Because most real estate agents are self-employed, deciding on a retirement plan is often more complex than it would be if you worked for a company. You have to take the initiative, determine the best way to ensure your long-term financial stability and make the most of the assets you have today.
As you look at plans, consider how much money you intend to save every year. For the following accounts, your contributions will be tax-deductible, and the money you save will be tax-deferred until retirement time.
Here are three recommended retirement plans often used by self- employed individuals:
Banks, mutual fund companies and brokerage firms all sell SIMPLE IRAS and SEP-IRAs, which are easy to set up, can be inexpensive and are tax-deductible.
Only certain financial firms offer individual 401(k)s.
Other plan options to explore include a defined benefit plan (like the Keogh plan) or an annuity. While a defined benefit plan allows for large contributions, there is a minimum requirement for how much is put in every year. Annuities do not have maximums for contributions and include the option to sell annuity payments if you need money sooner than expected.
Every plan you look at will have its own features and restrictions. Regardless of which you choose, the key step is getting started right away. The longer your money can remain in savings, growing with tax benefits, the more security you will have in your financial future.
Alanna Ritchie has spent years studying, writing and learning to love the intricacies of the English language. Today, she works as a content writer for Annuity.org, where her primary focus is personal finance.