According to a recent survey, what percentage of people age 22-32 claim to have no savings for retirement?

A. 23%
B. 51%
C. 77%
D. 11%. 

In just a minute, I’ll show you the answer.

So, here you are.  You've landed the great job that you always wanted.  Your career is underway, and you're finally starting to earn the kind of money you were hoping to. 

If you're like me, it's pretty tempting to go out and start getting the things you've been dreaming about - a new car, clothes, maybe the new tablet that just came out, and a retirement account?

I know - you're too young to think about that, right? Well, maybe not.  I mean, sure, there are a lot of things to do before you stop working, like paying off your student loans, for example.  But if you start saving now, things could be a whole lot easier down the road.  

One easy step you could take is to open an IRA. This would allow you to start putting some money away, and have it grow, tax deferred.  And that tax-deferred growth can really add up over time.

Here's how: if you deposited $5,500 in an IRA at age 30, then deposited the same amount every year for 30 years. Assuming a 6% return and a 25% tax bracket, your money would grow to over $460,000 in those three decades - versus about $350,000 in a taxable account. 

That $110,000 dollar difference makes for a pretty different kind of retirement - even after accounting for  taxes you may pay on that money when you withdraw  it.

So you've seen the difference tax-deferred earnings in an IRA can make over the long haul.  Now you need to consider which IRA is best for you.  There are two kinds - the Traditional IRA and the Roth IRA.

In a Traditional IRA, your contributions may be deductible on your tax return and you'll generally pay taxes when you make withdrawals in retirement. With a Roth IRA, you make contributions with money you've already paid taxes on (after tax) so withdrawals are tax-free in retirement, provided that certain conditions are met.

The amount of money you can contribute to either type of  IRA is $5500 per year - and you can split your contribution between the two - but the combined total can't be more than the annual limit. There are also a few other rules you'll need to know about these  IRAs, so it's always a good idea to have a conversation with a financial professional to get the details that will will help you decide which account is the best fit for you. 

Ask friends and family members for ideas on who they'd recommend to give this kind of advice.  And here's the real irony - the start of your career is really the best time to start preparing for the end of it.  Regardless of which IRA you choose, if you start putting away money now - even a little bit, the power of tax deferred growth and compounding interest will help you to live the kind of retirement you'd like down the road.

So, what percentage of people aged 22-32 claim to have no savings for retirement? The answer is
B: 51% of people 22-32 claim to have nothing saved for retirement.

Saving enough for retirement?

Find out with My Retirement Plan, an online tool that makes it easy to see if you are on track. After you answer a few questions, My Retirement Plan will calculate your retirement savings goal and recommend personalized next steps.

My Retirement Plan