- Your money grows on a tax-deferred basis.
- Contributions to your IRA may be tax deductible.
- You can get to your money without a distribution penalty at age 59 ½.
It doesn't matter how old (or young) you are when you start saving for retirement. Even if you have already started, it doesn't hurt to look at all of your retirement saving options, including IRAs. Below is a quick overview of IRAs:
Coverdell Education Savings Accounts (CESAs)
Converting a Traditional IRA to a Roth IRA
Why Invest Now?
The sooner you start, the more money you'll have. And the longer you wait, the less you could have. Here's a startling (and real) example:
This chart shows the total account worth of your IRA if you start saving at 21.
Now see what happens if you wait until age 35 to start.
These charts assume annual contributions and a 3% rate of return compounded monthly. Your own plan may earn more or less than this example and income taxes would be due when you withdraw from your plan.
This content is for general information and educational purposes only and should not be considered tax, legal or financial advice. Please consult your tax, legal or financial professional for advice regarding your personal circumstances.