IRA And 401k Retirement Plans/ Best Investments: Small Business Owners, Self Employed, Military, Army, Teachers And Nurses

Children often are told they can be anything they want to be when they grow up.

Whether they become teachers, nurses or Army officials, a myriad of retirement plans are available to make certain they can grow old with comfort and luxury, unburdened by financial worries.

From small-business owners to military personnel, savvy employees will not accept a job unless it promises some sort of retirement pension or options for investments. IRAs, 401Ks, 403Bs and pensions are among the retirement plans currently available to employees in the United States. Each of these retirement plans is tax-advantaged, often allowing participants to defer taxes until a later date.

An individual retirement account, or IRA, allows employees to choose their desired investment, as long as they meet the company's minimum and the government's maximum investment guidelines. There are three types of IRAs available: traditional, Roth and non-deductible.

In a traditional IRA, employees who make a low or moderate income invest money from their taxable income. Most often, their employer's do not have company-wide retirement plans. This retirement option allows participants to withdraw their money after they are 59 1/2 years old.

Though Roth IRAs are not tax-deferred, the earnings are never taxed. With non-deductible IRAs, participants are unable to deduct contributions. Generally, early withdrawals from any IRA will result in a penalty fee.

Private-sector employees of larger companies or corporations usually have the option to invest in 401K plans. Though there are many different ways to be qualified for a 401K, most allow a tax-deferrable sum of money to be invested. This money can be withdrawn once the investor becomes 59 1/2 years old.

Oftentimes teachers and nurses will receive 403B retirement plans from their employer. Like 401Ks, 403Bs are based on pre-approved pay deductions. Because 403B plans are tax-deferrable, they can lower the employee's overall tax burden.

Those who fall under self employment, such as small business owners, are non-qualified for 401K and 403B plans. However, they have other options, such as Keogh retirement plans. These plans are similar to IRAs and can be used in conjunction with one or more other retirement plans. This tax-deferrable program allows investment autonomy separate from any government or employer timelines.

Since many people retire from the military earlier than other careers, United States military pensions are unique to other retirement plans. To be eligible for military pensions, a person can retire as young as 37 years old. Military retirement plans pay a percentage of military pay after 20 years of service. After 40 years, retirees are qualified to receive 100 percent of their basic pay.

There are countless retirement plans available for practically every walk of life, ensuring employees are able to save for their futures and grow old in comfort.



Sources:
"Evaluating your Retirement Options. " 27 Jan. 2006. U.S. Securities and Exchange Commission. 21 Dec. 2006.
"The Military Retirement System." 2006. U.S. Military. 21 Dec. 2006.
"Small Business Retirement Plans." 2006. Smart Money. 21 Dec. 2006.
"Understanding Retirement Options." 2002. Essortment. 21 Dec. 2006.