Retirement

Before even considering retirement, one needs to know the differences between 401(k) and IRA. A 401(k) is a free retirement account you can only get through an employer, and it holds money taken directly from your paycheck. Your employer also contributes money towards your retirement fund which is called “matching.” A IRA is set up so that your contribution each year is tax deductible and you aren't taxed on the income you make as it grows. You pay those taxes when you withdraw it for retirement, which you’re required to begin doing at age 70½. One must also know what social security is. Social security is a federal insurance program that provides benefits to retired people, the unemployed, and the disabled. In a way, retirement relates to personal savings in a way that, each month, you should set aside money for retirement. The smartest thing you can do about retirement however is to start early. Let’s say you decide to start saving for retirement at age 25 with a plan to retire at age 60. Let’s also say you decide to put away $100 a month into a 401(k). If you made no changes to the amount you saved, your account would hold nearly $380,000 when you wanted to retire. However, if you didn't decide to start saving for retirement until you were 35, you would only have a bit more than $130,000 by the time you were 60.  The earlier you start, the better. 

Resources: http://www.investopedia.com/categories/retirementplanning.asp#axzz2FBNFleaO
                     http://en.wikipedia.org/wiki/Retirement
                     http://www.nasi.org/learn/socialsecurity/overview
News Story: http://articles.marketwatch.com/2012-12-15/investing/35833570_1_fiscal-cliff-baby-boomers-x75
Video: http://www.youtube.com/watch?v=Yi_0gsW7BZI