We’re sure you’ve heard the cliché before: it’s never too early to begin investing in your retirement. But like most cliches, this is repeated so often because it’s true. The earlier you start to prepare for retirement, the more comfortably you will live out your years after leaving the workforce. One of the best ways for people to prepare for retirement is with a personal IRA. Today, we’ll explain why you should start one for yourself.
Most people remember the feeling of getting their first-ever paycheck, only to be immensely disappointed by how much of your total earnings go to taxes. But if you choose to invest in a personal IRA, you will enjoy the benefits of tax-advantaged retirement plans.
People often refer to traditional IRAs as ‘tax-deferred.’ This is because your contributions to the account are not taxed. While the details vary depending on your filing status, they are typically deductible. Then, when you withdraw amounts from your IRA during requirement, you pay the taxes.
The other common kind of personal IRA is what’s known as a Roth IRA. This is basically the opposite of the traditional option. Your contributions are taxed, but then they’re allowed to grow tax-free. Then whatever withdrawals you make in the future will not be taxed, either.
There is no way to completely get around taxes when it comes to retirement planning. But investing in some kind of personal IRA will give you a net gain when it comes to tax payments.
Secure Your Retirement
You may have heard some grumblings about how difficult it will be for millennials to retire. Don’t ignore them.
While traditional wisdom has dictated that you can afford a comfortable retirement by saving 15% of your annual income, that number is rapidly ballooning for the younger members of America’s workforce. Some experts have suggested that millennials should save closer to half of their annual income for a good chance at retirement at 65.
With odds mounting against you, it’s imperative to use every tool in your power to secure a better chance at retirement. Generous contributions to a personal IRA—in conjunction with a 401k—will boost your odds at achieving a happy retirement significantly.
The years go by fast. As you get older, they will only go faster. Start thinking about the future, and invest in your retirement today with a personal IRA.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim to decrease your taxes and increase your net worth through responsible, timely, and accurate record keeping. We offer our services to clients throughout the Washington, D.C., metropolitan area, including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.