Dear past self: Thanks for the IRA

Seven piggy banks with quarters stacked underneath them to show savings increase.
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Imagine yourself in 20, 30 or 40 years, looking back on the decisions you made today. Which ones will you regret? Which ones will fill you with a sense of satisfaction?

One decision you’ll never regret is the decision to fund your future. The more you can grow your nest egg now, the more comfortable you’ll be in retirement. Picture yourself living the retirement you dream about, whatever that looks like for you. Now imagine your future self thanking you for making it happen.

The sooner you start funding your retirement, the more time your money will have to multiply. With compound interest on your side, saving a little today helps to ensure a brighter tomorrow. More time equals exponential growth — and a wealthier future you.

Your future self will love your IRA

Opening an individual retirement account (IRA) could be one of the best financial decisions you’ll ever make. A traditional IRA lets you save for retirement tax-free, allowing you to supplement your 401(k) or pension with extra income to cushion you as you age. If you’re self-employed or your employer doesn’t offer retirement benefits, your IRA could one day become your primary source of income.

If eligible you can contribute up to $6,000 a year to your IRA (or $7,000 if you're 50 or older). If you choose a traditional IRA, you may be able to claim your contributions on your taxes to get a bigger refund. (Pro tip: Contribute up through April 15 for the 2021 tax year or put your refund toward next year’s IRA contribution.*) Once the money hits your account, it starts earning interest. Then your interest will start earning interest.

What does that mean for your future self? If you invest $6,000 a year at a return of 3% for 30 years, you’ll have over a $285,000 nest egg waiting when you retire.

That’s the magic of compound interest.

Want to run some of your retirement savings numbers? Give our retirement calculator a try.

Let us help your self

So what should your present self do right now? If you’re an OCCU member, you have a team of professionals at the ready to help navigate your retirement options. Contact them.

They’ll help you choose an IRA, if that’s the best option for you. If you have more than one retirement account – perhaps through employment changes – they can help you consolidate them into one. (Here’s a helpful checklist to get started.) They can help you forecast your savings to ensure the retirement you want.

And while we can guide you through your investment plan, you should also reach out to a tax advisor when it comes to tax planning. As an OCCU member, you can save up to $25 on in-office tax preparation services from H&R Block. It’s just one of the many perks that come with being a credit union member.

WWYFSD — What would your future self do?

Many of the things that seem important today won’t matter to your future self. What will matter are the contributions you make to your retirement account. If you were to ask your future self for advice, chances are it would be to pay your IRA first and everything else second. 

The best way to secure your future is to set aside that money before you have a chance to spend it. Pick an amount that makes sense with where you’re at on your financial journey. You can set up your accounts to automatically transfer your contribution each payday. Then figure out a monthly budget based on what you have left.

Saving might feel like a bit of a hardship now, but just keep thinking about your future self. Someday that will be you, looking back on your past self and being thankful for making the decision to fund your future.

Ready for future you to thank you later? Let our experts help set you up for future success. Learn more about the retirement accounts OCCU has available by contacting an IRA specialist or calling 541.687.2347.


*Note: The above information is not intended as tax advice. Please consult your tax professional for tax information.