Top Retirement Savings Plans in 2019
Top retirement savings plans in 2019 could be important to you since the Social Security Administration says 9 out of 10 people over the age of 65 receive Social Security. This makes Social Security one of the most important parts of retirement income. But, of course, it may not be enough to cover all your financial expenses during retirement. So, to make sure you do have enough for a comfortable retirement, this list of the top retirement savings plans in 2019 is going to give you a hand in setting yourself up in the best way possible.
Even if it is one of the most standard things to do, top retirement savings plans in 2019 still include pensions. It just is one of the best deals out there, plain and simple. A lot of people have worked long and hard to earn a pension at the end of their working careers and can benefit from the employer’s contributions to the system.
Unfortunately, pensions have been becoming less popular in recent years. One of the reasons for this may be that they are also slowly becoming less and less generous. Here, it may be important to vote in some politicians who will stop the deterioration of pensions in the United States, but even without that, pensions are still quite popular at least in government jobs.
If it was not for the slow deterioration of pensions in the United States, then the only downside of this retirement plan is that it is a defined sum of money – it will not be adjusted based on inflation or anything like that, but always stay the same during your retirement. Nonetheless, pensions still remain one of the top retirement savings plans in 2019, if only because you can get it as a natural side effect of your working life.
2. Defined Contribution Plans.
Another one of the top retirement savings plans in 2019 is defined contribution plans. Part of these defined contribution plans is the popular 401k plan, but there is also a 403b, a 457 plan, and TSP. It is an opt-in system, so you will have to decide if you want to participate in it or not. Not only that, but you will also need to decide on a plan.
Also, there is an option to match contributions to the plan, and for a portion of that, your employer will contribute as well – although the exact amount depends on the employer. If you are unsure what to chose, 401k plans are mostly for people in the private sector. Contributions are tax-deductible, and you can begin receiving payouts starting at age 49 and a half.
Keep in mind, though, that you will get a 10% penalty on your payouts if you retire before the full retirement age. The maximum age to start receiving payouts is 70 and a half, where you have to take a required minimum distribution portion. One of the reasons why this is among the top retirement savings plans in 2019 is that it is also a great deal, and you get out a lot more than any stock investment or hoarding your money in the bank would get you.
401k plans also give you a lot of other tax benefits, and there are some special options that could apply to you, so if you are interested in this one of the top retirement savings plans in 2019, best consult with an expert as well. The only real difference between 401k plans and the 403b or 467 versions is that 403b is for tax-exempt organizations and 457 plans are mostly state and local government versions of it.
3. Nonqualified Deferred Contribution Plans
This one of the top retirement savings plans in 2019 is often referred to as NQDC. This is a great way to go if you want to opt for greater contribution amounts. So, if you have higher incomes that led you to exceed the contribution limits of other retirement savings plans, then an NQDC could be a good way to go.
Another big benefit of this is that if you defer a portion of your income for later taxes will not be applied to it, and once you become entitled to receive the payout it will be tax-free. There are no restrictions on income or contributions with this one, so you can go nuts on it in any way you please. On top of that, an NQDC includes a ton of investment options, which is just another reason why NQDCs is one of the top retirement savings plans in 2019.
These top retirement savings plans in 2019 should give you a ton of options when thinking about your retirement savings. It is always a good idea to think about this early because the sooner you start contributing and setting up these systems, the more you will benefit from them once you reach retirement. Also, if you are ever unsure about what the top retirement savings plans are for your specific case, just talk to an expert on the matter – they will be happy to help.