Retirement Retirement seems to be one of the most often overlooked areas of
people’s future plan. Simply because it seems so far away, it is an area that is
subject to procrastination. People are expected to live longer now than ever
before, this is another reason why young adults and teenagers are not worried
about saving for their retirement. The baby boom generation, the seventy seven
million people born between 1943 and 1960, face an entirely different retirement
plan. As they began to retire, people are starting to think that there will be
no money left and this will turn into a crisis. What will happen when
seventy-seven million baby boomers begin to want the money they paid in… but it
is not there? Retirement provisions such as Social Security, IRA’s, and 401k’s
are there to help when you are deciding how to save money. Social Security
started a long time ago, in the 1930’s, when Franklin D. Roosevelt was
president. He was elected president in November 1932. By March there were over
thirteen million people that were unemployed, and almost every bank was closed.
Franklin D. Roosevelt proposed a sweeping program to being recovery to business
and to agriculture and relief to those who were in fear of losing their farms
and homes to being unemployed.
In 1935, recovery was slowing arriving, but more
And more people were turning against Roosevelt’s New Deal program.
This led Roosevelt to a new program of reform, which we know today as social
security. It stated heavier taxes on the wealthy, new way of controlling banks
and public utilities, and a huge work relief program for those people who were
unemployed. Social Security has been around for so long, but now people under
the age of sixty-five think it will go bankrupt before they retire, according to
a new CNN/TIME poll, and most of them do not think they will be able to save
enough on their own. Only thirty-one percent say that the system is currently in
a crisis; majority just feels that there are problems but not a crisis. The way
you feel about Social Security is based totally on what age you are. People over
fifty seem to think the system is fair while others feel it is not. In the
Industrial Age, a Defined Benefit pension plan meant that the company guaranteed
you, the worker, and a defined amount of money for as long as you lived. This
made people feel secure because these plans assured a steady income. IRA’s,
Individual Retirement Accounts, are a vital part of retiring plans. There are
two different types of IRA’s, which include Roth and Traditional IRA’s. Roth
IRA’s are said to give Americans another way to save on taxes. A Roth Ira can be
withdrawn tax-free, as long as the account has been open at least five years and
you are age fifty-nine and a half when you begin withdrawing the proceeds. The
contributions can be up to two thousand dollars per person or four thousand per
couple. The beauty of a Roth IRA is its simplicity. You can contribute to a Roth
IRA even if you have an employer-sponsored retirement plan. You can contribute
to a Roth IRA even if you have an employer-sponsored retirement plan. You can
make contributions to a Roth IRA at any age as long as you are earning income.
Your contributions however, can’t exceed your income. Someone who contributes
even a little as a teenager can end up with quite a bit of money later on. With
a Roth IRA your beneficiaries will not have to pay income tax on it. A
Traditional IRA is for taxpayers that are under the age of seventy and a half,
who are still working. Some people prefer the traditional IRA because they can
get an immediate tax deduction equal to the contribution they put in. The money
in a Traditional IRA grows tax-deferred. You have to pay a tax on all your
earnings. Distributions of a Traditional IRA are required at the age of seventy
and a half or you have to face penalties. There are also penalties on
withdrawals before the age of fifty-nine and a half such a ten percent tax
unless the money is used for a first home or for college.
