The following is a guest post
You are never too young to think about retirement investments. The reasoning behind this lies in the power of compound interest. As an example, this article explains how putting off retirement savings by just 10 years can cost you over half-million dollars until 65.
There are countless ways to build your retirement portfolio, depending on your income, lifestyle, the appetite for risk and resilience in saving money. Our top recommendations include:
- opening an IRA next to your 401(k),
- contact a broker and invest in stock market,
- don’t ignore the cryptocurrency market,
- automate savings,
- don’t forget about catch-up contributions if you are over 50.
The importance of the IRA
Even if your employer generously offers a 401(k) which, by all means, you should take and match the contribution, consider also getting an IRA. Choose between the two available flavors. The first option is the traditional, tax-deductible IRA, which also grows tax-deferred until withdrawal. The Roth IRA consists of after-tax money and yields tax-free withdrawals on maturity. There is a third kind, non-deductible IRA for high-earners.
The best option of the three could be the Roth IRA since the money grows tax-free. By the power of the compound interest, by the time you take them out the fund could have multiplied a couple of times.