Will It Be Happily Ever After?
Living happily ever after includes finding the perfect partner and building a great life together. Financial security and being able to save for retirement are major aspects of building a happy life. This ensures that you have what you need to live comfortably, both during your working years and when both of you retire.
Learning about How an Annuity Works
An annuity works to provide you with a steady stream of money after you retire. When you look at all of the different retirement investment products available, an annuity is the most like a regular paycheck in that it pays out an regular intervals. You will work out how much you get with each installment and when those installments occur. This allows you to have the greatest control over your retirement savings in terms of ensuring regular payments to keep you going financially.
Throughout your working life, you will contribute to a fund that will be used to pay your annuity payment after retirement. There are different types of annuities that you will have to choose from, so be very mindful about understanding all of the terms and conditions that come with the different options. While annuities have their benefits in that they are very regular, they also have a reputation for having very high expenses, so take this into consideration when you are looking at annuity options.
Difference Between an IRA and a Roth IRA
If you are considering using an IRA to fund your retirement, you will have to choose between a Roth IRA and a traditional IRA. A Roth IRA is often preferred because it is more flexible. This is ideal for single people earning less than $99,000 per year and joint couple earning less than $156,000 per year. A traditional IRA has a maximum contribution amount that is determined by the IRS and you can put your contributions in before taxes are taken out. However, you will have to pay your taxes when you withdraw money in the future.
401k Information to Know
A 401k is another option that you can use to start saving for your retirement. This is a plan that your employer will sponsor so that you are able to contribute to your account directly form your paycheck. You will contribute a percentage of your payment before any taxes are taken out. You will pay your taxes when you choose to pull the money out of your 401k. You can earn extra money toward your retirement with this option because your employer usually matches your contribution to some degree every time that you make a contribution.
The investment options discussed above are the most popular ones that people use to save toward retirement. Which one is best for you depends on your individual goals for retirement and your financial future. You and your spouse will need to evaluate your financial situation together and pick out the investment strategy that will provide for both of you after retirement.