxes are levied on this form of investment until the time the policyholder wants to liquidate their annuity. It is advisable to weigh the pros and cons of an annuity plan before investing in it.
The Roth 401(k) plan is a new plan that has been devised to enable people to have tax-free investments and savings while they are on the job. It also provides them with the opportunity of getting a tax-free income after their retirement. This plan has all the tax benefits of a standard Roth IRA, but allows more annual contributions without applying any income ceiling. The latest trends in the financial market have resulted in high tax brackets for retirees.
Many homeowners who are 62 years of age or above obtain reverse mortgage loans by using their home equity. Reverse mortgage refers to a plan wherein a mortgage company or lenders pay the homeowners to stay in the house. Typically, this loan becomes a source of tax-free income and the homeowners do not have to give up their title for the same. The only disadvantage of this type of loan is that in the event of the untimely death of the homeowner, the loan is passed on to the heirs. The heirs have the option of either repaying the loan on their own or sell the house and settle the loan.
Individuals can consult with a professional financial expert who can advise them about the various retirement plans.
Related Articles of Interest :
-
Retirement Income Planning
10 August 2010 8:30 PM |
No Comments
When talking about retirement income planning, investment is the key word, since the majority of the people depend upon their investment decisions for income after retirement. Very few of them, however, succeed in turning their investment into a profitable venture because the majority of investors...
-
Buy Retirement Annuity
10 August 2010 8:30 PM |
No Comments
Buying an annuity is linked with a person’s age. When the investor is young the expectations are more. Since the investor is employed or running own business, the risk factors take a secondary position. However, when a person is about to retire, the earnings become...
-
Cash For Retirement Annuities
10 August 2010 8:30 PM |
No Comments
Since the average life expectancy is on the increase because of higher and sophisticated standards of living. Lifetime annuities are mainly for funding retirement. There are two types of lifetime annuities — fixed and variable. A very important investment option available for those people who...
-
Retirement Plan Services
10 August 2010 8:30 PM |
No Comments
It is natural for people to get caught up in the demands of today and forget about tomorrow. To afford the necessities that one gets accustomed to during youth, after retirement, an individual needs to start planning and saving as early as possible. Employers and...
-
Retirement Plans
10 August 2010 8:30 PM |
No Comments
Retirement is one of life’s biggest worries and retirement plans play a crucial role in providing a source of income in a person’s retired years. Retirement can span up to a third of a lifetime. Retirement plans are much like saving for a 25-year vacation....
-
401K Retirement Plan
10 August 2010 8:30 PM |
No Comments
How often do you think about your future? Perhaps all you think about is the immediate future of bills to be paid, or the post-retirement luxuries you hope to enjoy. But to enjoy such luxuries you need to have an investment plan in place. Otherwise,...
-
Retirement Planning Services
10 August 2010 8:30 PM |
No Comments
Financial services companies usually offer retirement planning services. More often than not, they charge fees for this purpose. When opting for these retirement planning services, make sure that they have experience in investment management and financial/retirement planning. In addition, they should specialize in a personal...
-
Roth IRA Rules
10 August 2010 8:30 PM |
No Comments
If you are thinking in terms of saving for your retirement, then the Roth IRA can prove to be a fruitful option. You can contribute a certain amount of your compensation income into a Roth IRA account. The amount contributed is nondeductible and so Roth...
-
401K Retirement Plans
10 August 2010 8:30 PM |
No Comments
A 401K plan is a retirement savings plan that is funded by employee contributions and a matching contribution from the employer. Contributions are made from pre-tax salary and the funds grow tax-free until they are withdrawn. Companies, non-profit and other tax-exempt organizations can establish these...
-
Small Business Retirement Plans
10 August 2010 8:30 PM |
No Comments
Small business retirement plans are an ideal way for employers to retain employees and also set up a retirement account for themselves. The simplest retirement plan is the Simplified Employee Pension (SEP) plan. Though it is designed for self-employed individuals, partnerships, sole proprietors and independent...