Millennials
can benefit from investing in a Roth IRA, to which you can contribute
a maximum of $5,500 for the year 2014. Normally, the limit rises
every two years to take into account the rate of inflation and the
greater cost of living.
Using
a Roth IRA to save for retirement is advisable because the
contributions grow at a rate that is not subject to tax. In addition,
when you begin to withdraw funds from your Roth IRA during your
retirement, you will not be required to pay any taxes on the amount
withdrawn. That is because you will have previously paid taxes on
your contributions during the years when you were working. Another
reason to choose a Roth IRA is that you can withdraw the amounts you
contributed without being penalized.
It
is also recommended that Millennials contribute to a 401(k) plan or a
403(b) plan if you are employed by a tax-exempt organization. If your
employer matches a portion of your contributions, you can benefit by
contributing a sufficient amount to receive the match.
To speak with an experienced Virginia elder law and estate planning attorney, call 757-399-7506 or visit www.hooklawcenter.com.
