Flexible Retirement Investments: IRA Money Market Accounts

Most Americans retire at 65, but the average lifespan for American men and women is 84.3 and 86.6, respectively. This means many will spend over 20 years in retirement — a time of life when income often drops. However, a dip in earnings doesn’t mean retirees are ready to pinch every penny. Consider the average monthly expenses they paid in 2016:

  • Housing: $1,294
  • Transportation: $571
  • Healthcare: $480
  • Food: $459
  • Entertainment: $205
  • Personal Insurance: $228
  • Cash contributions (e.g. charity): $191
  • Other: $294

Retirees spend an average of $3,722 a month, which equals about $44,600 a year. It’s a middleclass income, but it soars above the average retirement income of $16,800. The disparity explains why many start planning for retirement before noticing the first gray hair, or start making significant retirement investments in midlife to make up for lost time.

In either case, there’s a question that needs answering: How should a person invest to create the most financial flexibility, now and in retirement?     

Benefits of IRA Money Market Accounts

Investment plans for retirement have a wide array of options, but investing in an IRA money market account is one of the most painless ways to build a nest egg for the golden years. Our NCUA insured IRA Money Market Account with the following benefits is a good example:

  • Compatible with Traditional or Roth IRA
  • Low minimum investment of $1,000
  • Higher interest rate than regular savings        
  • Interest compounded DAILY on balances of $1,000+
  • Interest paid to account monthly

An IRA also gives you tax benefits for making deposits. Say your tax rate is 35% between federal and state, and you make an annual IRA deposit of $3,000. When tax time comes, you can claim $1,050 in deductions (This is a simple example; please check with your tax advisor for your individual tax situation). In addition to increasing flexibility in retirement, IRAs can add flexibility along the way.      

Ready to Start Investing for Retirement?         

Investing for retirement affects finances now and later in life. Whether you recently entered the workforce as a young adult, or you’re a Baby Boomer who’s dreaming of a warmer climate, investing for retirement starts with choosing the right option for your needs and goals. For many, an IRA money market account is a major piece of the puzzle.

To learn more about our IRA Money Market Account and other IRA options, call American Eagle Credit Union today at (800) 325-9905, or send us an email from our contact form.

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