Cherry Creek Mortgage
Mortgage News 02 August 2018

Tips For Retirement

The most anxiety-inducing factor of retirement funds is the aspect of beginning to save. In honor of that, our first tip is to start as soon as possible. All of the countless times you’ve said “I’ll start tomorrow” will be regretted by you a year from today, or even a week from today. It may be a small amount, but starting to contribute as soon as possible will energize and motivate you to continue doing so.

Contributions to a 401(k) is a great way to save for retirement. Your company may offer to match your contributions, or a certain percentage of them, so we’d advise you educate yourself in your 401(k) program in order to take full advantage. You should also aim to open an Individual Retirement Account, or IRA, if you want another method of saving for retirement.

When it comes to an IRA, depending on your income level and other factors, you can choose between a Traditional IRA or a Roth IRA. In a Traditional IRA, your contributions may be tax-deductible and the investment earnings have the opportunity to grow tax-deferred until you make withdrawals during retirement. In a Roth IRA, if you meet the income eligibility requirements, you have the option to open an account and contribute to that. Roth IRA’s are funded with after-tax contributions. Once you have reached age 59 ½, qualified withdrawals, including earnings, are federal-tax-free (and may even be state-tax-free) if you’ve held the account for up to five years.

In conclusion, if you are 50+ we’d advise you take advantage of catch-up contributions. We mention to start saving to your 401(k) or IRA early, because yearly contributions are limited. Upon reaching age 50, you are eligible to make catch-up contributions where you can go beyond normal limits, essentially an opportunity to make up for lost time.

Good luck and it’s never too late!