Many workers find themselves moving from company to company as they look to fast-track their careers or find just the right kind of work for them. Changing jobs can be a great way to gain experience and professional insight, but it can complicate saving for retirement. An Individual Retirement Account (IRA), a savings vehicle that is independent of your workplace, can really help.
Some companies, especially smaller ones, don’t offer a 401(k) retirement plan. And even if you join a company that has a 401(k), you may not get to participate right away. Indeed, you might need to be on the job for as long as one year before you can start putting money in. A one-year wait is the rule at 41% of small-company 401(k)s administered by one large retirement-plan provider.¹
With an IRA, you can quickly and easily get on the road to retirement saving. An IRA can keep your saving on track in the months before you are eligible for a new employer’s 401(k).
Once you set up an IRA, you can begin contributing right away and keep saving until you hit the maximum allowed for a calendar year. For example, for Traditional or Roth IRAs for 2017 and 2018, that maximum is generally $5,500, as long as you earn at least that much compensation; the figure is $6,500 if you are 50 or older.
You can put money into a Traditional or Roth IRA from January through December of that year and then on through the tax filing deadline in April of the following year. Get all the details on eligibility, maximum contributions, and deadlines in IRS Publication 590-A.
If you had a number of past jobs at which you participated in a 401(k), you may have your retirement savings scattered across accounts at multiple financial firms. An IRA can be handy to consolidate those dollars in one place. That can make it easier to keep track of your money and be sure you are invested in an appropriate mix of assets.
With Honest Dollar by Goldman Sachs, you can set up a low-cost, professionally managed IRA in minutes. And you get the flexibility to set dollars aside for retirement on your schedule, with one-time or recurring contributions from your bank account.