Tuesday, March 25, 2008

Which Retirement Plans Will Fit Your Goals?

It used to be many years ago that retirement plans meant getting the pension your company gave you along with your social security payments from the government and any savings you have on your own, and living comfortably in a downsized apartment throughout your golden years. For some this type of financial plan is sufficient for their needs; they may have a well-funded pension from a corporation that will provide well for them. But for most, you will need to make your own retirement plans when it comes to your financial health in order keep yourself afloat financially, and to make those dreams you've had for retirement a reality. It's of course easy to get overwhelmed with the many options that are available to you when it comes to financial retirement plans, and you should speak to a financial advisor or counselor when making these decisions if you still have questions, but we can give you some general information that will explain some of the details a bit more clearly.
Defined Benefit Retirement Plans
Defined benefit retirement plans as provided by employers guarantee a certain payout upon your retirement, which depends on the retiree's previous salary and the number of years he or she has been contributing to this plan. These may be referred to as funded meaning that there are contributions from one's employer and sometimes from the plan members. In unfunded retirement plans, there are no funds set aside but the benefits are paid out of current taxes and social security contributions.

No one can tell you what the best choice is for you; even your financial advisor can only give you all the relevant information on how the different retirement plans affect your money and its potential growth. It's up to you to decide which option you're more comfortable with. Some people want to make their own decisions about where their money is invested and some would rather leave the decisions to others; some would prefer to pay the taxes on their contributions now while others would prefer to wait until the funds are disbursed. You need to educate yourself thoroughly and then make the decision that works best for you.
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Article Source: http://EzineArticles.com/?expert=G._White
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