Pensions - What Should I Do ?

dc1621 asked:


I received social security and a railroad pension.

Katherine

Bernie Dozier asked:


There are as many reasons to start planning for retirement now as you want. If you are still in your early thirties and you want to start planning for retirement now, then there is actually nothing to stop you from doing this. You can have extensive plans of buying your own home, building your nest egg or even starting your own business. These things are actually just the tip of the iceberg when you start planning for retirement now. There are other more important things than leisure to plan for when it is time to retire.

The age of 65 is the retirement age stated by the government. There are some individuals who do retire earlier than 65. You will need to make amendments for your pension and your health care benefits if you do retire before the allotted age. It is best to make known your intentions of retiring early with the government branch handling pensions to be clear and for you to be aware of what to expect. These are just some of the things that you need to include in your plans as you start planning for retirement now.

Pension And Health Benefits

Your pension is something that you need to take care of as you are contributing to it. As you start planning for retirement now you need to be clear regarding your pension whether you are contributing to it accordingly so that there will be little problems of redeeming it as time comes. The same goes to all other contributions you need to make for your health card. It is a fact that our health will deteriorate as we reach around retirement age. Having something to help us financially when it comes to the unhealthy times can be a godsend.

Savings And Investments

Just because you have a pension to look forward to does not necessarily mean that you do not have to save for your retirement. As you start planning for retirement now, you may have many plans and activities in mind that will need more finances than your pension can provide. Saving whatever extra cash you may have is a good idea for up and coming rainy days. Savings can be easily eaten up by day to day expenses so it is best to be frugal when spending now while you still have some income.

Being frugal does not mean to be miserly with your finances, though. We have many needs which can only be addressed by buying cars, gym equipment and other luxuries which may seem expensive but will soon start to look better as you use them. The benefits of cars and gym equipment, when used accordingly can be seen in your health and demeanor. Investing in a house and small businesses can also be a good idea to build your nest egg as you start planning for retirement now.

Plotting one’s retirement plans is a way of ensuring you are well taken care of when you do retire. It is best to start planning for retirement now when you are still capable of doing so.



Antonio

skahhh asked:


Who was President at that time? How did they get away with this double taxation? The money had already been taxed once. right? How were they allowed to tax the money again?

Hayden

Gordon Hall asked:


The Simplified Employee Pension (SEP) retirement plan is often touted by banks as a simple and effective way for self employed individuals and small business owners to save for retirement.  However, you should weigh the pros and cons of the SEP retirement plan carefully before deciding to open one.  

The point that’s usually considered the biggest perk of having a SEP retirement plan is the fact that you can reduce your taxable income even at the last minute.  For example, even if you open up an SEP plan in 2008, you can make a contribution for 2007.  You can open up an SEP plan at any point up until the tax income return.  

Another perk of the SEP retirement plan is that contributions do not have to be made every year and are made by the employer only.  Furthermore, employees of employers that have high turnover rates are not eligible for SEP contributions.  There are also no employer filing requirements.  

However, there is also a downside to having an SEP retirement plan.  SEP plans are required to cover part-time employees who have worked three out of the five past years making $500 annually.  If you contribute funds on your behalf you will have to do it for every employee that qualifies.   

Another problem with the SEP retirement plan is its tax structure.  The contributions are tax-deductible but the earnings and withdrawals are taxed.  This means more paperwork for you in order to report everything to the IRS.  Furthermore, you will ultimately be paying more in taxes since tax rates will probably be higher and you will most likely be in a higher tax bracket at retirement.  

Most importantly, when it comes to delivering returns, SEP plans are lacking.  The most lucrative investment plan out there is the self-directed Roth IRA.  Self directed Roth IRAs can be managed by a company that is set up to help people self direct their accounts.  These companies can guarantee to double or even triple your returns by investing your assets in real estate.  

The SEP retirement plan, like a traditional IRA or 401k, is limited when it comes to investment options.  On the other hand, self directed IRAs are much more flexible and offer a much wider range of investment options.  

The best investment venue to date is real estate because it is lucrative, stable, and low-risk.  That is because its value tends to increase over time, it is insured against common forms of loss like natural disaster, and there is always a demand for homes and land as long as prices are affordable. 

In order to capitalize on that demand, there are companies out there that buy up old homes in neglected urban areas, renovate them, and resell them to working-class families.  Since they charge affordable prices, the homes are bought quickly and there is even a waiting list of qualified buyers.  The whole process takes 4-6 weeks so your assets can be invested and re-invested in the same way.  

Do yourself a favor and weigh your options carefully.  If you want to maximize your returns, pay less in taxes, and have more control of your account, you should roll over to a self directed Roth IRA.  An SEP retirement plan may seem like an easy option initially but when you look closer, there are many downsides to having one.  Instead, focus on self directing a Roth IRA so you can save money and increase your returns substantially.



Layla