Help Center » Retirement
Generally, if you have access to an employer plan, such as a 401(k) or 403(b)(7), you should first contribute enough to get the company match. That's free money you can use to boost your retirement savings.
Next, max out your IRA contributions. Unless you're in the top tax brackets, a Roth IRA offers greater tax advantages than a traditional IRA when it comes time to begin withdrawals. You can contribute up to $5,500 to an IRA in 2014 ($6,500 if you're age 50 or older), subject to income limitations.
Once you've maxed out your IRA, top off your employer plan. For 2014, you can contribute up to $17,500 ($23,000 if you're age 50 or older). Consider investing any remaining money in a taxable account or a tax-deferred annuity.
Vanguard makes it easy for you to choose and manage your retirement investments. We offer most types of tax-advantaged plans, including 401(k) plans, 403(b)(7) plans, traditional IRAs, Roth IRAs, SEP-IRAs, SIMPLE IRAs, and tax-sheltered annuities. A Vanguard IRA® offers a simple way to add to your retirement savings.
You can invest in any combination of Vanguard mutual funds you'd like. Or, if you open a brokerage IRA, you can invest in Vanguard ETFs®, individual securities like stocks and bonds, and mutual funds from other fund companies. And you can monitor your accounts online or by phone whenever you want. No matter which investments you choose, you'll find our fees and costs are among the lowest in the industry.
There are a number of other ways in which Vanguard can help you save.
The sooner you start, the larger your nest egg is likely to be when you retire. Time magnifies the power of compounding, which can make the same dollar worth significantly more the earlier you invest it. You also benefit from the following incentives:
One rule of thumb is that you'll need to replace at least 75% to 85% of your income before retirement. Of course, you may need more or less depending on your lifestyle, your health, and the inevitable effect of inflation.
To calculate how much you may need, try our interactive tool, Determine how much to save. Remember to do a financial checkup every couple of years—or every year as you near retirement—just to be sure you're still on track.
All investments are subject to risk, including the possible loss of the money you invest.
When taking withdrawals from an IRA before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.