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9 Tips to Help You Plan Your Retirement

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Making financial decisions can be confusing and overwhelming, to the point that you do nothing to prepare for your financial future. But this Financial Literacy Month, we’re helping you understand finance basics so you can make money decisions with confidence.

Step one was understanding your credit.

Step two is planning and preparing for your retirement. Starting early will help you establish a sound financial future down the road. These tools and tips will help you get started.

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It’s never too late to start saving for retirement. These strategies for late starters can help.

IRAs, 401(k)s and More: Making Sense of the Alphabet Soup of Retirement Accounts

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From the FDIC

Consumers and small business owners are fortunate to have a variety of retirement savings opportunities available to them — from IRAs and SEPs to 401(k)s and 403(b)s — that can be used to save for retirement and save on some taxes.

These options are especially important now that traditional pensions and other employer-funded retirement plans have become increasingly rare. One big challenge, though, is determining which retirement savings vehicles may be right for you.

While the FDIC can’t advise you on where to put your money, we can help you understand the basic characteristics of different types of retirement options available from banks and other institutions so that you, perhaps in consultation with a financial or tax advisor, can make the right choices.

  • Tax-deferred retirement plans, which include traditional Individual Retirement Accounts (IRAs) and employer-sponsored 401(k)s, allow you to reduce your taxable income by the amount of the deposits or investments made each year. Tax-deferred retirement accounts may be best suited for people who anticipate their income tax rate will be lower after retirement than before retirement.

  • After-tax retirement plans, which include Roth IRAs and employer-sponsored Roth 401(k)s, enable a consumer to make contributions using after-tax dollars. This means the consumer has already paid income taxes on the funds that will be used for the deposits or investments.

Learn more about retirement savings and protections from the FDIC.