1 minute reading time (268 words)

Financial Literacy #4: How to Build Your Nest Egg

Jar of savings

During your income-earning years, maximize your retirement plan contributions to build your nest egg and retirement savings:

401(k)

A 401(k) plan is a retirement savings plan sponsored by your employer, which allows you to save and invest part of your paycheck before taxes are taken out. Many employers offer an employer match, usually ranging dollar for dollar anywhere from 2-5% of your salary deferral (depending on the plan). If you elect not to participate, you essentially leave money on the table.

IRA

IRAs (Individual Retirement Accounts) are a way to save for retirement. Traditional IRAs are funded with pre-tax contributions and grow tax-deferred until you reach age 70 1/2, when the IRS requires you to begin distributing the assets. When you retire and draw on the funds, the money is taxable as ordinary income.

Roth IRA

Roth accounts are funded with after-tax contributions and act like special savings accounts. Unlike 401(k) plans and traditional IRAs, there are no required distributions from Roth IRAs, and any distributions after age 59 1/2 or a minimum of 5 years are 100% tax-free.


Regularly contributing to your retirement accounts is a great way to grow your investments for retirement. The more you contribute, the more your assets can compound over time and you should strongly consider maxing out your contributions, especially if they are eligible for an employer match.

Learn more about IRA vs 401(k) and the difference between a Traditional IRA and a Roth IRA. A financial planner can help you navigate these different plans and identify the right strategy for your income-earning years. Next, we’ll look at non-retirement investing options.

Financial Literacy #5: Non-Retirement Investment S...
Financial Literacy #3: Becoming Debt Free
 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Thursday, 06 August 2020

By accepting you will be accessing a service provided by a third-party external to https://www.attentiveinv.com/

Due to renewed State orders for shelter-in-place we will be modifying our office operations. We will be suspending services at our physical office for the public. However, we are available to you via web meeting (zoom), email and telephone (Phone lines have been forwarded to our personal cell phones) during regular business hours. We will be able to fully service all your investment needs with no interruption.

You may drop contribution checks at our office through the mail slot or they may be mailed directly to TD Ameritrade (address listed below). Please be sure to notate your account number on the check.

TD Ameritrade
PO BOX 650567
Dallas, TX 75265-0567

Rest assured that we will continue to monitor your investments and market conditions on an ongoing basis with no interruption. Should you have any questions or concerns please feel free to contact us.

We will navigate this crisis as best we can, coming together and making shared sacrifices. We hope that we can help to slow down the effect of this virus together and solve this swiftly. We also wish everyone well and would like to extend our gratitude for your patience during these trying times. Continue to watch for updates from us.