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. Should I purchase a master limited partnership (MLP) in my retirement account?

    Learn why investors may have to pay taxes on dividends from master limited partnerships, or MLPs, held in individual retirement ...
  2. What are the tax implications of owning a master limited partnership (MLP)?

    Learn about the tax benefits of owning units in a master limited partnership, and understand how distributions are treated ...
  3. How should I invest the money I keep on my IRA?

    For individuals who are just starting to save, certificates of deposit can be a good place to start, but the interest rates ...
  4. Why choosing the right investment adviser is crucial for your portfolio's health

    Absolutely! Just as finding a good mechanic will help keep your car running smoothly, finding a good broker or financial ...
RELATED TERMS
  1. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  2. Contingent Annuitant

    Someone designated by an annuitant to receive the annuitant’s ...
  3. Living and Death Benefit Riders

    Living and death benefit riders are a descriptive class of contractual ...
  4. Annuity

    A financial product that pays out a fixed stream of payments ...
  5. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  6. Next Generation Fixed Income (NGFI) Manager

    A Next Generation Fixed Income (NGFI) manager is a fixed income ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    This Gold ETF is Fine for Traders, Not ...

  2. Mutual Funds & ETFs

    Should GE Be Part of Your Portfolio?

  3. Retirement

    Equity Vs. Salary: What You Need To ...

  4. Retirement

    Top 10 Stocks for Retirement Portfolios

  5. Trading Strategies

    Top 7 Roth IRA Stocks for 2015

Trading Center