Five Retirement Investing Myths

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Just like anything else, retirement saving comes with its share of myths. And they may not be harmless — believing them could derail your long-term savings plan. Let’s look at a few common myths and then get the real story.

Myth 1: Starting an IRA is complicated 

On the contrary. You can open an E*TRADE IRA in less than 15 minutes and make your contribution for the year online. It’s that easy. Really. Not sure which IRA may be right for you? Use our IRA Selector Tool to help make your choice and see how much you may be able to deduct.

Myth 2: There’s no benefit to funding an IRA if you can’t deduct your contributions

Sounds true-ish, right? But we’re busting myths here. If you’re already contributing to a 401(k), and your income exceeds certain limits, your IRA contributions may not be deductible. But even in that case, an IRA still has a tax advantage: your earnings have the potential to grow tax‑deferred until you withdraw them in retirement. 

Myth 3: You can’t contribute to an IRA if you have a 401(k) 

Not so much. Even if you max out your 401(k) contributions, you can still contribute up to $5,500 to an IRA. Why do it? Because it’s a good way to save more, and you’ll still enjoy the potential tax advantages on the earnings in your IRA. 

Myth 4: You can’t adjust your retirement plan 

Not only can you adjust it, you might need to — your life changes, right? In just 4 steps and about 15 minutes, the E*TRADE Retirement Planning Calculator can help you create an up‑to‑date retirement investing plan — one that’s based on your current goals and circumstances. Once your plan is saved, you can go back to adjust it whenever you need to. 

Myth 5: The more retirement accounts you have, the better 

More retirement assets? Definitely good. More retirement accounts? Not necessarily good. Think about consolidating your IRA accounts into one. It makes account management much simpler — just one statement, just one beneficiary designation. Equally important, with a single account it’s easier to track your asset allocation and rebalance your portfolio if it drifts away from your target. Transfer your IRAs to E*TRADE now. Simplify your life and take advantage of our professional guidance and ongoing retirement planning.

Don’t let myths stop you from having the retirement you dream about. E*TRADE offers the education, tools and resources you need to help you achieve your long-term savings goals.