Retirement Essays - Individual Retirement Accounts, Free Essays

Retirement Essays - Individual Retirement Accounts, Free Essays Retirement Retirement Retirement seems to be one of the most often overlooked areas of peoples future plan. Simply because it seems so far away, it is an area that is subject to procrastination. People are expected to live longer now than ever before, this is another reason why young adults and teenagers are not worried about saving for their retirement. The baby boom generation, the seventy seven million people born between 1943 and 1960, face an entirely different retirement plan. As they began to retire, people are starting to think that there will be no money left and this will turn into a crisis. What will happen when seventy-seven million baby boomers begin to want the money they paid in but it is not there? Retirement provisions such as Social Security, IRAs, and 401ks are there to help when you are deciding how to save money. Social Security started a long time ago, in the 1930s, when Franklin D. Roosevelt was president. He was elected president in November 1932. By March there were over thirteen million people that were unemployed, and almost every bank was closed. Franklin D. Roosevelt proposed a sweeping program to being recovery to business and to agriculture and relief to those who were in fear of losing their farms and homes to being unemployed. In 1935, recovery was slowing arriving, but more And more people were turning against Roosevelts New Deal program. This led Roosevelt to a new program of reform, which we know today as social security. It stated heavier taxes on the wealthy, new way of controlling banks and public utilities, and a huge work relief program for those people who were unemployed. Social Security has been around for so long, but now people under the age of sixty-five think it will go bankrupt before they retire, according to a new CNN/TIME poll, and most of them do not think they will be able to save enough on their own. Only thirty-one percent say that the system is currently in a crisis; majority just feels that there are problems but not a crisis. The way you feel about Social Security is based totally on what age you are. People over fifty seem to think the system is fair while others feel it is not. In the Industrial Age, a Defined Benefit pension plan meant that the company guaranteed you, the worker, and a defined amount of money for as long as you lived. This made people feel secure because these plans assured a steady income. IRAs, Individual Retirement Accounts, are a vital part of retiring plans. There are two different types of IRAs, which include Roth and Traditional IRAs. Roth IRAs are said to give Americans another way to save on taxes. A Roth Ira can be withdrawn tax-free, as long as the account has been open at least five years and you are age fifty-nine and a half when you begin withdrawing the proceeds. The contributions can be up to two thousand dollars per person or four thousand per couple. The beauty of a Roth IRA is its simplicity. You can contribute to a Roth IRA even if you have an employer-sponsored retirement plan. You can contribute to a Roth IRA even if you have an employer-sponsored retirement plan. You can make contributions to a Roth IRA at any age as long as you are earning income. Your contributions however, cant exceed your income. Someone who contributes even a little as a teenager can end up with quite a bit of money later on. With a Roth IRA your beneficiaries will not have to pay income tax on it. A Traditional IRA is for taxpayers that are under the age of seventy and a half, who are still working. Some people prefer the traditional IRA because they can get an immediate tax deduction equal to the contribution they put in. The money in a Traditional IRA grows tax-deferred. You have to pay a tax on all your earnings. Distributions of a Traditional IRA are required at the age of seventy and a half or you have to face penalties. There are also penalties on withdrawals before the age of fifty-nine and a half such a ten percent tax