Most Americans have little to no money saved for retirement. A 2018 study by Northwestern Mutual, stated that 21% of Americans have no retirement savings at all and 10% have saved less than $5,000 towards retirment.  For most Americans, retirement seems like an always-distant horizon. They can see it, but they never quite have enough money to reach it. As a result, they end up working long into their 70s.

If you work for a large company, you may have a SIMPLE IRA (Savings Incentive Match Plan for Employees) or a 401(k). Even if you’re maximizing your contributions to these programs, you can still save with an IRA from APGFCU. The extra money could help you live comfortably through retirement.  All you have to do is start planning now.

Let’s take a look at some benefits of an IRA:

IRAs come in two forms: Traditional and Roth. A Traditional IRA is tax-deferred. You don’t pay taxes on the money you put into a Traditional IRA. Instead, you pay taxes on your withdrawals. If you’ll have less income after you retire, a Traditional IRA could save you money on your tax bill.

You fund a Roth IRA with post-tax assets. You invest in a Roth IRA with your post-tax salary. Then, you don’t have to pay taxes on the withdrawal. Roth IRAs make the most sense for people who expect to draw a significant post-retirement income. If you expect to have a significant pension or plan to start a profitable small business when you retire, a Roth IRA might be best for you.

IRAs offer some flexibility. Withdrawals before retirement incur a tax penalty and other fees, but the money in an IRA is accessible in the case of an emergency. You can also change the size of your contribution month-to-month. This flexibility means you can take advantage of sudden windfalls or expenses.

Take charge of your financial future, and do it now. Stop by APGFCU and speak to a representative about opening a Roth or Traditional IRA today!

Consult with a tax advisor for additional information.