How to Open a Retirement Fund
There's no better time than during these tough financial times to seriously think about your future and consider opening a retirement fund. You may have the opportunity for a retirement plan through your employer, typically found in your benefits package. An example is the 401(k) plan that allows workers to save for retirement by having a portion of their paycheck transferred directly into the retirement fund. If you don't have this option you can start an Individual Retirement Account (IRA). The following step-by-step article will help you with the process of opening an IRA.
Other People Are Reading
Instructions
-
-
1
Research retirement plans before you start one. The bank investor will be throwing around several terms and budget scenarios that you should be prepared to discuss. Keep in mind that the most you can contribute to an IRA is $5,000 for tax year 2009, or up to 100 percent of earned income, whichever is smaller. If you are over 50 you can contribute an extra $1,000.
-
2
Learn what budget plan would most likely work best for you. It would be a good idea to have your budget organized so you know how much you can fit into your retirement plan. The Money section of CNN.com has great tips and articles that are worth reading before opening a retirement fund (see Resources).
-
-
3
Go to a bank or investment firm and ask to open an IRA.
-
4
Choose between a Traditional IRA and a Roth IRA. According to Lisa Anderson's article, "How to Start a Retirement Fund" (see References), a traditional IRA will immediately provide you with a tax break; a Roth IRA will give a tax break when funds are withdrawn at retirement.
-
5
Complete the process of opening your retirement fund with your investor. Develop a relationship with the investor who helped you open your fund, and never be afraid to ask any questions. For example, if not told, you'll want to make sure to ask whether the retirement fund will be high or low risk and if it's protected.
-
1
Tips & Warnings
Start saving low at first and then gradually increase how much you put into your fund. An IRA can be set up like a 401(k), where you have funds deducted from your paychecks and transferred into your retirement fund. It may be most helpful for organizing your funds if you set up an IRA at the same bank you currently use for checking and savings accounts.
