Important decisions in planning retirement income and expenses can be made at seven ages, and the decisions made at those ages can have a substantial effect on the quality of retirement.
Needless to say, perhaps, the age to start saving for retirement is as soon as you have an income. One of the best and earliest techniques for retirement saving occurs when young people have summer jobs. They are likely to have no significant tax liability from those jobs, so it is an ideal occasion to open a Roth IRA. There is no income tax deduction for contributions to a Roth IRA, so a year when an individual has little or no taxable income is an ideal time to make such contributions. The other side of the Roth IRA bargain is that, provided you wait a while to take distributions, the amounts withdrawn are free of federal income tax, and there is no date by which distributions from the Roth IRA must be made to the person who set it up. This is in contrast to the rule for traditional IRAs and qualified plans, requiring that distributions begin shortly after age 70-and-a-half and continue each year thereafter. The ability to postpone distributions from Roth IRAs for an indefinite period is a valuable attribute. In general, as soon as there is a vehicle available for retirement saving, make use of it.
