PRINT
Identity theft, also known as ID theft, is a crime in which a …
Planning for retirement yet? Start saving while you're in your 20s - American Heritage Bank
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Posted: 05/11/2012
Have you started planning for your retirement?
It's better to start early rather than wait.
Planning for retirement in your twenties
When you’re in your 20s, you have many different financial objectives.
Paying off student loans, saving for a home and starting a family may loom large on your financial horizon, while more distant issues, such as retirement, seem like minuscule dots on a completely different plane of existence.
Waiting to start saving for retirement can reduce your ability to live comfortably during your retirement years.
And because Labor Department statistics show that 10.5 percent more individuals aged 65 through 69 were working in 2010 than in 1990, this is a lesson that can’t be learned soon enough.
A little now translates to a lot later
One of the distinct advantages of saving for retirement while you are in your 20s is that it takes very little in the way of contributions to make a very large difference in overall savings.
Small amounts of money saved for long periods of time are able to accrue compounded interest and grow.
For example, let’s say you are able to save $100 per month between the ages of 20 and 30.
Your money, placed in an IRA with a fixed investment like a CD, grows at 2 percent and is compounded (meaning the interest earns interest) monthly. By the end of the 10th year, you will have saved a total of $13,406.84. And even if you never save another dime in that account, and if it continues to earn 2 percent interest, it will grow to $24,551.85 in 30 more years.
Maximizing saving opportunities
Opening a Traditional or Roth IRA allows you some flexible tax-deferral or tax-free distribution options.
But IRAs are not the only way to save for retirement. If your employer offers a 401(k) match, then you could effectively give yourself a raise by maximizing the contribution you must make in order to earn the match.
And on top of the free money from your employer, both your contributions and your employer’s will grow based on the underlying investments you choose for your account. Making this election when you are in your 20s, when your income is lower than what you can expect to earn in your 30s and beyond, is a great way to help gain a competitive edge in saving for retirement without sacrificing your ability to pay off student loans and start a family.
While you can’t control who administers your employer’s 401(k) accounts, it’s important that you choose the right custodian for your IRA account.
The ability to set up automatic deposits and invest in a variety of assets with varying levels of risk is important.
Give us a call at 918-227-2265, and we can walk you through our retirement planning options and help you determine which type of investment is best for you. Be sure to consult with a tax advisor or accountant about your specific situation.
Source: American Heritage Bank
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Watching your child become more financially independent is both…
If anything can be learned from the housing crisis of the past …
Legal headlines
-
Putting a gag on farm animal abuses
It’s not an uncommon belief amongst industrialized animal farmers: Keep possible animal cruelty and other distasteful business practices out of the public eye. No photos or videos are to be taken without the owner’s discretion.
-
Workers can complain online
The National Labor Relations Board has issued a series of rulings and advisories that have made it illegal for employers to fire anyone who casts the company in an unfavorable light online.
-
‘Tis the season for holiday parties
'Tis the season to eat, drink and be merry. That means offices, restaurants, and homes will be throwing holiday parties that serve lots of merriment. Of course, all that merriment leads to a rise in the number of drunken driving accidents and arrests.
-
Students now bullying teachers in school
The classic bully story involves a bigger, stronger, and often older student threatening to beat up a smaller, weaker student for his lunch money. But these days, you don’t have to be smaller to get bullied in school.
-
Airline fees going up in the air
Flying used to be a relatively simple process, at least financially. Once upon a time, you would pay for your ticket and never have to open up your wallet again until you reached your destination.
