A recent survey conducted by Fidelity Investments, 96% of Americans who are saving for retirement don’t realize the present contribution ceiling for an individual retirement account, with some guessing as low as $1,000. The fact is that for tax year 2005, IRA contribution limits go up to $4,000 from $3,000 in 2004.

Tax refunds

When it comes to knowing the facts about retirement, misperceptions can lead to missed opportunities. Contemporary workers will be confronted with increasing health care costs once they retire, likewise of declining pension benefits and a more expensive cost of living. Thus, it is important to save as early and as much as possible in tax privileged accounts similar to the IRAs.



Getting to know the facts better can help to get rid of common false beliefs that may thwart some investors away from wise investment opportunities like an IRA.





Almost one-third of Americans in their most important savings years who have not yet opened an IRA account presumes their 401(k) savings will be enough for retirement, as stated in the Retirement survey. On the other hand, Fidelity quotes about 80 percent to 100 percent of income prior to retirement will be needed by retirees in order to live sufficiently. Using an IRA now to supplement workplace programs can help investors make sure their savings will continue to grow and last throughout retirement.





For one in four non-IRA owners who were asked and said they can’t afford the opening investment, opportunities to save further for retirement maybe intimidating. But getting started devoid of an initial lump sum is as fundamental as setting up automatic monthly payments through a Fidelity SimpleStart IRA.



The fact is that younger investors could earn the most by starting to save early because they have the advantage of time. The Retirement Trends survey reveals that about two-thirds of young adults above 30 years old have started to invest for retirement. That’s good news: getting a head start on savings is actually one of the best ways of getting ready for the future.



Tax refunds