It can seem like an instance of overstating the obvious to make this assertion but it is extremely important to save for retirement. The reason why we see fit to emphasize this is because statistics show that far too many people have made no advance preparations.
The baby boomer generation is reaching retirement age, and this is resulting in some 10,000 applications for Social Security being filed every day. This is a statistic that gets your attention, but the icing on the cake is the fact that this number of applications is expected to continue for a couple of decades.
And unfortunately, a high percentage of these individuals may have to continue working even after they reach retirement age as defined by the Social Security Administration due to a lack of financial resources.
One way that you can put something away for the future is by making contributions into an individual retirement account. Most people use either a Roth IRA or a traditional IRA and the difference for the most part lies in the tax implications.
With a Roth IRA you make deposits with after-tax earnings and when you make withdrawals eventually they are not taxed. Contributions into a traditional IRA are made with pre-tax earnings and they are subject to taxation when you withdraw money.
The best choice is going to vary depending on your financial position. Some people can expect to be in a higher tax bracket later on, and others are in the reverse situation.
The optimal way to proceed as you look forward to the future is to work within an intelligently conceived long-term framework. If you don’t know where to begin the most efficient first step would be to sit down and discuss a cogent retirement plan with a Hartford financial planning lawyer.