Having personal control over your retirement plan is a matter that many of us will take very seriously when it comes time for our working career to draw to a close. As it is, we have very little control at the moment over our financial situations and we long for the days when we can “call the shots” in terms of our retirement years and do what we want with our money when we want to do it. But just how realistic is a self directed retirement plan for a viable future?
The Options Are Out There
Learning about the options for you and your self directed retirement plan can be complicated as each accountant has their own version of the facts to impart to you as a consumer to the retirement plan industry. The reality is, however, often quite different than a biased company line and this brief article will attempt to outline some of the options and some of the realities of the self directed retirement plan and what it can mean to you and your family.
Your accountant will likely tell you to set up some IRAs in your working career. IRAs are individual retirement accounts and are generally an inflated version of a savings account that is designated strictly for the purpose of your retirement. These accounts were authorized by the United States Congress in 1978 and encourage the user to save pre-tax money in the present to pay taxes later based on the expected lowering of your retirement’s tax bracket.
Another good piece of advice for maintaining a good self directed retirement plan is the implementation of several stock investments. These investments can help you grow and prosper and help expand your assets portfolio to include items of constant and consistent growth, thus subsidizing your expected loss in income with the extra funds allocated through the stock market and other avenues of investment.
An SEP or Simplified Employee Pension plan is another integral portion to maintain if you are constructing your own self directed retirement plan. These are retirement plans designed specifically for self-employed or small business owners and helps cover your employees as well. The SEP has a variety of tax advantages such as a 25% tax deductible compensation upon dispersal and a tax deferred growth potential quotient that translates into less overall taxation on investment earnings.
Using these options and more to construct your own self directed retirement plan might seem like an impossible task. However, with the right information and a little bit of guidance you can maintain the security of your present financial situation well into your uncertain future on the other side of retirement.