MYRTLE BEACH, SC (WBTW) – Baxter Hahn with Wells Fargo Advisers in Florence joined News13 NOW at 9 a.m. on Wednesday to talk about being sure you don’t run out of money during retirement.
The biggest difference most people can make in accumulating retirement savings is putting away money early. Watch the video to get a visual explanation of how someone who starts saving early can take advantage of compounding interest. Even people who saving money early and later stop putting money away, often fare better than people who wait until after age 40 and continue to contribute to savings until retirement.
Individual retirement accounts (IRA) can be a helpful tool in saving money outside of a work-related savings such as a 401k.
- Traditional IRA
- Offers tax-deferred growth
potential.
- You pay no taxes until you take a
distribution.
- Depending on your income, your
contribution may be tax-deductible.
- Roth IRA
- Offers tax-free growth potential.
- Earning are distributed tax-free, if certain
conditions are met.
- Contributions are not tax deductible,
regardless of income.
Once in retirement, a basic way to not run out of money is to watch your spending.
- Don’t spend too early. Create a limit of how much to withdraw.
- Don’t rush to pay off your house. Low-interest debt isn’t terrible, and there are tax advantages to having a mortgage.
- Don’t overspend on your adult children.