I am in my mid thirties and have nothing invested for retirement. Is it too late to start contributing for a retirement plan?

By Denise Appleby AAA
A:

It is never too late to start saving for retirement. Even starting at age 35 means you will have more than 30 years to save.

The type of IRA you choose is usually determined by your individual circumstances and preferences. A Roth IRA is usually preferred by individuals who do not qualify for tax deductions associated with Traditional IRA contributions and/or by individuals who want their IRA distributions to be tax and penalty free. (Distributions from a Roth IRA are tax and penalty free if certain requirements are met.)

Individuals, who are eligible to receive a tax deduction for Traditional IRA contributions may prefer to take the deduction now and realize the benefits up front as opposed to later on.

For the 2007 tax year, you may contribute up to $4,000 to either a Traditional or Roth IRA. Alternately, you may split the $4,000 between the two. Most financial institutions will allow you to contribute small amounts periodically (weekly, monthly, etc.) until you reach your desired amount, provided the total amount does not exceed the contribution limit.

Annuities are also a good means of saving for retirement. The most appropriate choice varies among individuals because everyone's situation is different. To be sure you choose the retirement vehicle that is best for you, you should speak with a financial advisor.

To learn more about how much your savings can grow over 30 years, read Compound Your Way To Retirement.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ...
  2. Can I purchase mutual funds for my IRA?

    Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
  3. How do Social Security benefits for widows or widowers work?

    Understand the basics of survivor's benefits for spouses of deceased workers, when you can begin collecting and how your ...
  4. What are the best ways to plan for retirement?

    Learn the basic steps to creating a solid retirement plan that can support you and your family, and find out how to manage ...
RELATED TERMS
  1. Subaccount Charge

    Fees charged for the management of an investment fund.
  2. Surrender Period

    The amount of time an investor must wait until he or she can ...
  3. Annual Crediting Cap

    The maximum rate of index growth that an annuity will be credited ...
  4. Interest-Crediting Methods

    A credit method that determines how interest changes to a fixed ...
  5. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  6. Variable Annuitization

    An annuity option in which the amount of income payments received ...

You May Also Like

Related Articles
  1. You don't need to be a Gucci to afford to retire in Italy, but saving money means finding a less-traveled spot. Start by exploring these beautiful locales.
    Retirement

    The Top Places For Retiring in Italy ...

  2. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  3. Retirement

    Planning Ahead for 2015's Tax Law Changes

  4. The average retiree’s check will rise by 1.7% in 2015, the Social Security Administration says. And the ceiling on taxable earnings will rise, as well.
    Professionals

    How Social Security Will Change In 2 ...

  5. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

Trading Center