Eventually everyone can stop working; it's called retirement. RETIREMENT is the action or fact of leaving one's job and ceasing to work.
(https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1GIWA_enUS645US645&ion=1&espv=2&ie=UTF-8#safe=strict&q=define+retirement+&*)
The full age to retire in the US is 67. The later you retire, the more you are paid.
(https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1GIWA_enUS645US645&ion=1&espv=2&ie=UTF-8#safe=strict&q=define+retirement+&*)
The full age to retire in the US is 67. The later you retire, the more you are paid.
PRESIDENT
ROOSEVELT.
THE SOCIAL SECURITY ACT.
During The Great Depression (1929-1939) many elders were in poor condition; some were even pushed the extent of begging. Franklin D. Roosevelt signed the Social Security Act in 1935. The act helped provide needs (Food/water, shelter, clothing, etc.) for senior citizens at the time. (to this day senior citizens still get Social Security checks)
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These days older generations believe younger generations will not have Social Security (checks) by the time they retire. They believe that "The money will disappear," or that it's somehow "going to be drained."
Well, how do we fix this? Younger generations (workers) pay taxes; the government takes these taxes and they become Social Security checks for senior citizens.
We could raise taxes; but honestly, no one would vote for a politician who says they'll raise taxes.
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We could raise the age to retire; but then it would be difficult for older people to get jobs.
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We could lessen Social Security checks; but then some people may not be able to survive off a lesser amount.
Saying "THE MONEY IS GOING TO DISAPPEAR," is complete nonsense.
This is mainly because we will always have workers. If people are always working and paying taxes, there will always be money for checks.
Use this Retirement Calculator to calculate the amount of money you'll have by the time you retire.
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another way of retiring;
PENSION PLANS.
A PENSION PLAN is a retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker's future benefit. (http://www.investopedia.com/terms/p/pensionplan.asp)
Pension Plans aren't as common as they used to be, but some companies still offer pension plans. (Companies like Johnson & Johnson, Eli Lilly & Co., and JPMorgan Chase & Co.)
(https://qz.com/679808/companies-with-defined-benefit-pension-plans/) |
In simple terms, a Pension Plan is any retirement plan offered to a company's employees. When you retire, the company you worked for would send you checks in the mail every month for the rest of your life.
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It used to be if you lived in a small/industrial town; you would work for the largest company there. The reason why many companies do not offer pension plans anymore, is
LIFE EXPECTANCY
Over the past years our life expectancies have gone up. If people were working for even more years and the company has to keep paying them; The company would eventually go
BANKRUPT
LIFE EXPECTANCY
Over the past years our life expectancies have gone up. If people were working for even more years and the company has to keep paying them; The company would eventually go
BANKRUPT
THE DIFFERENCE BETWEEN Defined-Benefit and Definded Contribution Plans
A DEFINED-BENEFIT PLAN is a defined-benefit plan is a retirement plan that an employer sponsors. (http://www.investopedia.com/terms/d/definedbenefitpensionplan.asp)
In this plan, the employers' assume investment risk.
In this plan, the employers' assume investment risk.
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A DEFINED-CONTRIBUTION PLAN is a defined-contribution plan is a retirement plan in which a certain amount of money is set aside each year by a company for the benefit of each of its employees.
(http://www.investopedia.com/terms/d/definedcontributionplan.asp#ixzz4cYf5Gux4) In this plan, the employees' assume investment risk. |
CONTRIBUTION PLANS
There are three types of contribution plans, 401(k) Plans, Profit Sharing Plans, and Employee Stock Ownership Plans. (ESOP)
401(k)
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401(k) Plans are the most common pension plans people use today. This is because if you don't like the job you're working; you can leave or switch jobs, with your money. You won't lose any. Yet, this annihilates the loyalty the employees have.
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Profit Sharing Plans are plans where the company you work for shares a portion of the profit with you (the employees) If the company does well, you make money. If the company does terrible, you lose money. Small, new companies tend to offer these.
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PROFIT
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EMPLOYEE STOCK OWNERSHIP PLANS
In ESOP's, instead of profits, employers give participants shares of stock in the company. It's not the best idea to only have an ESOP as your retirement plan because it lacks DIVERSITY.
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(IRA background image [edited]: https://www.dogtownmedia.com/app-development-and-ethics-at-the-crossroads-post-election/)
Here's a helpful article on the differences between Roth and Traditional IRAs.
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RETIREMENT is something you should start saving and investing for. The earlier, the better. You must set goals and make a plan. Once you have a plan that fits your needs, follow it. Honestly, it's as simple as that. Of course, you must make calculations and put effort and into it, though. The sooner you invest, plan, and save; The more money you'll have by the time you retire.