Both IRA’s and 401k’s allow people to save up for their retirement. 401k’s are considered traditional because they are sponsored by the employer so employees choose an amount of their paycheck to have distributed into their retirement fund that is managed by the employer. An IRA or an individual retirement account provides tax advantages by allowing individuals to place money for their retirements into an account with a life insurance group.
Social security is a tax funded program that provides retirement funds to those who are retired but do not have sufficient retirement funds on their own. It is government run and also includes insurance for the unemployed. It is a big issue in today’s society because taxpayers sometimes feel cheated that their hard-earned money is going toward a comfortable retirement for someone else.
It is important that working people think about retirement funds as an investment so that we may save up for later in life when we won’t have the ability to continue working for our compensation. It has been proven that if a person begins saving for retirement when they are 19 rather than when they are 27, they will earn more money because of interest to live on when they retire.
No comments:
Post a Comment