Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Anyone who wishes to save money for retirement should consider a Roth IRA. This is particularly true if you are currently in a rather low income tax bracket. The key is that the deposits are made with after tax dollars and the money withdrawn is not taxed at all, unless it is withdrawn before age 59 and a half. Many people will not move to a lower income tax bracket when they retire and a Roth IRA is ideal for that situation. There are other advantages to a Roth IRA.
To find out if you should by a Roth IRA, just take a picture of yourself and go to the internet where you can have the picture morphed to age 65. When you have that picture, ask the picture if you should buy a Roth IRA. You are never too young to begin saving for retirement because you might spend almost half of your life retired.
If you are working for a company that offers a retirement program, that is the first place to look. What you are looking for is the maximum amount that your employer will match of your contributions and what you must do to get those matching funds. This is “free money” and is the best place to save money regardless of other difficulties you might see with the plan. At the same time check the vesting schedule to see if you will be able to actually receive those benefits depending upon how long you reasonably expect to work for the company.
Since your company controls all the investments that your retirement plan might have, you might want to think twice before contributing more than the amount required to get the maximum matching funds. It is worth noting that the company sponsored plan is probably covered under ERISA and that gives you some guarantees you cannot get elsewhere.
The whole financial world is out looking for additional contributions that you might want to make to your retirement. This is where you need to make a decision about a Roth IRA. My first advice is to get a planner with whom you are comfortable. Some planners don’t listen well and you really want one that will listen to your dreams and aspirations. The planner you want will communicate clearly with you and with any companies that help manage your money. It will be his job to match your dreams to your abilities to provide for those dreams. If your planner constantly boasts about his advice and returns on investment, look for the exit. High returns on investments often go hand in hand with disastrous results.
The fundamental thing to remember about retirement planning is that “return on investment” is not the key issue. The key issue is shifting consumption. When you move capital to your future you accomplish your mission. Fundamentally, saving for retirement is consuming less now so you can consume more lately. The return on investment is frosting on the cake. Many who leaned on return on investment found themselves unable to retire in 2008. That is still burned in many people’s memory.
Without stepping into your planners shoes, I would like to point out that you are probably in a lower income tax bracket now than you will be in the future. This makes it important to consider a Roth IRA as your funding vehicle. While not giving you a current tax break it does provide a retirement benefit that cannot be obtained elsewhere—tax free income. There are other significant benefits but being able to drawn down a tax free account is a wonderful option.
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To find out if you should by a Roth IRA, just take a picture of yourself and go to the internet where you can have the picture morphed to age 65. When you have that picture, ask the picture if you should buy a Roth IRA. You are never too young to begin saving for retirement because you might spend almost half of your life retired.
If you are working for a company that offers a retirement program, that is the first place to look. What you are looking for is the maximum amount that your employer will match of your contributions and what you must do to get those matching funds. This is “free money” and is the best place to save money regardless of other difficulties you might see with the plan. At the same time check the vesting schedule to see if you will be able to actually receive those benefits depending upon how long you reasonably expect to work for the company.
Since your company controls all the investments that your retirement plan might have, you might want to think twice before contributing more than the amount required to get the maximum matching funds. It is worth noting that the company sponsored plan is probably covered under ERISA and that gives you some guarantees you cannot get elsewhere.
The whole financial world is out looking for additional contributions that you might want to make to your retirement. This is where you need to make a decision about a Roth IRA. My first advice is to get a planner with whom you are comfortable. Some planners don’t listen well and you really want one that will listen to your dreams and aspirations. The planner you want will communicate clearly with you and with any companies that help manage your money. It will be his job to match your dreams to your abilities to provide for those dreams. If your planner constantly boasts about his advice and returns on investment, look for the exit. High returns on investments often go hand in hand with disastrous results.
The fundamental thing to remember about retirement planning is that “return on investment” is not the key issue. The key issue is shifting consumption. When you move capital to your future you accomplish your mission. Fundamentally, saving for retirement is consuming less now so you can consume more lately. The return on investment is frosting on the cake. Many who leaned on return on investment found themselves unable to retire in 2008. That is still burned in many people’s memory.
Without stepping into your planners shoes, I would like to point out that you are probably in a lower income tax bracket now than you will be in the future. This makes it important to consider a Roth IRA as your funding vehicle. While not giving you a current tax break it does provide a retirement benefit that cannot be obtained elsewhere—tax free income. There are other significant benefits but being able to drawn down a tax free account is a wonderful option.