Individual Retirement Accounts
Individual Retirement Account
The next best thing to winning the lottery or growing your own money tree is a well-planned strategy for retirement. An Individual Retirement Account can be an important part of that strategy. With a little patience, and regular contributions, your IRA will grow into an account that will help provide safety and security for you and your family for years to come.
Citizens Community Credit Union offers a number of product options to fund the three different retirement account plans:
Traditional IRAs offer income tax-deferred earnings, and the possibility for income tax-deductible contributions. These tax advantages make the traditional IRA a powerful tool in creating a balanced, long-term savings plan.
Roth IRAs offer flexibility and the possibility of income tax-free distributions. Not only can they help with retirement needs, they can also help save for a first-time home purchase or other financial goals. Although it's not for everyone, the Roth IRA can give many members an easy and safe way to plan for the future.
Education IRAs can be a smart way to save for your child's education. Although contributions to an Education IRA are not income tax-deductible, your withdrawals (including earnings) are tax-free when used for tuition, books, and other qualified higher-education expenses.
Which IRAs are right for you? It's important to know all the details before you make your decision. Call or stop by one of CCCU's Locations for answers to all of your IRA questions.
How Long Will Retirement Savings Last?
by Center for Personal Finance editors from Home and Finance web version Jan 2008
We work our tails off saving for retirement, putting away as much as we can for years. It seems like we'll never get to use any of the money--and then one day we actually retire.
Now we're faced with the dilemma of how much we can spend during retirement--how long will savings actually last?
Experts suggest planning to withdraw about 4% of a nest egg each year. A million-dollar nest egg yields about $40,000 per year. With Social Security and other resources, is that enough?
Imagine what you want your retirement to look like. Money, work, health, housing, and lifestyle all will factor into your retirement. The National Endowment for Financial Education (NEFE), Greenwood Village, Colo. recommends asking yourselves these questions:
- How much money do I have for retirement?
- How much money will I need to pay bills in retirement?
- Do I want to travel?
- What's the cost of living where I plan to live?
- Will I have my mortgage paid off?
- How much should I budget for medical expenses and/or insurance?
- What debts can I pay off before retiring?
Like predicting how long you'll live, trying to anticipate inflation over the next 20, 30, or even 40 years isn't an exact science. And what may look like a hefty retirement account now may shrink substantially down the road because of inflation.
Making the Leap
Deciding if you can afford to retire is personal and the answer is different for everyone. The best strategy is to do your homework and determine how much money you need to set aside to pay for the retirement lifestyle you want. By planning and investing now, you can be on the way to building the nest egg you'll need.
*source is Home and Finance Jan 08, visit Home and Finance on CCCU's homepage for more retirement and financial information information
