It is possible to have a retirement plan that does not simply rely on your payments alone to help you save. If you work for a company that offers a 401(k) then it is possible that the company will match your savings up to a certain amount. This is a great opportunity to save money and not all of it is directly out of your paycheck.
Many companies use to offer pensions but for the most part these plans have been done away with do to bad management of the funds. Today it is very common for a person to do all their saving for retirement by themselves with their own chosen funds. To know which fund you will need to use and how much money you will need to be save you can use a retirement calculator, this will help to keep you on track with your savings.
Common retirement savings are different IRAs, annuities, and savings account based forms. When putting your money into some form of savings such as a savings account, CD, or money market account you have to be sure that the interest earned on the account is enough to actually save your money. Many times savings accounts do not earn enough interest to use as a retirement fund, CDs tend to earn a little more but not enough.
The real funds that need to be used by most people are IRAs and annuities. IRA accounts tend to be better for those starting to save at a younger age than those that utilize annuities. The reason for this is because IRAs have limits on how much money you can place into the fund and annuities are non limited. A person of any age can put as much money as they want into their annuity.
Both funds earn interest but depending on how you choose to be paid by an annuity will determine what kind of payments you receive. An annuity can be payed out as a variable or fixed amount meaning when fixed you receive the same amount of money each payment. With a variable account you can be paid more money one time and less the next, just depending on how the investment of the annuity does. These are the basic details about a few retirement accounts, each one will fit each person differently so do your homework before deciding.