Top Retirement Savings Strategies for a Secure Future

Although traditional retirement plans are becoming less common, it’s crucial for today’s younger generation to prioritize saving for their future. Here are straightforward, easy-to-understand retirement savings options to help you prepare effectively:

Employer-Sponsored 403(b)/401(k): This is one of the simplest ways to start investing for retirement. Contributions are deducted from your paycheck, often with employer matching. When changing jobs, remember to roll over the funds into your new employer’s 401(k) or your personal IRA.

Solo 401(k): Self-employed individuals can set up an individual 401(k), contributing as both employer and employee, with annual limits up to $54,000 (or $60,000 for those over 50).

SEP IRA: Small business owners and freelancers often choose SEP IRAs. Employers can contribute up to $54,000 or 25% of income, whichever is lower, making it an easy option for self-employed workers.

Simple IRA: This plan suits smaller companies with fewer than 100 employees. It allows simplified administration, with employers either matching contributions or making fixed contributions up to $12,500 (plus $3,000 for those over 50 in 2017).

Individual Retirement Account (IRA): IRAs are key retirement investments, permitting contributions up to $5,500 annually (or $6,500 if over 50). Investments can include cash, bonds, mutual funds, and stocks. If you lack employer-sponsored plans, IRAs offer full tax deductions, subject to certain income limits and coverage rules.