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Retirement may be many years away. You may feel you are too busy to think about it. Or, maybe you think Social Security will be enough to support you. Don’t count on it! Social Security may help, but it won’t meet all of your needs. The good news is that the earlier you start saving for retirement, the more money you will have. Click here to go to your Retirement Central.
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Your employer may offer you a way to save for retirement. If so, take advantage of this opportunity. If not, you can save for retirement on your own through an individual retirement account (IRA). There are two major advantages to saving through an IRA: |
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The money you put into an IRA usually can be deducted from your taxable income, so you pay less in taxes each year. |
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Your IRA money is not taxed until you withdraw it—a big advantage because you will have more money that will grow through compounding year after year. |
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You can withdraw your money without penalty six months after you reach age 59. Under certain conditions (such as buying a home), you may be able to take money out of an IRA without paying a penalty. However, if you take money out and do not meet the conditions, you will face a large penalty. You will pay a $1 for every $10 that you withdraw, which equals a 10% penalty. You will also pay income taxes on the money.
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