Saving For Retirement

February 25, 2012 5:36:45 AM PST
How can you choose a good plan to save up for retirement?Retirement planning sure has changed since our grandparents' time. Social security and a company pension are simply no longer something we can rely on for our future. Joan Jensen, president and CEO of the Central Credit Union of Illinois (, came into our ABC7 studio to discuss a few options.

Joan's Tips:

Advantages of 401K Plans and IRAs

  • Tax advantages: your money grows tax-free
  • Contributions through payroll deduction
  • Investment options: stock mutual funds, bond mutual funds, balanced funds, stable value funds, and money market funds


  • Free money if your employer offers matching funds
  • No income limits
  • Higher dollar limits for contributions: most employees can contribute up to $17,000; those 50+ can contribute up to $22,500
  • Loan programs: borrow from your 401K account
  • Rollovers if you leave the company
  • Investment choices

IRA Account

  • Consider if no 401K plan is available, if your employer does not offer a match for 401K funds, or if you have maxed out your 401K match.
  • No matching funds
  • Lower annual contribution limits: maximum $5,000 up to age 50, $6,000 for those 50+
  • More investing options
  • Ease of moving money to other IRA accounts

Roth versus Traditional IRA

  • Current income and tax bracket may limit your options
  • Anticipated tax bracket at retirement
  • Your current age
  • Withdrawal timetable