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Most retirement accounts start late

Staff writer

Banks in Marion and Hillsboro frequently don’t see people interested in saving for retirement unless they are on the cusp of retiring.

“What you’ll notice often times is, when people tend to hit 60 years of age, all of a sudden retirement becomes more real and more in the forefront of your mind,” Tampa State Bank vice president Kevin Fruechting said. “So people start thinking more about it and thinking, ‘Am I set up for it, am I ready for it emotionally, physically, and financially?’”

Elizabeth Wine at Great Plains Federal Credit Union in Hillsboro saw more people open individual retirement accounts for reasons besides retirement.

“A lot of the ones we’ve done recently have left unemployment and roll their funds into something else because they can’t roll them into a new employer for whatever reason,” Wine said.

Not many look into setting up accounts before their 50s, let alone before their 30s, “which is the age they really should be considering that,” she said.

“The earlier you start, the more you save,” Wine said. “It just doesn’t concern them. They’re not thinking for the future and they don’t need to worry about that now. They have that paycheck to spend on different things like housing, or taking somebody out on dates… They’re more on the ‘now’ than the future.”

Some jobs — mostly involving government and railroads — offer retirement benefits that can support people retiring in their 50s. Other employers offer 401k or other retirement plans, such as one offered by a company that recently hired Fruechting’s 28-year-old son.

“I told him, get started with whatever minimal amount to get the account open,” Fruechting said. “Way too many people wait too long.”

Fruechting and Wine agreed that starting a retirement fund at the start of a career was a good idea.

“Putting in payments on a monthly basis makes a big difference in the long run,” Fruechting said.

A Roth individual retirement account allows tax-free withdrawals under certain conditions, so money can be moved without much punishment. It is more popular with younger people.

“A Roth IRA is more advantageous the younger you are,” Fruechting said. “If you’re a younger person and have years of being able to save and earn interest or a return on it, the more beneficial it is to have the Roth IRA.”

Wine has seen people manage Roth as well as traditional IRAs, as well as a large range of deposits into retirement accounts — whether it’s $100 a month or the maximum yearly limit in one transaction.

Last modified Feb. 10, 2022

 

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