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As a young adult, thinking about retirement is likely far from your radar. However, it’s crucial you work with a CPA to ensure you’re properly prepared for your golden years. Here’s what you can do now to promote financial security when you’re older.

What Young Adults Should Know About Retirement Planning

What if I’m not in a position to save for retirement right now?

Although the purpose of these savings may be far off, preparing for retirement is crucial. These are the funds you’ll rely on later in life for expenses like groceries, mortgages, and utilities.

As such, you’ll want to put away as much money as possible, whether it’s taking a portion out of each paycheck or cutting back on unnecessary expenses and allocating those funds toward your savings. For those on a tight budget, many CPAs recommend putting away around 10 to 15% of each paycheck.

What’s involved in retirement planning?

CPARetirement planning involves more than just putting away a bit of money each month. It also requires you to think about how you’d like to spend that money and devise a budget. Consider what the cost of living expenses will be, whether you’d like to travel, and if you’ll have supplementary sources of income.

Why is it important to start early?

Any money put into a retirement savings account is compound with interest. Over time, your savings will be much greater than the amount you contribute. The earlier you start, the more time you have to build savings.

What’s the difference between a traditional & Roth IRA?

Traditional IRAs are comprised of pre-tax income, which means you can deduct contributions when filing taxes. However, with this option, you’ll have to pay income tax on any distributions you might have. Roth IRAs aren’t deductible, but any gains sustained from these accounts are considered tax-exempt.

 

If you’re ready to start planning for retirement, talk to the professionals at Wilson, Rea, Beckel & Associates, CPAs, LLC, in Pagosa Springs, CO. For over 16 years, these knowledgeable professionals have worked with clients throughout the Four Corners area to get their finances in order and prepare for the future. Visit their website to learn more about their services, or call (888) 264-2281 to schedule an appointment with a CPA.

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