Colorado State Treasurer Dave Young stresses the importance of planning for retirement
National Financial Literacy month is recognized each year in April to raise public awareness of the importance of financial literacy and maintaining smart money management habits. This week, Colorado State Treasurer Dave Young emphasizes the importance of planning for retirement.
“National Financial Literacy Month is a great opportunity for us to check and promote our financial situation and skills,” stated Colorado State Treasurer Dave Young. “Deciding when to take social security and how to use your pension are some of the most important decisions you can make in retirement.
With 40 percent of private-sector workers in Colorado not having access to a retirement savings plan, almost 1 million Coloradans are not preparing for retirement.”
Retirement accounts are intended to provide income when you stop working. Without a retirement plan, you will have no other option other than to keep working past the “traditional” retirement age, as it is unlikely Social Security will provide you with enough income.
Colorado-sponsored retirement plan
The Colorado SecureSavings Program provides a simple retirement solution to private-sector employers at no cost. Private sector workers, including those who work part-time, are self-employed or seasonal, will now have a simple way to save for their future.
Instead of being tied to the employer like in a traditional retirement plan, the SecureSavings Program is tied to and travels with the employee if and when they move to a different job. No more messy paperwork to roll over or combine retirement plans.
Employer-sponsored retirement plans
Employer-sponsored plans can include 401(k) plans, SIMPLE IRAs, SEP plans, profit-sharing plans, employee stock ownership plans, 457 plans, cash-balance plans, and non-qualified deferred compensation plans.
Other options
Traditional IRAs allow individual investors to save for retirement on a pre-tax basis, up to certain contribution limits set by the IRS.
Roth IRAs are similar to traditional IRAs, but all plan contributions are made on an after-tax basis.
For investors who like the convenience and accountability of payroll deductions to fund savings strategies, some traditional and Roth IRAs can be set up to be funded on a pre-tax (for traditional IRAs) or post-tax (for Roth IRAs) basis via payroll deduction.
Guaranteed income annuities, sometimes simply referred to as income annuities, are a specific retirement savings tool that converts retirement savings into a regular monthly stream of income. Income annuities come in two forms — single premium immediate annuities (SPIAs) or deferred income annuities (DIAs).
Source: Colorado Department of the Treasury
