The one constant thing about tax season – aside from having to pay more each year – is that we are inundated with advertisements for retirement accounts. Go on any website, watch any TV show, even take the bus or train, and odds are there will be an advert for the humble individual retirement account (IRA). You can even say that tax season is really IRA season.
And that’s a good thing.
The IRA is one of the best tools we have for boosting and meeting our retirement goals. Making one $5,000 contribution could turn into $53,000 after 30 years of compounding at the market’s historical rate. So it’s important to use an IRA effectively and get the most out of the account.
Luckily, investment manager Invesco has five sound tips to do just that.
Make sure to check out our section on IRA to learn more.
1. Calculate What You Really Need
One of the biggest problems for retirement investors is that they don’t have a good sense of the amount of money they’ll need for retirement. Most people just start by socking some cash away. But that might be not enough to meet their real retirement goals. For example, most folks are blissfully unaware that they’ll need northwards of $350,000 to simply pay for medical expenses during their golden years.