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Decreasing number of employer-sponsored 401k: Poverty await a third of older US workers

Los Angeles 4/15/2015 03:00 PM GMT (WooEB)

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In a retirement planning report, Professor Teresa Ghilarducci of the New School Schwartz Center for Economic revealed that in 2011, almost half of working Americans did not have access to a retirement account from their work. On top of that, even those who are offered an employer-sponsored plan sometimes do not save enough to sustain their lifestyle after retirement.

The result is a pessimistic picture for those who are reaching retirement age. 55 percent of older workers between the age of 55 to 64 years old will have to rely on social security benefit during their retirements, or will not be able to retire at all.

The grim statistics show that Americans need to take the matter in their hands and start saving much earlier. For those who have an employer-sponsored retirement plan, it’s time to up the saving and make the most of any employer-matching contribution.

Those without an employer-sponsored 401k need to look at other options that can help them save for retirement. Most people think of a 401k first when talking about retirement planning. However, it is not the only option.

Most people will be qualified to set up an IRA account, which allows them to make yearly contribution and enjoy tax-deferral benefits. A Roth IRA even offers tax-free earnings, provided that the account holder pays tax up front for their contributions. When setting up an IRA account, plan owners can also choose to go with a self-directed IRA plan. This will give them total control over their money and investments.

For those who work independently as a self-employed contractor or business owners, there is another option called the Solo 401k plan. With this self-directed Solo 401k, the plan owners can contribute up to $59,000 a year in 2015. This generous limit allows American workers to catch up with their saving before it’s too late. Like with an IRA, a Solo 401k plan owner has the opportunity to self-direct their account and invest in what they know best.

The common thing among an IRA, a Solo 401k, and any other retirement plan is that they can only work if the plan owner starts saving and investing as early as possible. Because of the tax benefits that come with the retirement plan, the savings can grow exponentially into a healthy retirement fund over the years, if invested wisely.  

Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients to obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more about Solo 401k, please visit sensefinancial.com.



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