If you are here for a fashion post I completely understand – check back tomorrow and I got you covered. While most of my posts showcase how to look fashionable on a thrifty budget I am actually thrifty in all aspects of life. Hence, a lifestyle you can afford! For the past few years I have been telling my husband I wanted an IRA so I can start planning for retirement. However, when I asked friends/family members about it no one I knew had one and I was too lazy to research it myself. *sigh* With my job I have 401k and with the military I have TSP (Thrift Savings Plan) but let’s be honest is this really enough for retirement?
At the tender age of 31, I have witnessed people still working in their advanced age and people who cashed in their 401k for one reason or another . Being the millennial that I am, heck I have bounced around from job to job cashing in my 401K instead of rolling it over. Personally, I have received large sums of money and don’t have anything to show for it. Well, the reality is if you live to see retirement you want to be prepared. So for 2016, I dedicated an hour a month to learn about money in some capacity. I purchased Suze Orman (love her!) books from the thrift store, read CNN money weekly and even attended several seminars sponsored by my bank for free! *side note* The food is absolutely delicious at these seminars and they even have raffles!
After researching and compiling a list of questions I scheduled a meeting with a banker to discuss my options. I decided to go with a traditional IRA and guess what? It was only $5 to open an account! Five dollars? Are you serious? You can start saving for retirement with $5? I realized it’s not even about having a lot of money to save, because every bit saved compounds into larger amounts of money. That’s where the saying “A penny saved is a penny earned” comes from. Saving is crucial to creating enough wealth to live the life you want. Just because I’m earning enough money now to afford to buy nice things doesn’t mean I’ll earn it next month or next year. This whole process has taught me a lot about money and I’m excited for what’s to come in the future. Do you have an IRA? How are you planning for the future?
IRA 101: IRA stands for Individual Retirement Account, and it’s basically a savings account with big tax breaks, making it easier to put away cash for your retirement. Not everyone can take advantage of IRA it’s based on your income or employment status. Each has caps on what to can contribute each year and the penalties in most cases for withdrawing money before retirement age.
IRA vs 401k: 401K are usually provide by your company and they contribute a certain amount towards it. An IRA is strictly what you put into the account and you can have both a 401k and IRA.