Why should I save for retirement? Won’t I get Social Security? You'll get little, likely NO, Social Security

Individual Retirement Accounts (IRAs) Individual retirement accounts (IRAs) Type of savings account created by the government to encourage people to save for retirement Reduces income taxes Limits on when you can use IRA fund— must only use them for retirement

IRAs Two main types of IRAs: –Traditional IRAs –Roth IRAs Differ in the type of tax benefit they provide

Traditional IRA Traditional IRAs allow tax deductible contributions, and all earnings are tax deferred –Tax deductible—you can deduct from your taxable income and pay no federal tax on that amount –Tax deferred—the account’s earnings are not taxed until they are withdrawn after retirement

Roth IRA Roth IRA contributions are not tax deductible, but the earnings from an eligible account are never taxed, even after withdrawal

Employer-Sponsored Retirement Plans Employer-sponsored retirement plans are set up by the employer, employer usually makes some contributions to the plan on your behalf

Employer-Sponsored Retirement Plans 401(k) plans— employees make contributions into their own accounts, featuring a range of investment options –Not owned by the company Nonprofit and charitable insti- tutions can offer employees a similar type of plan, called a 403(b)