First Financial Friday: IRAs
by Nancy Jones on Oct 15, 2018
On September 7, 2018 WREN hosted one of its #FirstFinancialFridays, talking about saving for retirement with Eileen Stevens of Abacus Planning Group.
The discussion answered many common questions about IRAs and 401ks and the best way to ensure that you will be able to live comfortably without working for the rest of your life.
Watch the full video here:
We are LIVE on this #FirstFinancialFriday with Eileen Stevens of Abacus Planning Group to discuss the Individual Retirement Account vs. the Roth IRA! Comment with a 💲emoji if you're watching and ask us any questions you may have! #SCWREN
Posted by Women's Rights and Empowerment Network- WREN on Friday, September 7, 2018
Some of the most important points were these:
- The only requirement for opening up an IRA is that you have an earned income: Vanguard and Betterment are both good places to begin your IRA.
- Saving for retirement is highly important for women because we live longer, meaning we spend more years in retirement. Saving for retirement ensures financial independence that gives us control over our own choices in the face of life’s obstacles and opportunities.
- The amount you put away for retirement is determined by two things: how long you want to work and what lifestyle you want in retirement. There are calculators at Betterment and Bankrate to help you determine the right amount for you.
- Do not put off opening an IRA until tomorrow. It is never too early to begin saving for retirement, and no amount is too little to save. Time is the main factor in determining how much your money will grow; it is nearly impossible to catch up later in life.
- The traditional IRA varies from a Roth IRA in the tax advantages offered. Traditional IRAs tax the money when you withdraw it for retirement; Roth IRAs tax the money when you deposit
- Roth IRAs are better for those who are in a lower tax bracket now but expect to be in a higher one later; traditional IRAs are better for those in their prime earning years who expect to take a pay cut and enter a lower tax bracket at some point in the future.
- Financial advisors for IRAs or 401ks are not necessary when you’re just starting out, although when you develop a large portfolio down the line they can be very useful.
The most important takeaway and biggest piece of advice that Eileen gave us, however, was this:
Pay Yourself First.
If you change your mindset to paying yourself a set amount first, then your bills, and then having fun with the rest of the money left over, you remove the stigma from saving. One of the best ways to do this is via direct deposit, which most employers offer: request that a specific amount be transferred directly into your retirement account from your paycheck every month, and you probably won’t even miss it.
Let us know if you found this helpful, if it inspired you to finally set up an IRA, and otherwise follow along with us on Facebook, Twitter, and Instagram.
We’re thankful to Eileen and Abacus Planning Group for talking with us today and for taking the mystery out of saving for retirement!