Thinking about saving for retirement? You're not? Well, you should be, no matter how young you are. To get you started, there are two basic accounts you need to look into, a 401K and an IRA. Check out the advantages of each below.
A 401K, normally set up by your employer, is one of the most common retirement savings accounts.
- Many times your employer matches a portion of your contributions.
- Contributions are tax deductible.
- Taxes do not have to be paid on the funds until after withdrawal during retirement.
- Companies sometimes contribute profit sharing percentage to the profit sharing also.
The traditional IRA allows you to deposit pre-tax funds to an account.
- Taxes don't have to be paid until you withdraw them after retirement.
- IRA funds can be invested in stocks, bonds and mutual funds. The gains from these investments are not taxed until funds are withdrawn.
For more information on both types of accounts, check out sites like Bankrate.com or check with your local bank that you bank with now.