They should be looking ahead to the future — and regularly contributing to their savings.
One of the best things you can do in 2015 to set yourself up for financial success in the future is to be strategic with your savings. Save as much money as you can in a Roth IRA.
According to a recent article at gobankingrates.com, titled “CNBC’s Sharon Epperson on Why You Need a Roth IRA in 2015,” in the event of an emergency make sure you're able to withdraw your contributions at any time without incurring penalties or fees. This is also a terrific way to save for retirement, because you might be in a higher or lower tax bracket when you’re in your 60s. Who knows?
With a Roth IRA, typically you can withdraw money tax-free after age 59½. If you qualify for a Roth, you could save up to $5,500 in 2015, or $6,500 if you’re 50 or older. Don’t forget that you have until April 15th to make your contributions for 2014.
Another type of Roth account for retirement savings is a Roth 401(k). This version doesn't have any income limits. If your job has this type of retirement plan (many large employers are expected to offer a Roth 401(k) option in 2015), you can contribute up to $18,000 next year (or $23,000 if you’re 50 or older).
Unlike a traditional IRA or 401(k), Roth contributions won’t reduce your taxable income; however, your overall tax savings (tax-free withdrawals) are likely to be much greater when you retire.
Reference: gobankingrates.com (December 6, 2014) “CNBC’s Sharon Epperson on Why You Need a Roth IRA in 2015 ”