Does your retirement account benefit you now?

If you are in your 20s, 30s, or 40s, retirement is probably far from your thoughts. You contribute to your 401k (or IRA or TSP) because you know you should, but it is hard to be motivated. After all, retirement is many years away and you have so many goals you would like to accomplish long before you are eligible to withdraw from those accounts. What many don’t realize is that there are several ways your retirement account can benefit you long before retirement age.

5 ways your retirement account can benefit you years before retirement

1. You can withdraw from a Roth IRA to buy your first house. Up to $10,000 of earnings from your Roth IRA can be withdrawn for the purchase of your first house. This could be a big help in making that down payment. There are other circumstances that have their own special withdrawal rules as well, like for education expenses or the birth or adoption of a child.

   
   

2. You can withdraw Roth IRA contributions well before retirement age. Roth IRAs are often considered one of the most flexible types of retirement accounts. One reason is that you can withdraw your contributions at any time.

   
   

3. Your retirement account balance can help you qualify for a mortgage. Just by being there, the balance in your retirement account benefits you by helping meet the reserve requirements for a mortgage. You benefit from the account and demonstrate financial stability without having to withdraw a single penny.

   
   

4. A well-funded retirement account can provide you the financial stability to direct your money to other goals. By aggressively funding your retirement account early, you can build up a nest-egg that will help give you the peace of mind to spend money on other things, like buying a house, starting your own business, or doing some world travel.

   
   

5. “Retire” early: many times, people do not want to entirely stop working young, they just want the freedom to do the work they want. Though less commonly known, it is possible to draw income from retirement accounts years before standard retirement age. The more money you have saved in your retirement account, the more possibilities you have.

Bottom line: don’t hold off on contributing to a retirement account because retirement is a long time away. Having robust retirement savings will benefit you greatly in the years to come, but could also help you sooner than you think.

If you don’t have a Roth IRA, or if you have one but need someone to manage it, reach out to me and I’ll be glad to help you get set up.

This article is for general informational purposes and is not personalized financial advice. Please consult a financial professional for individualized advice for your unique situation.