|
 |
Home >> Accounts >> Retirement Accounts
Best Account to Accrue a 'Ton of Money'
I'm eighteen years old and would like to get some type of account that will accumulate compound interest so that when I'm sixty-five, it will have accumulated a ton of money. What is a good interest rate and what type of account am I looking will do this?
|
|
 If your goal is to accumulate funds you can use for retirement, you should investigate a 401(k) plan if it's available from your employer, or look into Individual Retirement Accounts (IRAs) or Roth IRAs. The IRA plans can be opened at many banks and brokerage businesses. The 401(k) and IRA plans have the advantage under current tax laws of allowing you to set aside income for retirement on a pre-tax basis, and defer any taxation on those funds and any income on them, until retirement, when payments to you from the plan would be taxable at presumably lower rates.
The Roth IRA invests funds that have already been taxed, and defers any taxation on account earnings, so they aren't taxed when you receive payments from the account in retirement.
IRA funds can be invested in a wide range of assets, including bank accounts and money market or mutual funds. Rates vary widely based on the type of investment. Shop around once you have determined the type of account you'd like to open. It's quite unusual for someone of your age to be thinking ahead toward retirement, and regardless of how you decide to invest those funds, the sooner you begin to save for retirement, the larger the sum you will amass.
Published on BankingQuestions.com 10/27/09
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
