Retirement planning is something that has been a major issue over the past months as not only have Roth IRA conversions been in the news, but there are concerns that some individuals are not putting enough emphasis on investing in some form of retirement account, like a Roth IRA, in the hopes of saving enough money for when they have retired. Obviously, Roth IRAs are one of the more popular Individual Retirement Accounts and overall retirement options which consumers use due to the fact that they do provide benefits later in life concerning taxes and earnings.
While Roth IRAs are not the only retirement option that can be used by an individual who is attempting to build up a nest egg, there are advisers who feel that diversifying one’s retirement funds can be greatly helpful down the road as options like a 401(k) may require an investor to pay taxes when they begin withdrawing these funds, but if an individual also has a Roth IRA, for instance, the earnings from this account can be withdrawn tax-free and it may help supplement losses from taxes in other areas.
Yet, when it comes to retirement, there are those who feel that an individual’s planning for their retirement life should come first in their personal finances. An article from the LA Times mentioned that retirement savings should be a priority and an adviser suggested that for those who are considering where retirement savings should be in terms of their finances, it was stated, “You should put retirement savings first now, even before you pay off your debt.”
Obviously, this is something that has confused some investors and individuals who are researching retirement opportunities as erasing debt seems to be one of the top priorities that many consumers face at the present time but, again, there are those who feel that having less money in an emergency fund or focusing more money on paying down debt is secondary when it comes to saving for retirement, as costs for things like health insurance are said to be on the rise and may necessitate that more individuals have a higher amount of retirement funds saved later in life.
Yet, this is not to say that individual should stop paying on debt obligations, as that could create an incredibly difficult situation in their financial life, but putting money aside toward retirement should be a high priority, according to many advisers, despite the fact that this could lower contributions toward erasing debts and build up alternative savings. However, when it comes to choosing these options, consumers must look at their personal financial situation and, even if it is a minimal contribution, may want to begin contributing to some form of retirement investment while they continue to set themselves in a better financial position at the present time. Obviously, consumers don’t want to increase present costs on debt, but more counselors are advising the consumers implement budgeting techniques that will not only allow for paying off debt but planning for retirement as well.