A Smithtown elder law attorney can offer help with making your retirement plan. It is important not to wait until late in your career to begin working with a retirement planning lawyer. Waiting will make it much harder for you to accomplish your retirement planning goals. You will also lose out on the opportunity to take advantage of tax breaks which are available each year during the course of your career.
Eghrari Wealth Training Law Firm helps you to make smart choices regarding your retirement investing. We work with people of all ages, including young people who want to ensure that they are on the right path to retirement so they can be financially secure when they are ready to leave the workforce. To find out more about how our legal team can assist you with all of your retirement planning needs, give us a call today.
Can Young People Invest in an IRA?
When you are making your retirement plans, you may wonder whether you can or should invest in an IRA if you are young and just starting out your career. The answer is that young people definitely should invest in IRAs as long as they are eligible to do so.
Most young people are eligible to make annual investments in an IRA. If your income is high and you have a spouse with a workplace retirement plan, or if your income is high and you have a retirement plan at work, you may lose the ability to make tax-deductible IRA investments. However, most young people do not meet the income threshold that would price them out of being able to invest in an IRA. In fact, one of the key reasons why you may wish to invest in an IRA when you are young is that your income will likely increase over the course of your career and the chances are greater that you’ll lose your IRA tax deduction later on in your career when you are making more.
Investing in an IRA when you’re young is a good idea because you’re allowed to invest only a set maximum each year in an IRA and take the tax deduction. As of 2017, the maximum you can invest is $5,500. Each year that you don’t invest in an IRA, you lose the opportunity to take this tax deduction. You cannot make up for it by investing more later, since you don’t get to carry the tax deduction over from the years that you miss.
Maximizing your tax benefits for retirement investing is just one of many reasons why you should start making an investment in an IRA when you are young. Another big reason to invest in an IRA early on in your career is because you can benefit more from compound interest if you invest for a longer period of time. This means that it is possible for you to save a smaller amount each month, but still end up with more money in the end than you would have if you had invested more later. As you earn interest on your investments, the interest earns interest so your money is making you money – this is why compound interest is so powerful.
This Motley Fool article illustrates why it makes a lot of sense to begin investing in an IRA when you are as young as possible. If you start investing in an IRA when you’re 25, you need to save $442.37 per month during the course of your whole career if you want to have $1 million by the age of 65, which is the average retirement age. But, if you wait until you are 45 to invest, you would need to save more than $2,321 monthly to retire at 63 with $1 million. It is much easier to begin investing early and saving a small amount each month than to try to invest a substantial sum every single month when you are older.
Getting Help from A Smithtown Elder Law Attorney
A Smithtown elder law attorney can offer you personalized one-on-one help as you consider the different kinds of tax-advantaged retirement accounts you may be eligible to invest in. We can also assist you in setting savings goals and taking steps to make certain that your assets are protected.
To find out more about the ways in which our legal team can assist you, join us for a free seminar. You can also give us a call at (631) 265-0599 or contact us online at any time to talk with an experienced member of our legal team.
- What Happens during a Will Contest? - August 17, 2022
- How a Trust Can Help You Make Gifts to Grandchildren - August 10, 2022
- Are You Passing Down Your Legacy in Your Estate Plan? - August 3, 2022