When should I start an IRA?

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David Fabian, Managing Partner, FMD Capital Management, LLC

@DavidFabian • 05/20/15 This answer was first published on 05/20/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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It's never too early to start contributing to an IRA as long as you have earned income. You should first make sure that you are maxing out your 401k or employer sponsored plan (especially if they provide matching incentives). Then go on to contribute to an IRA as another form or tax-deferred savings.

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Dmitriy Fomichenko, President, Sense Financial

@dfomichenko • 08/15/15 This answer was first published on 08/15/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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The earlier you start saving for retirement, the better. Because of the compounding effect, even a small contribution now can add up to a large fund later. I would also suggest that you also build up an emergency fund in a saving account, so that the money is easily accessible first. If you have any debt, such as credit card or student loan, make sure you make at least the minimum payment. Then you can also maximize your employer's matching contribution to a 401k, if any. With these out of the way, then you can start contributing to an IRA also.

Since you are young and will probably have many years left until retirement, it may be wise to also look into the option of a Roth IRA. With this option, you pay taxes up front, but your investments will be able to grow tax-free.

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