Sunday, May 22, 2011

Retirement Investment Options and Get Your Money's Worth

There are many retirement investment options that you can choose in preparing for your retirement. Whether you choose to invest in stocks, bonds, or cash, there are certain advantages and disadvantages that go with each, depending on the current status of the economy. Read more to know about the different investment options that you can avail.

Knowing how to invest your money will give you an advantage when you choose and plan your investment options. Investing in stocks means you are buying a share from a business or corporation. It is a good way to beat inflation, but for small investors, there is a risk for loss if that business fails. Investing in mutual funds is another way to invest in stocks or bonds. Professional handlers or managers deduct the annual fees from the assets of the investors. ETF, or exchange-traded fund, on the other hand, is another way to pool money for investors. Opposite to a mutual fund, ETFs are processed and continually get traded throughout the day. Investing in bonds means that you are lending your assets to any entity like a small business or company, or even the government. The values for bond investments remain strong and stable, despite the changing status in the stock market.

Other retirement investment options include the traditional IRA plans. These work just like your company's 401(k) plans, but all contributions made are tax free, and all withdrawals are taxable depending on your income tax rates. The Roth IRA on the other hand, is the exact opposite of the traditional IRA. All contributions made are taxed and withdrawals are tax free. This is the most recommended plan especially for those who are planning retirement. Saving up for your retirement will not be affected by the future tax rates since all withdrawals are absolutely tax free. The SEP IRA is another recommended plan for those who are self employed and want to secure their financial stability in the future.

Other than the mentioned retirement investment options, some may choose to put their money into a more stable and concrete investment and turn it into income for retirement. Investing in gold is a smart decision because it is a great way of surviving financial crises. The value of gold is not affected by the inflation rates of the economy. Investing in gold takes a lot of time and patience, and costs a lot of money. In the long run, you will see the results in the growth of your investment. The longer you invest in gold, the higher chances you will have in securing a stable future for you and your loved ones. You may choose to keep your gold in a safe at your home, or in the safety deposit box of your trusted bank. And when the time comes that you need to convert your gold into cash, you can go to your bank or to any credited gold buyer at your convenience.

Other than gold, you may also choose to invest in silver. Although its value is less expensive than gold, the growth of your investment will depend entirely on how well you plan your investment.

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