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6 Retirement Plans Millennials Should Start Thinking About (Or Embrace ASAP)

6 Retirement Plans Millennials Should Start Thinking About (Or Embrace ASAP)

Most millennials are still struggling to pay their student debt, so when you tell them to think about retirement plans, most of them are going to tell you to stop mocking them. The reality is, retirement plans are not a priority for millennials, but they should be. Why? Time flies! And starting to save early in life is going to ensure your retirement years are happy years.

Unfortunately, most millennials are afraid of all those complicated words and the sheer length of tax codes, so they need someone to explain these things in plain English. Well, here are the 6 best retirement plans for millennials explained.

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1. 401(k)

The 401(k) is the most popular plan, and most employers offer it, so you can just make a call to the HR department of your company and ask them to solve the papers for you. The maximum revenue is $18,000 per year, and you can pick how much you want to contribute. The contributions are made before the taxes, which are paid when you will take out the money.

One of the major benefits of a 401(k)[1] is the fact that it enables you to grow your retirement plan fast, but you have to stick to the options your employer picked for you.

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2. Regular IRA

If you have a taxable income, or your spouse has one, you are eligible for IRA.[2] With this plan you can earn $5,000 per year, and the contributions are made before the taxes, just like with the 401(k). You are going to pay the taxes when you take out the money.

Of course, this ensures a high growing rate for your fund. Unlike the 401(k), you can invest your money in investments offered by your bank. The cons come with the taxes: because you pay the taxes when you withdraw money, you might notice your tax bracket is higher when you take out the money, so you will be paying more taxes.

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3. Gold IRA

This is not exactly a retirement plan itself, but more of an option to add to your regular plan. Regular IRA and 401(k) are compatible with gold investments. Gold IRA is exactly what you think: investing your money in gold,[3] because its value grows nice and steady over time.

4. Roth IRA

The Roth IRA is dedicated to singles who earn at least $116,000 per year, or couples who earn less than $180,000 per year together. The best thing about this retirement plan is the fact you won’t pay taxes when you take out the money! The contributions are made after the taxes, and you can earn as much as $5,500 per year. Another nice fact is there is no mandatory withdrawal when you are 70 years old, as it is with the other plans.

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5. SEP IRA

As many millennials are entrepreneurs, or they are on their way to becoming entrepreneurs,[4] here are two retirement plans dedicated to small businesses. The SEP IRA allows you to plan for your retirement along with your employees. The maximum amount is 25% of an employee’s compensation, or $51,000. For the employee this plan comes with free money from the employer, and for the employer it comes with tax deductions for the contributions. This is one of the best retirement plans for the self-employed. The con of this plan is the fact that you will pay taxes at the current tax rate when you start withdrawing.

6. Simple IRA

Another IRA for businesses, with a $12,500 maximum contribution. The contributions are taken from the employees salary, and the employer can contribute to his or her account, or to their employee’s accounts. The employee can decide how much to contribute on this plan, and the contributions are made before the taxes. At withdrawal you also pay the taxes.

With a simple IRA the penalization for withdrawing before 60 years of age can be up to 25%, so make sure you do your calculations right.

Featured photo credit: Unsplash via unsplash.com

Reference

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Last Updated on March 24, 2021

8 Smart Home Gadgets You Need in Your House

8 Smart Home Gadgets You Need in Your House

We’ve all done it. We’ve gone out and bought useless gadgets that we don’t really need, just because they seemed really cool at the time. Then, we are stuck with a bunch of junk, and end up tossing it or trying to sell it on Ebay.

On the other hand, there are some pretty awesome tech inventions that are actually useful. For instance, many of the latest home gadgets do some of your work for you, from adjusting the home thermostat to locking your front door. And, if used as designed, these tools should really help to make your life a lot easier—and that’s not just a claim from some infomercial trying to sell you yet another useless gadget.

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Take a look at some of the most popular “smart gadgets” on the market:

1. Smart Door Locks

A smart lock lets you lock and unlock your doors by using your smartphone, a special key fob, or biometrics. These locks are keyless, and much more difficult for intruders to break into, making your home a lot safer. You can even use a special app to let people into your home if you are not there to greet them.

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2. Smart Kitchen Tools

Wouldn’t you just love to have a pot of coffee waiting for you when you get home from work? What about a “smart pan” that tells you exactly when you need to flip that omelet? From meat thermometers to kitchen scales, you’ll find a variety of “smart” gadgets designed to make culinary geeks salivate.

3. Mini Home Speaker Play:1

If you love big sound, but hate how much space big speakers take up, and if you want a stereo system that is no bigger than your fist, check out the Play:1 mini speaker. All you have to do is plug it in, connect, and then you can stream without worrying about any interruptions or interface. You can even add onto it, and have different music playing in different rooms.

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4. Wi-Fi Security Cameras

These are the latest in home security, and they connect to the Wi-Fi in your home. You can use your mobile devices to monitor what is going on in your home at all times, no matter where you are. Options include motion sensors, two-way audio, and different recording options.

5. Nest Thermostat

This is a thermostat that lives with you. It can sense seasonal changes, temperature changes, etc., and it will adjust itself automatically. You will never have to fiddle with a thermostat dial or keypad again, because this one basically does all of the work for you. It can also help you to save as much as 12% on heating bills, and 15% on cooling bills.

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6. Smart Lighting

Control your home lighting from your remote device. This is great if you are out and want to make sure that there are some lights on. It is designed to be energy efficient, so it will pay for itself over time because you won’t have to spend so much on your monthly energy bills.

7. Google Chromecast Ultra

Whether you love movies, television shows, music, etc., you can stream it all using Google Chromecast Ultra. Stream all of the entertainment you love in up to 4K UHD and HDR, for just $69 monthly.

8. Canary

This home security system will automatically contact emergency services when they are needed. This system offers both video and audio surveillance, so there will be evidence if there are any break-ins on your property. You can also use it to check up on what’s happening at home when you are not there, including to make sure the kids are doing their homework.

Featured photo credit: Karolina via kaboompics.com

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