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They werent developed until the late 1970s, and I didnt have access to them until the 1980s.
Instead, I was putting money away into apersonal savings account.
I hoped it would supplement what I would receive from Social Security.
Frank continued, The problem was that I didnt really have a plan.
I didnt know how much I was going to need; I was just blindly putting money away.
Things are a lot different today.
I talk to my son and he has a retirement number.
Having a plan is one of themost important thingsyou can do for your retirement.
However, I wish I had understood their power much sooner.
When I make distributions, a significant amount is taken away for taxes.
This was something that I didnt take into consideration when Roth accounts became available.
Traditional retirement accountsare a great way to save for retirement, but they require some additional planning.
When you make contributions, it helps lower your taxable income in the year the contributions are made.
However, you must then pay taxes on the earnings when theyre withdrawn.
Roth accounts help change the tax liability in retirement.
Worked Longer
When I retired, I was ready to call it quits, said Frank.
I had been working for the past 40 years, and I was tired.
While its not making me pinch pennies, that extra income every month would be nice.
Workers can start collecting their Social Security benefits when they reach 62.
However, their benefit amount will be reduced.
By holding off three more years past your full retirement age, you could collect an additional 24%.
Understanding the math before you retire can help you make thebest financial decision.
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