retirement planning

Debt is a part of almost every person's life. There may be times when you look at your paycheck and wonder if the money you are putting aside for your retirement outweighs the cost of your debt. You may think it is best to stop contributing towards your retirement and put that money to paying off your debt.

When planning for retirement, investment advisors recommend the stability and the savings that 401(k) or 403(b) contribution plans offer.

What Should You Do? Save Your Retirement or Pay Off Your Student Loans

At What Age Should You Start Contributing to Your 401(k)?

If your employer is a retirement plan sponsor, you’ve probably received information about your retirement plan, including descriptions of all the investment options available to you. Why do retirement plans offer different options?

Many people have different options to save for retirement. Virtually anyone can open an individual retirement account (IRA) and start saving. Many other people have access to a 401(k) plan through their employers. So which option is best for you?

If your employer is a retirement plan sponsor that offers access to a 401(k) plan, you should be taking advantage of it to save for retirement. 401(k)s offer significant advantages to workers, such as the ability to save on a tax-deferred basis and often, employer savings matches.

Many people who are saving for retirement haven’t taken the time to figure out how much they may need when they retire. Financial planners who do pension consulting point out that saving without a goal could leave you in trouble when you reach retirement. After all, how do you know if you’re saving enough if you don’t know how much you may need?

Sometimes people are surprised to find out they owe taxes on investments in their “tax-free” retirement accounts. It’s not common, but pension consultants note that it can happen.

Retirement is a whole new phase of life. You’ll experience many new things, and you’ll leave other things behind. One thing that won’t disappear, however, are taxes. If you’ve followed the advice of retirement plan consultants, you’re probably saving in tax-advantaged retirement accounts, like 401(k)s or IRAs.