Best Employee Retirement Plans

Posted by struggle on September 19th, 2022

                Best Employee Retirement Plans

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Planning for retirement can be scary. There’s so much information out there that it’s tough to know exactly what the best plan is. So we did the research to help you figure things out, finding defined contribution 401(k) plans to be the best option for most people. They’re easy to manage, they let you build wealth with pre-tax dollars, and they often can be bolstered by matching employer contributions.  

The Best Employee Retirement Plan for Most

The most common 401(k) retirement plan—the defined contribution 401(k)—is also the best for a wide array of people. You can set it up so that a portion of each paycheck is peeled off to fund it, so you can schedule your path to retirement with confidence.

And, it’s also the plan that employers most commonly offer contribution matching for. That means you might double your retirement fund’s influx with every pay period. Check with your organization to see if this is available to you.

The Best Employee Retirement Plan Options to Consider:

1. Defined contribution 401(k) – Best for most
2. Individual retirement account – Best for tax advantages
3. One-participant 401(k) – Best for the single employee business owner
4. Cash value life insurance – Best insurance for retirement
5. Federal thrift savings plan – Best for government and uniformed Employees 

When It Makes Sense to Invest Into Employee Retirement Plans

If you want to reduce stress from thinking about how much money you’ll have in your golden years, investing into a retirement plan makes the most sense.

An employee retirement plan helps you save with little to no effort. You get tax breaks and your money earns a lot more interest than when it’s sitting in a primitive bank account. 

If you have money set aside and you’re not sure what to do with it, investing it into an individual retirement account (IRA) is a fantastic way to grow your wealth with non-taxable income contributions. We’ll explain more when we talk in detail about each plan. 

But, essentially, you don’t pay taxes on what you’re saving. It reduces your overall income, lowering your yearly taxes, too. 

Paying into an employee retirement plan provides excellent social security protection, and you can decide exactly what your final number should be for how you want to live after retirement. 

Think about it. You will know exactly what your predetermined monthly payout will be and sleep better because you’re saving for the future on autopilot. 

There are also specific types of software like Empower that let you consolidate all your investments. This lets you see everything in one simple dashboard if you want to keep a close eye on how things are going. 

An investment into a tool like this is a good Idea if you like the ability to analyze how your money is doing. Some tools are free and some cost you a little bit. Either way, it’s a win-win if you want a more hands-on approach with some retirement plans we’ll talk about. 

But what plan will work best for you? Let’s dig in.