Planning
Your Financial Future In The US
It's never
too early to start planning for your retirement. Unfortunately, too
many Americans do not save enough to secure their financial futures.
While the U.S. government does provide Social
Security benefits to retirees (at least 10 years of employment
required) after the age of 65, often these payments are not enough to
pay sufficient living expenses. As a result, many older Americans ("senior
citizens") are poor.
!
Financial experts suggest you contribute at least 10-15% of your earnings
into retirement savings.
In order
to provide for retirement, many American workers contribute to an employee
pension plan. The employer takes a percentage of one's weekly or monthly
pay into the plan. Some of these plans are tax-deferred -
that is, they use pre-tax dollars and do not require taxes to be paid
until the money is withdrawn upon retirement. Examples of employee pension
plans include:
To further
supplement their retirement benefits, Americans also invest in:
- stocks
and bonds issued by public companies
- government
bonds
- mutual
funds (groups of company stocks put together by investment advisors)
- index
funds - funds based on the performance of an index, like the S&P
500
If you
are not familiar with investing, it may help to hire a financial planner,
who can look at your investment goals and timetable and offer helpful
suggestions about where to put your money,
Types
of Financial Planners:
- fee-only
advisors - flat rate, no commission for securities sales
- commission-based
advisors
To find
a licensed financial planner in your area, contact the Financial
Planning Association.
Types
of Mutual Funds:
- no-load
funds - the broker gets no commission
- load
funds - commission-based funds
Stock brokers
are professionals whom you can hire to make stock trades and help design
a stock portfolio for you. As with other professionals, it is important
to choose your broker wisely.
Useful
Links:
Investorwords.com
- a glossary of investment terms.
IRS 1-800-829-3676
"Retirement Planning for the Self-Employed"
Amazon.com.
- the online discount book retailer offers a wide selection of financial
planning books
