Smart IRA Planning Can Equal One Meeeelion Dollars

OK ladies, you only have a few more days to contribute to that IRA account. And as the title of this blog says, you’ve got to do it now or else you will miss the opportunity. In other words, if you were planning on depositing $5k each year to create that comfortable nest egg for your retirement, but this year has been a little tight, and you figured $3K would suffice. You can’t add more later.

When about.com asked their readers if they were contributing to an IRA, this answer caught our eye.

You Better Believe It!!!

I have contributed the maximum allowed to my Roth IRA since I was in college, plus I have a retirement account at work and I go up to the max allowed there, as well. Between those two accounts, I put aside a bit more than $15,000 per year and I get another $7,500 in matching, so I’m saving $22,500 each year. I put half of the money in stock index funds and half in bond funds. I’m 28 years old and I figure if I keep doing this until I’m in my 60’s, it doesn’t matter if we go through another great depression, I’m going to be LOADED. The only way a portfolio like that falls apart is if the whole world has gone to hell, in which case it won’t matter anyway.
Assuming this reader started putting away her money when she was twenty five years old, and she made NOTHING on her index funds, she would have $787,500 for retirement. However, for fun let’s say she was able to earn 5 percent on her money every year. She will retire with $2,032,207.  Say it like Dr. Evil.. two million dollars! (OK, he says, one meeeelion dollars, but couldn’t we resist the dramatic effect).
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