Are you paying your future you enough? They always say “Save as often as you can!” and “The earlier the better”.
If your company does not offer a retirement savings plan, here is an ideal option to keep the ball rolling:
- A traditional IRA is a tax-advantaged savings account that is used to prepare for retirement. It’s the IRS way of encouraging everyone to save for your golden years.
- You can deduct traditional IRA contributions and postpone taxes until you withdraw that money in retirement. In short, your money grows tax free (if you choose a traditional IRA) and, with the beauty of compounding interest, it grows even more!
- The IRA contribution limit for 2019 is $6,000 per year and jumps to $7,000 IF you are over 50. If you need to withdraw money before you turn 59 ½ you’ll be penalized and taxed. This makes it harder to “use” your savings for anything other than an emergency. After 70 ½ the government requires you to take a mandatory distribution.
Talk to a Registered Investment Advisor or open an account on a financial institution. To keep it simple, set up a recurring deposit to your IRA account to max out the contribution limit and put your money to work! Your future self will thank you!