Top 4 Ways of Investing for Retirement

Investing for retirement is something every person should think about the minute they start earning money. Like it or not, there will come a time when working is no longer an option, thus making it necessary for an individual to survive without a constant influx of funds. This can be done by opting for various investment choices that will provide them with cash even without having to work.

That being said, following are some of the methods of investing for retirement.

Investing for Retirement ? IRA

An IRA or Individual Retirement Account is one of the most common ways to invest for retirement. What is great about this method is that the money isn?t taxed until the individual decides to withdraw the funds placed in the account. Typically, individuals can open up an IRA at a bank and place a specific amount on a timely basis.

This is usually divided between bonds and stocks, ensuring a specific amount of safety for the individual. The IRA also allows the investment of precious metals in the account for diversification. A different type of IRA called Roth has also been introduced in the market since 1998. With this type, individuals can grow their investment without the burden of taxes. Typically, an IRA is used by people who have no 401K or those that are privately employed.

Investing for Retirement - 401K

The only difference with choosing investing for retirement between a 401K and an IRA is the fact that the former is offered by an employer. Typically, 401K investment plans are enjoyed by employees through their employers. Hence, the process usually means that the fund are directly removed from the person?s salary and credited into their account.

The amount is also tax deductible and is often invested in various instruments that are left at the hands of the employer. Hence, individuals who are settled in a large company with a 401K should already be well off without investing further outside work. Like IRA, a 401K also has precious metal options but this should be discussed with the employer first.

Investing for Retirement - Bank Account

Some people maintain a retirement fund separate from their main account. This is usually considered an ?extra precaution? just in case the IRA or 401K doesn?t perform as well as expected. Hence, individuals who are saving up cash in banks for retirement should make sure that they either have an IRA or a 401K. In some cases, it is even possible for them to have all three. The main problem with this system is that the funds do not really generate an acceptable rate of income.

Investing for Retirement - Physical Items

Other people choose to invest in physical items such as jewelry, paintings, memorabilia or even collector coins. For example, a painting done by Van Gogh would definitely fetch a handsome price when resold to a museum or a private collector. Depending on the current market, the painting could significantly increase in value, allowing individuals to earn a decent amount from the painting. Typically, investing for retirement on physical items is done not only for the cash opportunity but also for the passion one has for the item.

Of course, those aren?t the only methods of investing for retirement. Ideally, individuals should try to save as much as possible and diversify they investments to ensure financial comfort during their retirement years.

Source: http://retirement.ezinemark.com/top-4-ways-of-investing-for-retirement-7d37832a6f87.html

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