Debunking common knowledge about iras

According to a recent "Retirement Trends" survey by Fidelity Investments, 96 percent of Americans saving for retirement don't know the current contribution limit for an individual retirement account, with some guessing as low as $1,000. The reality is that for tax year 2005, IRA contribution limits increase to $4,000 -- up from $3,000 in 2004. When it comes to knowing the facts about retirement, misperceptions can lead to missed opportunities. Today's workers will face rising health care costs when they retire, as well as declining pension benefits and a higher cost of living. That's why it's important to save as much as possible, and as early as possible, in tax-advantaged accounts like IRAs. Knowing the facts can help dispel common myths that may keep some investors from making the smart move of saving in an IRA. * Myth No. 1: My 401(k) savings should be enough. Nearly one-third of Americans in their prime savings years who have not yet opened an IRA account think their 401(k) savings will be sufficient for retirement, according to the Retirement Trends survey. However, Fidelity estimates that retirees will need approximately 80 percent to 100 percent of their pre-retirement income to live comfortably. Using an IRA now to supplement workplace programs can help investors make sure their savings will continue to grow and last throughout retirement. * Myth No. 2: I have to come up with thousands of dollars all at once to open an IRA. For the one in four non-IRA owners surveyed who say they can't afford the initial investment required to open an IRA, opportunities to save even more for retirement may be daunting. But getting started without an initial lump sum is as easy as setting up automatic monthly payments through a Fidelity SimpleStart IRA. * Myth No. 3: IRAs are for older people with lots of money to save. The truth is that younger investors could benefit the most by starting to save early because they have time on their side. Nearly two-thirds of young adults have started to save for retirement before age 30, according to the Retirement Trends survey. That's good news; starting to save as early as possible is one of the best ways to prepare for the future.

Women fear they ll have little gold in their golden years

Nearly 40 percent of women aged 30 to 55 are worried about spending their retirement years at or near the poverty level because they cannot adequately save for retirement, according to a recent survey. The National Women's 2005 Retirement Survey found that women of color are most concerned about their ability to save for retirement. While 53 percent of women of color report that they expect to live at or near the poverty level in their retirement years, just 33 percent of all men expect to face the same dilemma. The survey was commissioned by the Heinz Family Philanthropies under the direction of Teresa Heinz, founder of the Women's Institute for a Secure Retirement and chairman of the Heinz Family Philanthropies. Here are some of the survey's other key findings. * Fifty-two percent of women expect to continue to work once they reach retirement age, including 57 percent of Hispanic women. * Fifty-four percent of women have little to no money left to save for retirement once they pay their bills, rising to 62 percent among Hispanic and African-American women. * When asked, "At the present time, do you feel that you are saving enough money for your retirement?" 62 percent of the women surveyed answered "no." Among women of color, 74 percent of African-American and Hispanic women said they are not saving enough. * When asked about barriers to saving for retirement, African-American women are more than twice as likely as white women to cite "financial responsibility for adult children or grandchildren" as a reason for not saving for retirement. Of the African-American women supporting their adult children or grandchildren, 63 percent report spending between $100 and $1,000 on them each month. The Heinz Family Philanthropies commissioned this survey with the Christie Foundation, the Barbara Lee Foundation and others to identify the critical retirement savings issues facing women and to use the data to develop ways to help women secure their financial futures. The survey polled 1,700 adults and has a margin of error of plus or minus 2.4 percentage points.