What is it?
The earlier you can start to save for retirement the better, because the interest, dividends and capital gains you earn on your money are likely to compound over time for greater growth. Say you’re invested in a retirement account with an average 5% annual rate of return: After one year, $100 becomes $105. After 10 years, that same $100 is worth $162, and after 25 years, it's worth $340.
When should I start?
Saving for retirement is always a good idea. And if you put your money into investments like IRAs and 401(k)s, you can avoid paying taxes on the money until you start withdrawing it when you retire.
70.5 maximum age for making IRA and 401(k) contributions
$18,000 maximum annual amount you can put in a 401(k) ($24,000 if you're over 50)
$5,500 maximum amount you can put in an IRA each year ($6,500 if you're over 50)
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