Have You Heard Of A Supplemental Retirement Plan-Get Yours Today

March 23, 2009 by  
Filed under Retirement

A great way to increase your financial status for your retirement is with the help of a supplemental retirement plan. The best part is, you can begin the plan whenever you want, just ask your employer to have the necessary arrangements put in place and you can begin supplementing your future income.

How does this supplemental retirement plan work? The plan is a very simple one where a proportion of your earnings is set aside into your account before it has been taxed. The funds in your retirement account will not be taxed until they are withdrawn allowing your to accrue more savings and therefore gaining more interest on them. The tax on the investment is also postponed until the cash is withdrawn allowing further savings to accrue.

With a supplemental retirement plan there is a limit that you can save per year. At the moment the limit stands at around $15,000 per year with slight variations each year. Each year’s savings will be equalled by your employer in most standard plans increasing your retirement fund significantly. Many workplaces incorporate the 401K retirement plan which is a similar savings plan. At any point you can access the funds as a loan in an emergency but making sure to replace the loan at your earliest convenience.

You can also enhance your savings by investing your cash, this may include stocks and shares, bonds and real estate, however there would be a charge for the investment, so this would need to be taken into consideration within your overall plan.

Before investing your hard earned cash, it is advisable to seek professional advise from a financial advisor to help you decide what would be the most prudent and beneficial move for your finances. Some investments and savings plans a good for some but not others depending on your situation. Some informed advice could help your savings grow outwards and upwards.

It is worth noting that nothing is set in stone with regards to your supplemental retirement plan. At any point, you may change the settings for your monthly payments. If you feel that it is set too high you may lower and vice versa. A change in plans only requires around a one month waiting period. Simply request the changes to be set in motion by your human resources department.

You can never have too many savings and with most supplement retirement plans you also have the option to access your cash in an emergency. If you can afford to put a little bit extra aside for your retirement years you will never look back.