Never too early to plan for Retirement

20 12 2011

The economy as of late has really opened my eyes. It causes me concern to think of those in their retirement that have been severely impacted by the rapid shrinking of their retirement portfolios. What if that was me? What am I doing about my retirement? I currently have a small percentage of my paycheck automatically invested before taxes into a 401-K. Is that enough? What else can I be doing?

After doing a little research, I found that another option to save up for retirement is to open up a Roth IRA Account. This will diversify tax risk if you are investing in both a 401-K (invest before- tax dollars, while withdrawals are taxed) and a Roth IRA (invest after-tax dollars, while withdrawals are tax free).

The sooner you start saving, the better. Just think about it, assuming you are 30 years old, if you invest the annual maximum of $5,000 until you are 50 and then the maximum of $6,000 until you are 60 at modest earnings of 6% annual return the investment would grow to nearly $430,000 tax-free!

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