Finding Retirement Savings
The term retirement is used to refer to a point in time after a person has stopped working. Retirement is the complete withdrawal from one’s former position or job or from one’s active working life. A person may also partially retire by reducing regular work hours or work schedule. Retirement for many is a time to take care of oneself. It is a period of reflection, of looking at one’s accomplishments, strengths and weaknesses, and to evaluate the quality of life achieved so far. For many it marks the end of one phase of life and the commencement of another.
Most of us talk about retirement when we are aged 65 and above. However, for an increasing number of Americans, retirement is a time far removed from this critical milestone. Many people, aged between 35 and 45 years are now actively saving for retirement as a part of their overall personal financial planning. A full third of all American households have some sort of retirement savings account. This accounts typically include money that has been invested and has grown over the years.
An individual retirement account is an account set up by the employer to be used for retirement payments. Typically, this will be invested on behalf of the account holder, although contributions made by the employee may be included. Typically, the account will be managed by the employee and used to build a pension during their working years and then passed down to the surviving members when they reach their expected retirement age.
In contrast, social security retirement plans are a type of agreement between individuals and the government. Social Security is a joint plan of financing for the benefit of the United States government and the employees of the Department of Defense. Both United States citizens and eligible non-residents are eligible for retirement benefits, as long as they meet the defined criteria. In general, the social security retirement age is 62 for U.S. citizens, but the waiting period can vary from state to state.
In addition, there are many 401(k) plans that are available to both employees and employers. Typically, a company or employee can designate up to one-fifth of their salary as the amount of retirement savings to be used as an investment. The employee may contribute a certain percentage of their paycheck, or some money from their bonus or other wage increase each year. Depending on the terms of the plan, the money may match up with some other funds held by the company. Generally, the company will invest the money for the retirement of the employee.
There are many different options available to both employers and employees for retirement savings. These accounts offer the flexibility and security that many older Americans need in order to secure the future of their family. The rising cost of health care, combined with the rising number of older adults, makes it necessary for everyone to consider the options available to them. Many of the new options being offered to Americans to help them save for their golden years so that they can enjoy their later years. By taking advantage of the options available, many seniors may find that this helps to ensure their financial security and peace of mind.