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. 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 ...
  2. What is the minimum amount of money that I can invest in a mutual fund?

    Learn about investing in mutual funds even with a smaller initial investment; there are many funds available to investors ...
  3. 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 ...
  4. What are the main benefits of a Locked-in Retirement Account (LIRA)?

    Read about the main benefits you can realize from transferring your Canadian pension funds into a Locked-in Retirement Account, ...
RELATED TERMS
  1. Surrender Period

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

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

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

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

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

    Definition of Gold IRA
Related Articles
  1. Financial worries can make employees less productive at work. As a result, the employee was no longer producing quality work and they might get fired.
    Savings

    Are Financial Worries Affecting Your ...

  2. Retirees seeking a rich cultural mix, temperate climate, low living costs, good healthcare, beaches and even skiing will find Spain an appealing option.
    Retirement

    Retiring In Spain: 5 Best Cities For ...

  3. Follow these 5 strategies and set yourself up for a sane and comfortable retirement. Starting early is best, but it's never too late to help your future.
    Retirement

    The 5 Top Rules Of Thumb For Retirement ...

  4. If that's always been your dream, there actually are affordable ways to retire in France. Some regions to explore and some cautions to keep in mind.
    Retirement

    Can You Afford To Retire In France?

  5. Here's how to incorporate life insurance into a plan to ensure that you and your family have the smoothest possible transition into retirement.
    Retirement

    The Smart Way To Use Life Insurance ...

Trading Center