A Self Directed 401k And My Post Retirement Account.
With the way things are with our economy, my retirement finances aren't looking so good. I'm just your average blue collar Joe working on a manufacturing plant. Sadly it's a US car manufacturer. Married with a couple of kids. I am no longer sure that my current pension plan can support the standard of living we are accustomed to, such as it is. Is my pension enough? How about our joint savings? Will I be able to provide for my family? I have to make sure I have the right retirement plan. A friend of mine mentioned Self Directed 401K.
I had no idea what this 401k really is at the time. What's the internet for if not for researching stuff I don't know anything about right? As it turns out, it's another sort of retirement savings account. One feature I really like about this plan is the tax deductibility. Let's say I want to direct 30% of my income to the 401k. The remaining 70% will be my only taxable income. The 30% that I will deposit to the fund is essentially untaxed, atleast until after I withdraw it during retirement. Any profits from interest gains are also not taxed until after the funds are withdrawn. Compounding interest with delayed taxation sounds really good I must say. Most employers help out their employees by matching a percentage of their deposits into the account. With this type of plan, the employees are merely given a set of investment choices by the employer who acts as administrator for the 401k. A 401k plan can be self directed. Like any other retirement fund, a self directed 401k will not let you access funds for personal uses but it will offer other features that you can utilize.
Self Directed, meaning contributors to the account have a say or a vote on how the funds accumulated in the account should be spent or invested. Now to me this sounds very reassuring. I'm sure most of you are familiar with the Madoff debacle and the countless people whose futures he has ruined. Imagine losing your life savings just like that in investments and transactions you are not even aware of. Wouldn't you personally want to know here your money is going? I would like a vote on where my money is going to be spent and on how. All of the participants should have a say with regards to the future of their investments. Who wants to be just a name in a deposit slip.I won't settle for being just a name on the account. This isn't just a small thing for most of us. It's hard earned money for the future. I don't want to have to work a cash register in a convenience store when I'm retired like that 85 year old man I saw on the news. My heart went out to that old man when I saw the story about how Bernie Madoff ruined countless futures. I don't want the same thing to happen to me. I want security for my future and more importantly for my family's future. I'll have to really look into this self directed 401k. It sure does look like a good option for me.
I had no idea what this 401k really is at the time. What's the internet for if not for researching stuff I don't know anything about right? As it turns out, it's another sort of retirement savings account. One feature I really like about this plan is the tax deductibility. Let's say I want to direct 30% of my income to the 401k. The remaining 70% will be my only taxable income. The 30% that I will deposit to the fund is essentially untaxed, atleast until after I withdraw it during retirement. Any profits from interest gains are also not taxed until after the funds are withdrawn. Compounding interest with delayed taxation sounds really good I must say. Most employers help out their employees by matching a percentage of their deposits into the account. With this type of plan, the employees are merely given a set of investment choices by the employer who acts as administrator for the 401k. A 401k plan can be self directed. Like any other retirement fund, a self directed 401k will not let you access funds for personal uses but it will offer other features that you can utilize.
Self Directed, meaning contributors to the account have a say or a vote on how the funds accumulated in the account should be spent or invested. Now to me this sounds very reassuring. I'm sure most of you are familiar with the Madoff debacle and the countless people whose futures he has ruined. Imagine losing your life savings just like that in investments and transactions you are not even aware of. Wouldn't you personally want to know here your money is going? I would like a vote on where my money is going to be spent and on how. All of the participants should have a say with regards to the future of their investments. Who wants to be just a name in a deposit slip.I won't settle for being just a name on the account. This isn't just a small thing for most of us. It's hard earned money for the future. I don't want to have to work a cash register in a convenience store when I'm retired like that 85 year old man I saw on the news. My heart went out to that old man when I saw the story about how Bernie Madoff ruined countless futures. I don't want the same thing to happen to me. I want security for my future and more importantly for my family's future. I'll have to really look into this self directed 401k. It sure does look like a good option for me.
Source...