Am I Too Young To Have An IRA?
The simple answer is “NO!” My very first job was working at McDonald’s as a cashier in high school. I’d make about $100/week and spend it on food or clothes since I didn’t have a lot of other expenses at the time. Now that I’m in my 20s, I look back and wonder why I didn’t save at least $25 of each paycheck. Well, I know why. I wasn’t thinking about saving for a house, paying off student loans, buying a car, or retirement! I didn’t know anyone who was thinking about these things as teenagers.
Now that I’m working full-time in my career, future financial security crosses my mind at some point every day. Instead of constantly worrying about this, I decided to do something about it. I opened an IRA a couple of years ago and I’m SLOWLY, but CONSCIOUSLY saving so I can be somewhat less concerned about finances as retirement age approaches. Retiring 30 years from now may seem like forever but sometimes I have to remind myself to spend (modestly) AND SAVE (actively) like I’ll live to be 100!
So, what is an IRA and why is it worth considering? An IRA is an Individual Retirement Account and anyone who earns taxable income can make contributions to one. There are restrictions regarding what age you have to be to make withdrawals but you may rest easier at night knowing you don’t have to worry about how you’ll make mortgage payments if you don’t own your home by the time you retire. IRAs are worth looking into, especially if your job doesn’t offer a retirement savings options. While Social Security benefits are helpful, sometimes that money is not sufficient for you to maintain your pre-retirement lifestyle. IRAs also have tax benefits! With the traditional IRA, you can earn tax deductions from the money you contribute each year. With the Roth IRA, you pay taxes up front and withdraw money tax free when you’re eligible to do so.
It’s never too early to begin saving!
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