I am young, but I was just wondering, is there anything I can do besides invest in my 401K or rely on social security that can help prepare me for my future. Another thing, is there a way I can retire early, or ways to accumulate wealth without relying totally on a 9-5 job?
I always advise that people do more than just what work has to offer. There are several types of investments out there such as an IRA or mutual fund. Both have advantages. Find yourself a good financial advisor to help you with that. Interview them. If they just want to sell you something they won't get too involved in what type of investment makes you comfortable. Some people don't want a high risk investment while others do. If you don't feel they are in it for you move on and don't feel bad about wasting their time. Remember ask them lots of questions too so you understand what you are putting your money into.
The first and currently the best retirement savings plan (for anyone about 40 and under right now) is a Roth IRA. It has the best tax benefits (crossing my fingers rules don't one day change about this) and therefore will be worth the most when you use it. (You pay taxes NOW and they won't tax you when you withdraw the money in however many years.) I actually rolled my entire 401K from work into my Roth after 5 years because my 401K was so small and compounding so slowly, it made no sense to keep it. My employer didn't "match" contributions or anything, just took out a small amount of each paycheck to put in, so it was pretty worthless to me, esp. since I'm no longer working. I started my Roth IRA at 20. I'm 32. It is currently my biggest asset. The only rule is that you can only invest, per year, as much as you make in income, up to $5500. So if you do not have any (taxable) income, you cannot open one or contribute to one. My husband is self-employed right now, and I'm on his payroll. As a co-owner, I make exactly enough to max out my IRA each year, even though I don't technically go into the office and clock in or anything.
I am no expert, but I have set up a couple of savings accounts which I pay a little into each month, these are for my retirement. I will be moving them every couple of years to try and gain better interest rates, but I think this is a good way to plan for the future.
The Employee Retirement Income Security Act (ERISA) states that employees can benefit from one of these two pension plans for their retirement: defined benefit plan or the defined contribution plan. With a defined benefit plan you are guaranteed to receive a monthly amount by your retirement day, while the defined contribution plan, doesn't guarantee an amount but set aside a banking account to save money for you retirement. With your savings, you can invest in safe financial instruments, or risk with those from the volatile market such as stocks and mutual funds. You can also try retirement plans such as the 401-K or HR-10 (Keogh Retirement Plan) but I believe that the best way to start planning for retirement is approaching to a financial adviser to learn more about the available options and what are the best to take out in your particular case. . The first is made of the employee's contributions put into a personal banking account, without promising a specific amount of money as retirement benefit, while the latter guarantees a monthly amount by the employee's retirement date.
