Retirement & IRA

Starting to invest for retirement as early as possible is a brilliant strategy. The reason for this is the effect of compounding. Compunding is what happens when your interest keeps earning interest, year after year.

If you start early, the effects of compounding will be greater than if you start later in life. For example, suppose you start setting aside $1,000 a year (about $19 a week) when you're 25 years old. If you invest it succesfully in a retirement account earning 8% a year, and stop investing completely when you turn 35 - that is, you've invested for only 10 years - your total investment will have grown to nearly $169,000 by the time you turn 65 and are ready to retire.¹

OK, here's where it gets really interesting. Assuming you don't start investing the $1,000 a year at 8% until you turn 35, although you kept on investing that amount every year until you turned 65, you will end up with about $125,000. That's right: Even though you have invested $1000 a year for thirty years thereby investing three times as much money, you will end up with less.

The earlier you start investing, the more you can benefit from compounding. You need to get started as soon as possible.

Basic IRA's

Individual Retirement Accounts (IRAs) can be set up through Kensington Capital. There are a few different types of IRAs. Each has its own rules. The most common are Traditional IRAs and Roth IRAs. To learn more about which type of IRA account is best for you, and how much to contribute to your IRA account, our account executives will provide you with complete Retirement Planning. The account executives have access to professional tax advisers and a variety of IRA plans.

When choosing an IRA plan, research the one that is best for you.

¹Compound returns have an assumed rate of return, are hypothetical, and are not representative of any specific type of investment. Standard Deviation is one method of measuring risk and performance, and is presented as an approximation.