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J.G. Wentworth Blog

Six Investing Options to Save for Retirement

We’ve written before about the importance of planning for one’s retirement and hope all our readers understand how essential it is that they budget for such long-term expenses as healthcare, home and mortgage costs, and taxes on retirement account withdrawals and Social Security benefits. That said, we have yet to tackle perhaps the most crucial step in retirement planning – specifically, how to build one’s nest egg up over time, so that it may be relied upon during these later years.

While J.G. Wentworth cannot offer specific financial advice, we would like to take the time to offer six general tips on the ways one can build one’s savings over time to the point where it can hopefully provide legitimate long-term financial security. Here is just a short list of some popular investing options to save for retirement, starting with:

 

1) Traditional Individual Retirement Accounts (IRAs)

The traditional IRA is a retirement savings plan that offers significant tax advantages. It enables long-term savers to invest their money in a fund that can grow unencumbered by taxes – though it is important to remember that this money is subject to regular tax rates, once one begins to make withdrawals.

 

2) Roth IRAs

The Roth IRA is different in that it allows someone to set aside after-tax income towards their retirement. The benefit of the Roth IRA compared to the traditional IRA is that once this after-tax money is placed in a Roth, it cannot be taxed again.

 

3) 401(k) plans

A 401(k) is a retirement account provided by many companies that enables eligible employees to put aside a portion of their salary towards their retirement. The benefit of the 401(k) is strongest when employers also contribute a certain percentage towards the plan, “matching” the employee’s contribution to a certain extent, and enabling the account to grow even more.

 

4) Pension plans

Though pension plans are less and less common, they still exist in certain sectors such as government work and education. In a pension plan, an employee sets aside part of his or her regular income towards a pool of funds that are then invested on the employee’s behalf and given later to the employee as a benefit upon retirement.

 

5) Mutual funds

A mutual fund is a collection of stocks and bonds that is handpicked and managed by professional investors for a fee. It can be purchased independently, or through an IRA or 401(k).

 

6) Annuities

An annuity is a financial product purchased so that one can receive a stream of payments at a later date. It is generally used to secure a steady cash flow for an individual during his or her retirement years.

 

Please note again that we cannot offer specific financial advice, that the above is just a short list of the many options anyone planning for their retirement can pursue, and that we encourage you to do as much independent research as you can before selecting any retirement strategy.

Whatever your retirement plans, we hope we’ve given you some food for thought, and wish you much luck on your retirement journey. Those currently receiving, or scheduled to receive money from a structured settlement or annuity, and who are looking for a lump sum of cash now instead of later, should call J.G. Wentworth at 877-227-4713 to discuss their options.

Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.