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So you’re thinking that retiring someday in the near (or not-so-near) future has a pretty nice sound to it. Not so fast. You need to set an effective retirement plan into motion while you’re still young enough to reap the benefits of it.

The first thing you should do is determine what your retirement benefits will be with your employer, as your pension check will most likely be your primary source of income during retirement. The amount of your retirement benefits depends on many factors such as time on the job, seniority, etc. so it is best to sit down with your employer or visit your human resources department to determine what your estimated retirement pay would be.

Alas, you may discover that unless you plan to live the rest of your life as a hermit, this monthly stipend alone won’t support you and your family. You’ll obviously have to start saving money, but even that is not as simple as just sticking it into a passport savings account at a credit union and earning a measly 3% interest. Individual Retirement Accounts (IRAs), mutual funds, and life insurance policies should all be considered as possible supplements to your primary retirement income.

IRAs are excellent tools for retirement planning for may reasons. First of all, investments of up to $2000 per year are usually tax deductible in the tax year you contributed the funds as well as tax deferred, which means that you don’t pay any taxes on the interest earned until you actually withdraw there money. This helps in the long run because most people will earn less money in later years, which translates into your being in a lower tax bracket and paying fewer taxes that you did when you were in your thirties. A change to the tax law in 1998 also allowed an additional $2000 tax-deductible investment into a spousal IRA for a non-working spouse (up from $250 in 1997.) However, the IRS may charge a ten percent penalty if you withdraw money early, so be sure you won’t need the money for anything else before age 59 ½.

Also available is the Roth IRA. Unlike a traditional IRA, your annual contributions are not tax deductible. However, you also will not have to pay taxes on withdrawals made after the age of 59 ½. One of the biggest benefits of a Roth IRA is your ability to make penalty-free withdrawals before the age of 59 if the funds are used to cover college costs for your children or a down payment on your first home. Otherwise, like with the traditional IRA, the IRS will levy a ten percent penalty.

Another avenue to consider is investing in mutual funds. A mutual fund is an investment company that pools its shareholders’ funds and invests them in a broad range of companies. This diversification decreases risk to the individual investor. You can buy shares directly from the mutual fund, or if you don’t feel comfortable tackling this task alone, many companies will gladly help you build and manage your investment portfolio. Whether you want to invest in blue chip companies, high-yield corporate bonds, or in U.S. companies investing overseas, there is an investment management service available for you. Don’t have the $1000 initial investment that many mutual funds require? Many funds allow investments of as little as $50 per month if you set up an allotment to your mutual fund account.

Another frequently overlooked way to plan for a successful retirement is by purchasing life insurance. While life insurance is usually associated with the death of the insured, a good life insurance policy can also help you generate a tidy sum for use during your retirement years. There are basically two types of policies: term and whole. Term life insurance provides coverage for a specific term. However, as an individual gets older, the cost of the term [insurance] tends to increase and the lower cost term coverage is usually unattainable during the later stages of life as health problems begin to occur.

Alternately, whole life insurance provides lifetime protection, but your premiums will be a bit higher. You’re overpaying in the early year premiums in order to keep your premiums even in the later years when mortality charges cause insurance costs to increase dramatically. However, the amount you overpay in the early years is used to develop a cash reserve, so the earlier you start your life insurance policy the larger your cash reserve will be. Ultimately, investing in a cash-value policy is a way of saving for retirement while providing your family with insurance protection.

Whichever avenue (or avenues) you choose to take, your retirement planning motto should be, “Don’t put off until tomorrow what you can do today.”