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One of the most important objectives for proper financial planning is to secure an enjoyable retirement. After years of hard work, raising a family, watching your children become independent, wouldn't it be nice to relax and reward yourself? Plan ahead today and make the right investments. By the time you retire, you will have peace of mind to catch up on all the things you've wanted to do over the years.
Firstrade is committed to helping our clients achieve a secure financial future. Our No-Fee IRA accounts cost nothing to setup, so you can start your Firstrade IRA account whenever you're ready, with any amount you wish. We offer a wide variety of products that combine growth and stability, such as Bonds, CDs, and Mutual Funds, ideal for long term investing. Start an IRA account with Firstrade today, and invest toward a comfortable retirement!
The Importance of Retirement Planning
A comfortable retirement is a major financial goal for most individuals and careful financial planning can help achieve that goal. Many experts estimate that you will need about 70-75% of your pre-retirement income to maintain the same standard of living after you retire.
The key to successful retirement planning is to start early! If you're stepping into your first job, and don't think your current salary is enough to make a difference when you retire. Think again! If you are 20 years old and start putting $500 into your retirement account each year, earning a hypothetical 10% annually for the next 40 years, your account will be valued at $221,296.28 when you retire at age 60. Considering the fact you've only deposited $20,000 into the account over this time, you end up with an overall rate of return over 1,000% due to compounding. No wonder this was referred to as the "eighth wonder of the world" by Albert Einstein.
To better illustrate the power of compounding, take a look at another example:
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Steve begins saving $2,000 a year in IRA at age 20 but stops at age 30. Bill waits until he is 30 years old to start saving $2,000 a year and continues his program until he is ready to retire at age 65. Although each investment earns the same hypothetical 10% a year, at age 65 Steve will have over $1 million while Bill will only have just over $600,000.
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10 years of savings beating 35 years of savings, that is the power of compounding.
Worried that you have yet to start a program of regular investing? The point of this example is to illustrate how much more your investment can accumulate with time as an ally. In other words, the dollar you invest today is the one that will work the hardest for you. The key is to start your retirement planning today.
How do you start to build for a comfortable retirement?
One way to start is to open an Individual Retirement Account (IRA). An IRA is an investment vehicle created by the US government, offering tax deferred or tax exempt earnings power for working individuals to save for their retirement. Depending on which type of IRA you choose, your income level and whether you participate in an employer sponsored retirement plan such as 401K, you may deduct all or part of your contribution from your taxable income.
Firstrade is ready to help you build a strong and secure financial future. Sign up for a retirement account at Firstrade today!
*This information should not be construed as providing tax or legal advice. Please consult with your tax advisor or attorney regarding your individual situation.
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