Consider retirement options to find the best pension plan

Nov 5, 2012, 8:33 a.m.
Keep in mind that the right retirement plan for someone who is 25 may be the wrong option for someone 55.

Retirement options are plentiful when people are young, but they tend to diminish as individuals put more "miles" on themselves. The right retirement plan for someone who is 25 may be the wrong option for someone 55. With so many people now committed to working after retirement, some choices are better than others.

The flexibility and tax deductibility (and tax deferral) of IRAs makes them popular retirement options for young and old alike. If you plan on working after retirement, an IRA may prove to be an even more attractive and flexible option.

If you're still working and have the option of contributing (and tax-deferring some salary) to a 401(k), the 401(k) may be the right choice if your employer offers matching contributions. Should your company match dollar-for-dollar up to one, three or five percent of your salary, you'll maximize your retirement options significantly.

When you have a 401(k) option, if possible, use both choices (including an IRA), to get the most benefit. At the same time, examine the investment choices and administrative fees that apply to the 401(k) plan. Whether or not you view working after retirement as your favorite choice, taking advantage of an employer-matched 401(k), while you're still employed, is often the right pension selection.

Choosing the right retirement options often depends on your working tax bracket as compared to your projected tax bracket after you retire from professional life. If you're starting your retirement program as a more mature person, consider safety and security of your investments as strongly as you seek earnings and growth. How do you feel about these pension options?

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