Robert Nico Martinelli Comparing the Top Retirement Plans

In some cases, people are not much aware of or have no choices about retirement plans. They simply take what their employer offers, sometimes 401(k) and some other times a 403(b). There are also defined-benefit plans. IRAs, or something else. Many people do not know that you too can supplement with an IRA, which is open for anyone regardless of employment. In this article, we will try to compare a few retirement plans in an effort to guide people to choose the best.

As Robert Nico Martinelli suggests,different retirement plans come with different benefits.  

  • Portability – The investors can take the retirement plans of 401(k) and 403(b) to another employer during a job change or even roll it on to IRA at any point. Conventional pensions plans may be specified with an employer, so you will lose them when you change jobs.
  • Better returns – 401(k) and 403(b) offer much higher returns when compared to the traditional retirement plans. Funds in it are usually invested in assets with the potential for a higher return like stocks and bonds etc.
  • Flexibility – As these plans are portable, you can start with a defined-contribution plan which offers gives you the power to continue with the plans by not being concerned about losing it when you leave an employer.
  • Not relying on the success of employer business – Receiving a pension is a right of the employee and a necessity too, which should not be dependent on how the employer performs in their business. The defined-contribution pensions plans do not have this risk as those are portable and flexible.
  • Never outlive the income On the other hand, a major benefit of the pension plan is that it pays you until your death after the time of retirement. This means you will never outlive the income, which is one risk you need to consider with the defined-contribution plans like 401(k) and 403(b) etc.
  • You do not have to manage – You do not have to involve in managing your pension plans. You need not worry about investing money, what returns you will be making, or whether it is invested property. The employer and the fund managers who handle balanced pension funds will take care of everything.

So, one of the important considerations to make while doing pension planning is to consider between the defined-contribution and defined-benefit plans.

Retirement plans for the small business owners and self-employed professionals

If you are in the above category, you may have other options to plan your retirement. The major choices to make here are the solo 401(k), SEP-IRA, SIMPLE IRA, etc. There are many benefits to these options.

  • Plans like solo 401(k), SEP-IRA, etc., will give the participants the option for higher contribution limits.
  • Such plans will also let you contribute to the employee limit and add in extra profits as an employer contribution.
  • Unlike other conventional plans, these retirement plans have reduced regulatory complications and are easy to run.
  • Such plans can also be invested in high-return assets like stocks.

As Robert Nico Martinelli points out, there are plenty of options when it comes to choosing retirement plans, which you may diligently assess based on your needs and choose the best.

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By Michael Caine

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