Whether you are a U.S naturally-born citizen or you have resided and stayed in the U.S for years now, you must know that the government offers tons of retirement benefits for anyone working in the country.
You can easily apply for a retirement plan depending on how much you are earning per month and per year, and also your financial status. There is always a retirement plan for everybody, and it will only depend on different factors.
If you want to know more about retirement benefits in the U.S, here are ten of the best retirement benefits that you should have.
This retirement plan is available through employers. Below 50 years old, you are allowed to contribute up to $19,500. At 50 and beyond, you can place up to $26,000 in your account. This type of contribution grows tax-free until they are claimed at retirement.
One-participant 401(k) plan or solo 401(k) is for individually owned business people without employees and the self-employed. You are allowed to contribute up to $57,000 in 2020.
403(b) is almost the same as 401(k), but it is offered in public school, non-profit organizations, charities, and others. The contributions grow tax-free until withdrawn as well.
This plan also has similarities with 401(k), but only for government or state employees. The benefits can be claimed at 59 ½ years without penalty, but it’s harder to take out emergency funds from 457(b).
Individual Retirement Account or IRA is for people with earned income. In 2020, the contribution limit to an IRA is up to $6,000 for people below 50 and up to $7,000 for 50 and above.
The amount contributed to a Roth IRA cannot be more than your earned income. The contributions are taxed compared to IRA, both they still grow tax-free in your account. In Roth IRA, contributions can be made as long as you have income.
This type of IRA has the same requirements and limits as IRA, but they differ in the type of contributions. In a self-directed IRA, you are allowed to place cryptocurrencies, real estate, etc.
For small business owners and the self-employed, the Simplified Employee Pension IRA allows you to contribute 25% of your compensation or $57,000, whichever is less. The contributions are only taxed upon withdrawal.
Pensions are given by employers to their workers monthly at retirement. Formally known as Defined Benefit (DB) plans, pensions rely on your years of service. If you retire earlier than your retirement age, you can expect to get a lesser benefit than you would have expected.
Health savings account or HSArequires you to have high-deductible health insurance. Your contribution grows tax-free and can be withdrawn to cover medical expenses.
Again, each retirement benefits and plans will depend on how much you are earning at work and some other factors, such as your financial status. To seek more advice when it comes to retirement plans, be sure to talk to a financial and insurance advisor. This way, you will be guided on which plan is suitable for you.