Americans who are just entering the workforce or who may still be early into their career often look to options like a 401(k) in order to save for retirement. However, options for retirement through Roth IRAs have become a popular choice as well over the past years and has led to numerous men and women researching and investing in individual retirement accounts.
Many people see the benefits to planning for their retirement, which obviously is an incredibly wise decision to make. However, younger individuals tend to think short-term and will likely not consider investments like Roth IRAs as something to be considered at the present time. Yet, there are more people who, in the wake of the recession and present job market, are beginning to plan for a worst-case scenario if they were to be unemployed later in life.
Numerous individuals who were hurt by the wave of unemployment that hit our nation, and still remains a problem, were those who may have been late into their career or even near the age of retirement. However, certain Roth IRAs can allow security for most people who begin this investment early and contribute throughout their career.
While there are caps on the amount one can invest into an IRA, which at the present time stands at $5,000 a year maximum for anyone under 50 years of age, the money earned in a Roth IRA is tax-free when used after age 59 and a half.
Understandably, many young men and women are either not considering retirement at the present time or feel they have plenty of time to save. Yet, there are numerous proponents of Roth IRAs who are quick to point out that, even if other forms of retirement investing are available, like a 401(k) from an employer, options like IRAs can be very lucrative in the long-run.
Awareness over planning for the future may be one of the few benefits that came from the recession as more young men and women early in their career see that a job isn’t guaranteed and, as evidenced by numerous people being laid off after decades at a job, the need for security from a retirement fund can come at any time.
While there are various types of investments that can be made within a Roth IRA account, and it will depend on one’s age, job, and financial situation as to the best type of investments are best, more and more financial advisers are urging young men and women to consider options like Roth IRAs for financial security when it comes time to retire.