How To Retire Rich With Your Retirement Account And Annuities
If you want your savings to grow for retirement
, you'll have to throw out the conventional "three-legged stool" mindset - Social Security and pension plans are no longer reliable, while traditional investment strategies could result in financial loss rather than monetary gain because of the aftershocks of the recession. Building your nest egg, even if you're only a decade away from retiring, is still possible. You can earn more money by buying high-growth and dividend-paying stocks, as well as making the most out of your retirement savings and going for alternative sources of income.
You can maximize retirement savings that are under favorable tax conditions, and do it before taxes increase in 2011. 401K plans and IRAs haven't been valued as highly as today. IRA and 401K accounts allow participants tax-sheltered contributions and further tax deferment until the money is withdrawn. Tax-free Roth IRAs are a step up the IRA ladder.
If you earn enough, you can place $5,000 in your IRA account and a maximum of $16,500 in your 401K this year. Workers aged 50 and above have higher deposit limits, with $6,000 for IRA and a whopping $22,000 for 401Ks. If you can't save that much, you can boost your retirement savings and make up for the shortfall by using your 401K and IRA better.
Other investments may have fallen by the wayside in the wake of the recession. While some stocks can be quite beneficial to your finances, you'll need to remember that diversification is key, especially when you retire. If all your money's in stocks, you're living dangerously. A portfolio that's a hundred percent stock can leave you penniless. You can work with other investments such as annuities, which can help you create a pension and swap one big payment for a steady monthly income that can last you your whole retirement - the right annuity can do just that.
If you're going to retire in several years, you can still catch up on your savings and make good money before you retire. In addition to buying high-growth and dividend paying stocks, making good use of your IRA or 401K and adding to your income with annuityies and other investments is a good investment strategy.
by: Carina Smith
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