How to Save for Retirement with a Personal Checking Account
Even if you have just entered the workforce, you don’t need a large income to start saving for retirement. In fact, at CCCU, the minimum opening balance and average daily balance needed to maintain an IRA account is only $100.00. Transferring as little as $20 a month from your personal checking account to a retirement savings account, such as an IRA or 401(k), can add up faster than you think.
Start Saving for Retirement with Your Personal Checking Account in Henderson
401(k) Matching Funds
Whether it’s 20%, 30%, 50% or more, if your employer offers matching 401(k) funds, take them. A dollar-for-dollar 401(k) match will double your money and rapidly grow your retirement account.
Even if you already have a 401(k) through your employer, opening an additional individual retirement account (IRA) can help you save even more for the future. One advantage of a traditional IRA is contributions are tax-deductible up to certain limits, so it can reduce your annual tax liability. The investment earnings in your IRA can grow without being taxed until you make withdrawals during retirement.
A Roth IRA is a retirement account funded with after-tax contributions, which means you can’t deduct contributions on your income taxes. However, Roth distributions are tax-free as long as you follow certain rules. Although you can withdraw your contributions at any time with no penalty or tax due, you cannot tap into your earnings on those contributions. If you anticipate your income tax bracket will be higher during retirement, a Roth IRA may work well for you.
Roth IRAs are good for young workers with lower incomes who won’t miss the immediate tax deduction; these accounts allow for many years of tax-free, compounded growth. Unlike traditional IRAs, Roth IRAs do not have required minimum distributions. When you retire, you can leave these funds untouched if you don’t need them or transfer them to a personal checking account in Henderson for easy access.
With IRA certificates, you get the best of both worlds – the tax benefits of an IRA and the security of a certificate of deposit. IRA certificates at CCCU offer reliable and competitive fixed rates and can significantly supplement your retirement savings efforts.
The experienced financial consultants at CCCU can help you determine which type of retirement savings account will best meet your needs and financial goals. To learn more about saving for your retirement and the benefits of having a personal checking account, contact us at 702-228-2228 today!