It is never too early to start planning for retirement. The sooner you start, the more prepared you will be when it happens. There are many things that you can do to prepare for retirement; you could invest in a house and speak to a financial planner to work out how much money you might need. However, one of the best things you can do is to start contributing to a retirement account.
You may be part of an employer-sponsored retirement account if your place of work offers them. These are great because they take your contribution straight from your wage so that you don’t have to worry about paying it. Many employers will also match your contribution so you will have more money when it comes to retirement.
You can also get an individual retirement account (IRA). An IRA allows you to save money for your retirement but with a tax-advantage. The tax-advantage differs depending on the type of account that you choose. They are easy to set up, as you can do it online or in-person at your local bank and at many other financial service providers.
There are two different types of IRA. They are called Roth IRA and Traditional IRA. They offer various benefits that will suit different people in different situations, making it essential that you choose the one that will be best for you. The infographic below sets out the differences between Roth and Traditional IRAs in an easy to read manner, to help you make the right decision.
Infographic Design By Accuplan