The amount of money you receive from the Government will depend on the number of years you work and your salary.
With the 401 (k) you will be able to decide how much money you want to save for your retirement and your employer can help you by giving you a series of incentives to increase your savings, while the pension offered by the government is a financial aid so that you can pay your expenses during your retirement. Because of this, 401 (k) may provide you with greater financial benefits than the government pension.
If the company you work for offers you a 401 (k) retirement plan, you will make monthly contributions that they will be exempt from paying federal taxes, until the money is withdrawn. Since you are the one who chooses the amount of money you will contribute to the plan while you are working, you are the one who decides how much money you will save for your retirement and when to retire.
Also, most companies that offer 401 (k) contribute a sum of money to the worker’s plan. For example, they can contribute 50 cents for every dollar the employee contributes to the plan.
Conversely, The amount of money you receive from the government when you retire will depend on the years you worked and your earnings. Since to obtain the government pension you will have to work for at least 10 years to accumulate the 40 credits required by the Social Security Administration and be 67 years old in order to receive the full benefits. Also, the higher your lifetime earnings, the higher the amount of your Social Security benefits.
Even the Social Security Administration advises against depending solely on Social Security benefits when you retire, because the benefits are a complement. Also, the amount of money you receive from Social Security may not fully cover your expenses.
“Experts advise that You will need to receive the equivalent of 80 percent of your current income each month to continue your current quality of life after retirement. In other words, let’s say you earn $ 1,000 a month, you should save enough to receive $ 800 a month after your retirement, “explains the page of the United States Government.
Another way to be financially stable during retirement and save is by opening an IRA. IRA accounts allow you to save a certain amount of money and earn interest for later use during retirement. Some IRAs that you can consider are:
IRA accounts offered by the cooperative Connexus they have from 1.50% to 3.50%. For example, with the Supreme Account program you could obtain an IRA account with an interest rate of 1.50% APY. The Connexus IRA account does not require a minimum deposit to open it.
The IRA accounts you offer TD Bank They do not have monthly maintenance fees and have an interest of 0.5% APY. You can choose between traditional IRAs and ROTH IRAs, but to open these accounts and start saving you need to make an initial deposit of $ 300.
It may interest you: Which is better a 401 (k) or an IRA?
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