The year is halfway over. Have you met your savings goals so far this year? Are you behind on your savings for retirement? It’s easy to get behind on savings, especially when it comes to retirement, which may be years or decades in the future. After all, you probably have many other expenses and financial challenges that seem more urgent.
Fortunately, there’s still plenty of time left in the year to put away money for retirement. You may want to use qualified accounts to do so. These accounts, which include 401(k) plans and individual retirement accounts (IRAs), allow you to grow your funds on a tax-deferred basis. That means you don’t pay taxes on growth while the assets are inside the account.
Below are three commonly used qualified accounts and how they can help you save for retirement. You still have time left this year to ramp up your savings. Work with a financial professional to implement a savings strategy.
Are you self-employed? If so, you may be living your dream. You set your schedule, run your business the way you like and answer to yourself. You may even get to earn income doing what you love. While self-employment can be challenging, it can also be greatly fulfilling.
Self-employment can present unique challenges, however, especially when it comes to retirement planning. While traditional employees can participate in their employer’s 401(k) plan or pension, self-employed individuals have to do it on their own. That can be a significant burden.
Since you work for yourself, you may believe that you can delay retirement as long as possible. However, that assumption may be incorrect. There’s always the risk that you could be forced into retirement at some point because of illness or injury. Or you may simply decide you want to pursue other activities. Should that time arrive, you’ll be far more prepared if you have a plan in place.
Individual retirement accounts, also known as IRAs, are popular vehicles used to save for retirement. According to a 2013 study from the Employee Benefit Research Institute, Americans own a collective 25 million individual retirement accounts. Those IRAs hold nearly $2.5 trillion in assets.1
There are many different types of IRAs, and each type has its own set of unique benefits. It’s not always easy to know which type of IRA is best for your needs and goals.