It's Never Too Early to Start Saving for Retirement.


When you're young, retirement seems like it's an eternity away. But the fact is, it's never too early to start saving for it. Costs of living are constantly increasing and people are living longer, which means more money may be needed to give you a happy and stress-free retirement. Putting money into a standard savings account isn't going to provide you with the growth you may need, so let's look at some options that may get you on the road to a solid retirement account.


This is a retirement plan that you would access through your job, because it has to be sponsored by an employer. These accounts let you invest money pre-tax, lowering your taxable income, while setting money aside for retirement. You pay taxes on money taken from the account at the time of withdrawal. In many cases, employers that offer 401(k) plans also offer some level of investment matching, which can help build your account. For 2017, the maximum contribution allowed by the IRS is $18,000 for individuals.

Roth IRA

In this form of individual investment account (IRA), you invest post-tax dollars, and future withdrawals are tax-free. There are, however, income requirements to enjoy the tax benefits offered on this account, so if you earn too much, you won't be able to invest in a Roth IRA. Also, if you're single, your income needs to be under a certain amount; the same holds true for married couples. The IRS has determined that the maximum contribution you can make into a Roth IRA is $5,500 a year ($6,500 if you're age 50 or older).

Traditional IRA

Similar to a Roth IRA, there are income limits depending on your marital status and the maximum contribution are also the same. But unlike a Roth IRA, a Traditional IRA's withdrawals are taxed. To offset taxes being paid at the time of withdrawal, if your income falls under certain thresholds, you can deduct contributions on your tax return.


If you have the means, and the patience, investing in rental properties can be another way to help fund your retirement. There are a host of benefits to owning a second (or third, or fourth) property in addition to the home you live in, including:

  • Tax benefits

  • Additional income

  • In many cases, an increase in rent prices and property values over time

The challenges can range from property upkeep to tenants who don't pay the rent. But, if you do your homework on both the property and those you choose to rent your property, you can help to mitigate some of those risks.

These are just a few of the more traditional ways to save for retirement. One of the biggest things most financial planners will tell you is that you should consider diversifying. It's the old "not putting all your eggs in one basket." But if you start early, have a plan, and continuously adjust that plan as your life and income changes, you can pave the way to a financially stable retirement.


The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or tax advice. Each person's situation is unique and may materially differ from the information provided herein.  You should seek the advice of a financial professional, tax consultant and/or legal counsel to address your specific needs before any financial or other commitments regarding the issues related to your situation are made.  Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.