Retirement Planning With Multiple Accounts–Annuities And Roth IRA Accounts To Save For Retirement

When it comes to planning for retirement, many advisers have often suggested that investors use multiple retirement accounts as this can create benefits down the road in terms of more earnings for men and women after they retire. While there are some who have been able to only use one retirement vehicle and have saved plenty for their retirement needs, investors who are considering diversifying their retirement accounts often choose popular retirement investments like 401(k)s, Roth IRAs, or even annuities as a way not only to build up a nest egg for retirement but also structure withdrawals so that they have some form of income for the rest of their life.

Obviously, the investor will heavily depend on what forms of retirement planning will be best, whether they will choose what areas they want to invest in for their retirement or have a retirement fund manager or broker oversee investment strategies, or the types of retirement investments that individuals choose will also be different simply because of income limitations, one’s tax bracket, and goals for retirement.

A recent article on stated that when it comes to investing strategies and planning for retirement, “A broad mix of investments, a safe withdrawal rate (usually in the 4% neighborhood), and perhaps a small annuity to guarantee funds for the later years does the trick.” Yet, again, investing in retirement can be accomplished excessively through a few retirement accounts or multiple accounts, but investors must weigh both the pros and cons of various retirement opportunities and how they will affect their personal financial life.

As an example, many consumers choose annuities because they can offer payouts for the entirety of one’s life after they begin withdrawing the contributions and earnings made on this type of retirement vehicle. Obviously, being able to draw a steady income for the remainder of one’s life does offer security, but depending on the amount one has contributed over their life and the earnings, as well as the investor’s lifespan, the amount of money one can withdraw from their annuity will vary.

For reasons such as this, 401(k) plans or IRAs are also usually another option that investors choose when it comes to supplementing retirement income from other sources. For instance, some investors also choose a Roth IRA because earnings from this type of retirement account can be withdrawn tax-free when the investor needs these funds in later years. Yet, again, the right retirement account will also vary depending on one’s financial situation, as some investors choose traditional IRAs because contributions can be written off on one’s taxes each year, but taxes will be paid when the investor withdraws these funds later in life.

Yet, while there are numerous options when it comes to investing in retirement, many advisers are simply prompting employees to begin planning for retirement needs as there are concerns that many individuals who are currently in the workforce have simply not saved enough to meet expenses that may arise in their later years. While many feel that Social Security can also be helpful along with these retirement options, there are some analysts who say that current workers may be able to rely less on Social Security as the years go by, so proper planning for financial needs and a stable source of income is necessary in the now so that financial troubles do not arise after retirement.