Many people often live their lives without considering how they plan to retire. People do not realize that the idea of living solely on the benefits of social security is not realistic. In order to secure a comfortable future, people must have some type of additional income. Sacrificing a small amount of money into an IRA at a relatively early age could make a considerable difference in the lives of people upon retirement. It is important to consider how much money will be needed for a comfortable retirement.
Careful planning is essential when considering an item with such importance.
With only income from Social Security and money saved in bank accounts, most people are unable to achieve this goal. Furthermore, one must also consider, for a retirement account to be effective the account has to maintain interest rates above that of inflation. In fact, at present, most savings accounts have an interest rate below four percent. Using this example, the tax deferred feature of an IRA is easily recognized as having a considerable edge over regular savings plans. Another advantage to consider when planning an IRA is to start the account as early in life as possible.