To login from your mobile device, please use our mobile app. More information can be found here.

Available on the APP Store
Get it on Google Play

Money Talks: Ben Franklin

Money Talks: Ben Franklin
A penny saved is a penny earned. Ben Franklin Mr. Franklin is right (and maybe that’s why he’s on the $100 bill!) Retirement may seem like it’s an entire lifetime away, especially if you’re just beginning your career, but saving for retirement cannot start early enough. For many, retirement is the single largest savings goal that you will ever work towards. That may seem like a daunting task, but just like with any other goal, the first step is to just get started. In this case, getting started could mean setting yourself up with an IRA or a 401(k). An IRA is a savings account with tax advantages that individuals can open to save and invest in the long term.
  • IRAs are retirement savings accounts with tax advantages.
  • Types include: traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs.
  • You can’t usually withdraw any of the money without a tax penalty until you are 59½.
  • There are annual income limitations for deducting contributions to traditional IRAs and for contributing to Roth IRAs.
  • IRAs are meant to be long-term retirement savings accounts. If you take money out early, you defeat that purpose by diminishing your retirement assets.
A 401(k) is a retirement savings account that allows an employee to divert a portion of their salary into long-term investments. The employer may match the employee’s contribution up to a limit.
  • A 401(k) is a qualified retirement plan, which means it is eligible for special tax benefits.
  • You can invest a portion of your salary, up to an annual limit.
  • Your employer may or may not match some part of your contribution.
  • The money will be invested for your retirement, usually in your choice of a variety of mutual funds.
  • You can’t usually withdraw any of the money without a tax penalty until you are 59½.
Both an IRA and a 401(k) are great options for your savings retirement goals, but a key difference is that a 401(k) is an employer-sponsored plan with its own set of rules. A traditional IRA, however, is an account that the owner establishes without an employer’s involvement. Whether a 401(k) or an IRA is better for an individual depends entirely on the individuals needs and current situation so you should do your research and find a trusted resource to help you decide. If you’re interested in opening an IRA, a First United Banker can help you select the IRA that’s right for you and your family, choose investment options that meet your goals, and manage the retirement plan distributions after your retirement. To learn more about our IRA options, visit our IRA page, or give us a call at (877) 382-7827 (FUB-STAR).