The Finhabits app makes investing in your future an easy habit. Put your money to grow over time while you save – it’s all automated, and in just 10 minutes, you can open Roth or Traditional IRAs as well as regular investment accounts. It’s that simple.
With the holidays quickly approaching, it’s difficult to think about anything other than shopping for gifts, eating like crazy, and finishing off the work year. But as 2017 comes to an end, we also begin to reminisce on what we accomplished and what we hope to achieve come 2018. While it’s important to envision what we want for the future, it’s equally as important to set goals that will allow us to make these desires a reality. That’s why it’s the perfect time to reflect on retirement. It’s way too early, you say? Truth is, it’s never too early to start saving for retirement.
If the one thing stopping you from opening a retirement account is that you don’t even know where to start, we’re here to help. By following a few simple steps, you can be well on your way to retirement bliss.
The first thing you need to do is set up a realistic budget of how much you can save for your retirement fund every month. Some people can put aside $20 and others $200. The initial amount doesn’t matter as long as you get started and do it on a recurring basis. To map out your monthly expenses consider things like rent, transportation, and food, and determine exactly what amount you can contribute. We understand that you have bills to pay, but every dollar counts in the long run. Once you’ve come up with the magic number, the next step is to begin saving your dough.
Next, you’ll need to select a type of retirement account that works for you. Two of the most common options for future retirees are Traditional Individual Retirement Accounts (Traditional IRAs) and Roth Individual Retirement Accounts (Roth IRAs). As with most things in life, there are pros and cons to both; let’s briefly discuss the biggest difference. While Traditional IRAs offer tax deductible contributions, any withdrawals during retirement are taxed at ordinary income tax rates. On the other hand, Roth IRAs provide no tax break for contributions, but withdrawals of your earnings are tax free during retirement. Sounds complicated, but think of it like ordering take-out. You can either pay over the phone when you place the order (Roth IRA) or settle-up when you pick up the food (Traditional IRA). Neither option is better than the other, so your decision will be based on your personal profile.
We know that opening an IRA may seem complicated at first, but it doesn’t have to be. At Finhabits, we’ve combined the latest technology with 14 years of financial expertise so it’s easy to get started. We want to help more people like you get into the habit of saving, and with us all it takes is $5 a week. So, this holiday season, open a retirement account and give yourself a gift that keeps on giving.
Choosing a retirement plan is a big decision, so it’s important to make sure that you’ve done all your homework. Please visit the IRS website for more information or consult your tax advisor.
