Episode 19: Retirement Accounts

KEY TAKEAWAYS:

  • Starting a retirement account can seem daunting, but rest assured, Lisa will help you understand the basics.
  • Most retirement accounts are started by an employer based contribution – a company chosen by your employer – and you contribute a percentage of your paycheck to the account.
  • Some employers will match your contribution percentage – which is like free money.
  • IRA (Individual Retirement Account) is one of the most popular accounts, and it is a simple retirement account that you contribute money into before taxes.
    • Always call customer support to learn the options that the IRA is held through.
  • Roth IRA is similar to a regular IRA but the amount you contribute is taxed individually as you contribute, whereas the IRA will be taxed as a lump sum when you take out your retirement.
  • While IRA and Roth IRA’s can be opened with your employer, you do not need an employer to open an account, and can contribute from your own accounts as you wish.
  • 401K accounts are retirement funds that must be set up by an employer, and your paycheck from that employer contributes to the account.
  • To get started, talk with your employer’s HR department to learn what they offer and the company they use.
  • Follow up with the retirement company to learn more before making the decision on which account you need/want.
  • Experts say we should contribute 15% of our paychecks into retirement – but that is a lot! Start small, maybe the minimum to qualify for employer match, and increase over time.
  • Some account companies have the option to increase your contribution annually by 1% automatically so that you eventually reach that 15%, but over time so that your budget has time to catch up.
  • There are plenty of other account types, but everything depends on your comfort level with investing. It pays to educate yourself, but these basic types are agreat place to start – it’s never too soon to start saving!
  • GHS is always here for you! Stop in to a branch or call us if you need us at (800) 732-4447.