Time can pass by in a hurry, and it can be difficult to understand this when you are still a relatively young adult. There are a lot expenses that you have to deal with on an ongoing basis, and there is often some new challenge that presents itself just when you feel as though you are turning some type of financial corner. As a result, you may keep putting retirement planning on the back burner.
As understandable as the above may be, it is up to you to make sure that you have the resources that you need to retire in comfort. Simply relying on Social Security is a recipe for disaster because Social Security is intended to be a basic safety net. Unless you are ready to live extremely frugally your benefit alone is not going to be enough to provide you with sufficient income.
Saving for retirement is a must, and a lot of people will do so by opening individual retirement accounts. The two types of individual retirement accounts that are most commonly utilized are the traditional IRA and the Roth IRA.
People often have questions about the difference between these two types of retirement accounts, and for the most part it boils down to a matter of when you want to pay taxes. If you use a traditional IRA you make deposits with pre-tax earnings, but you will have to pay income tax on withdrawals.
The Roth IRA works in the opposite fashion. You place after-tax earnings into the account, but when you tap into it no further taxation is applicable.
The right individual retirement account for you will depend on the unique nature of your financial situation. For further information, take a moment to arrange for a consultation with a good Central New Jersey retirement planning lawyer.