Question: How does retirement work ?
I am 20 years old and I have no idea how this retirement thing works. Is it something I should be worrying about ? What is the checking and savings account ?
Relation Questions:
Answer:
Start building your nest egg NOW, Preferably with a "Roth" account (unless the government changes the rules, you pay your taxes up front on money invested and there's no tax on earned interest on the back-end when you withdraw it) -- they weren't available when I was making my contributions.
Go to a bank and ask questions. A checking account allows you to write checks on the amount you have deposited. It is safer than carrying cash around. A savings account is where you deposit money that you don't want to use and want to accumulate. How retirement works is this. . .Now you go sign up for social security which is not enough to live on and medicare which will help some with medical costs. You are dependent on what you have saved throughout your life. What you save earlier on is what will multiply the most and be the bigger part of your savings. I suggest you look into finance a bit more so that you learn how to invest your money safely. I also suggest that every payday you save some money for big purchases and save some money that you are not going to touch...you're investment for later on. If you learn how to save and how to make your money work for you, you can be very well off later on in life. If you spend all you make, be prepared to work forever. The best investment you can make in your future is a good education.
If you start planning now you will be way ahead of most when it's time to retire.Put the maximum in 401k if you have one available where you work.
Retirement is money put away for your future like a 401k plan or you can get Roth IRA etc whatever you like but you should check around. IF you are working your company would have some kinds of plans for retirements..Once you saved this money in there and NOT take it out you can believe me YOU will have a HUGE egg nest waiting for you when you retire! Also all young kids like you should be saving up for SS to just in case SS runs out. So this is all like a Saving Account for your future..Checking account is money in the bank for you to spend or pay bills with and you write out a check or use a debit card. But have to have money in that account.
Retirement is the point where a person stops employment completely. A person may also semi-retire by reducing work hours.
Many people choose to retire when they are eligible for private or public pension benefits, although some are forced to retire when physical conditions no longer allow the person to work any more (by illness or accident) or as a result of legislation concerning their position. In most countries, the idea of retirement is of recent origin, being introduced during the late 19th and early 20th centuries. Previously, low life expectancy and the absence of pension arrangements meant that most workers continued to work until death. Germany was the first country to introduce retirement, in 1880.
Nowadays most developed countries have systems to provide pensions on retirement in old age, which may be sponsored by employers and/or the state. In many poorer countries, support for the old is still mainly provided through the family. Today, retirement with a pension is considered a right of the worker in many societies, and hard ideological, social, cultural and political battles have been fought over whether this is a right. In many western countries this right is mentioned in national constitutions.
First rule
NEVER RETIRE. Retirement is a slow death.
Work gives you life and purpose to your life.
Second rule:
When approaching retirement age; be sure all your debts are paid in full.
No credit cards, no mortgage, nothing!
Advice:
Buy the book "Live Young Forever."
Retirement doesn't work. That is the idea---you are done with work. If you haven't put away enough money to retire comfortably, look back and see all the stupid things you bought when you could have been saving.
The first thing you should do is treat social security as a supplemental income and invest as much as you are legally allowed and if you do that you won't find yourself on yahoo answers complaining.
it works a treat, I recommend it.You can be yourself do as you please,and if you have paid in to a pension- self sufficient