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October 15, 2012
You are never too young to start saving for retirement! When we work with clients who start a retirement plan later in life, more often than not, they regret waiting so long to get their plan in action. If you are a young adult in your mid 20’s to mid 30’s with any amount of earned income, it’s time to start thinking about your retirement.
A Roth IRA is a great option for young people looking to start saving for retirement. Think about it – a person who opens a Roth IRA at the age of 25 and maxes out the contributions every year until age 65 will save approximately $1.4 million (assuming the historical 8% rate of return prevails). Here are 3 reasons why you should open a Roth IRA today:
It’s Never too Early to Plan for the Future
TIME is more important than the SIZE of the account. A person of any age can open a Roth IRA as long as they can show that they have earned income (money made from the mind or sweat of the brow) in any given year. An interesting twist – even if you are an infant, as long as you’ve got a social security number and earned income, you can contribute to an IRA. If your child is one year old and gets chosen to model for pictures in a brochure, receiving 1099 income for their work, this earned income can be contributed to their IRA account.
You CAN Afford the Money
A Roth IRA can be started with any amount of earned income. Once you have the funds in the account, you can choose an amount that you are comfortable contributing on a yearly basis and continue to grow your retirement funds from here.
Easier Access to Funds before Retirement
Roth IRAs allow for more flexibility to make withdrawals before retirement. If you contribute to a Roth IRA, those contributions can always be withdrawn without taxes or penalties with no limitations. For Roth accounts that have been funding through conversion, there is a 10% penalty for withdrawals under the age of 59.5.
Saving consistently and investing wisely is a simple formula for success, but sometimes challenging to put into practice. By starting young, you can get in the habit of saving for your future, and soon it will become second nature to make smart investment decisions. At NuView IRA, we let our clients invest in many ways they never thought possible. Give our Florida IRA administration company a call today at (407)-367-3473 to learn more!