According to the United States Department of Labor, creating and sticking to a plan to save money is the most important step in preparing for retirement. Successful retirement requires planning, commitment and stable finances.Continue Reading
According to the United States Department of Labor, retirees need at least 70 percent of their pre-retirement income to maintain their standard of living after they stop working. Putting a set amount of money into a savings account each month is an effective way to start saving for retirement. The Department of Labor strongly advises workers to leave their retirement savings untouched until they retire; withdrawing the money early can cause a loss of interest or tax benefits.
Money can be put into an Individual Retirement Account, or IRA, which can provide an easy way to save for retirement. If an employer has a retirement savings plan, such as a 401(k) plan, an employee may want to sign up and contribute to it as much as possible. Compound interest and tax deferrals can cause money to accumulate over time. Each plan is different, so a potential retiree may ask his employer for details before signing up. An employee may also ask about an employer's pension plan. A retiree also has access to Social Security benefits, which are on average 40 percent of what was he earned before retiring.Learn more about Financial Planning
As long as a person is separated from his job, moving the money in a 401(k) plan into an individual retirement account requires little more than choosing the proper fund for the individual's needs, according to Good Financial Cents. Investors opting to rollover a 401(k) plan into a traditional or Roth IRA can take a distribution or leave the account where it is, depending on their needs and retirement goals.Full Answer >
Employees who leave federal service can withdraw money from their Thrift Savings Plan or roll over the funds to an IRA or an employee-sponsored retirement plan once the new account is active. Employees may have to pay taxes and penalties on withdrawals and transfers, depending on their age and the types of their investments, according to TSP.gov.Full Answer >
The rules for withdrawing money from a 403(b) tax-deferred retirement plan vary by plan, but some allow for a hardship withdrawal or loans, according to the Internal Revenue Service. Plans may also allow withdrawals when the employee reaches age 59 1/2, leaves the employer, develops a disability or dies.Full Answer >
A 401(k) plan is a type of retirement plan that offers the advantage of being funded with pretax money; this means that the contributions made by employees are taken from their paychecks before taxes are deducted. The effect of this practice reduces the employee's overall taxable income, according to CNN Money.Full Answer >