The best time to start retirement planning? Right now.
When you're going to work every day, it's natural to focus on the here and now. But it's a good idea to look down the road a bit. After all, the sooner you start saving for retirement, the more money you could have to do everything you've imagined. One way to make that happen is with an Individual Retirement Account that features steady earnings and tax benefits that help you keep more of your hard-earned nest egg.
Traditional IRAs
- Contribute up to $6,500 a year (Up to $7,500 if you are over age 50)
- Enjoy a potential tax deduction each year you make a contribution
- Annual interest and dividend earnings are tax-deferred
- You may start withdrawing funds penalty-free at age 59 ½
- There are some circumstances where you may begin distributions earlier, such as if you become disabled or encounter major medical expenses
- In normal circumstances, distributions must begin by age 72 to avoid federal tax penalties
Roth IRA
- Contribute up to $6,500 a year (Up to $7,500 if you are over age 50)
- Annual interest and dividend earnings are tax-deferred
- All qualified withdrawals are tax-free
- You may start withdrawing funds penalty-free at age 59 ½
- There are some circumstances where you may take withdrawals earlier, such as if you become disabled or are purchasing your first home
- Unlike a Traditional IRA, you are never required to take distributions