Now is the time to start planning for retirement | Education

Retirement may be a distant concern for high school and college students, but they might want to start thinking about it now, according to KHEAA.

The best time to start planning for retirement is when you’re young. You should research your investment options early so that the money you invest now has more time to grow and help you as you age.

Two options for members of tomorrow’s workforce are a 401(k) savings account and an Individual Retirement Account (IRA).

Many employers offer their workers a 401(k) option. With a 401(k), the employee has a percentage of their salary deducted and deposited into a tax-deferred account. Most contributions are invested in mutual funds. Some employers may fully or partially match an employee’s contribution.

IRAs come in many forms, but perhaps the most popular are the Traditional IRA and the Roth IRA. Both types are held by a custodian, usually a bank or brokerage firm. IRA contributions can be invested in stocks, bonds, certificates of deposit, and even real estate.

In a traditional IRA, contributions are made before taxes. Account holders pay taxes on the funds they withdraw. With a Roth IRA, contributions come from after-tax money, which means withdrawals are tax-free.

Keep in mind that the federal government can change the rules regarding retirement accounts at any time. You should consult with a qualified professional to ensure you choose the best plan for you.

KHEAA is a non-profit public agency established in 1966 to improve student access to university. It provides financial aid and financial literacy information at no cost to students and parents. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the FAFSA. For more information on these services, visit

In addition, KHEAA disburses Advantage Education Private Loans on behalf of its sister agency, KHESLC. For more information, visit

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