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A recent survey conducted by Fidelity Investments, 96% of Americans who are saving for retirement don’t realize the present contribution ceiling for an individual retirement account, with some guessing as low as $1,000. The reality is that for tax year 2005, IRA contribution limits increase to $4,000 -- up from $3,000 in 2004.

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When it relates to knowing the facts about retirement, misperceptions are tantamount to missed opportunities. Today's workers will face rising health care costs when they retire, as well as declining pension benefits and a higher cost of living. That's why it's important to save as much as possible, and as early as possible, in tax-advantaged accounts like IRAs.


Familiarizing with the facts can held discard widespread fabrications that may drive away some investors from making a wise decision of saving in the IRA.

Nearly one-third of Americans in their prime savings years who have not yet opened an IRA account think their 401(k) savings will be sufficient for retirement, according to the Retirement Trends survey. However, Fidelity gives a calculated guess that if retirees wish to live comfortably they will need roughly about 80 percent to 100 percent of their pre-retirement income. By means of an IRA now to enhance workplace programs can provide investors with a guarantee that their savings will keep on growing and last throughout retirement.

For one in four non-IRA owners who were asked and said they can’t afford the opening investment, opportunities to save further for retirement maybe intimidating. On the other hand, opening an account even without monthly payments is as uncomplicated as arranging automatic monthly payments via a FidelitySimpleStart IRA.

The fact is that younger investors have time on their sides, which should give them more reasons to start saving early. The Retirement Trends survey reveals that about two-thirds of young adults above 30 years old have started to invest for retirement. That's good news; starting to save as early as possible is one of the best ways to prepare for the future.

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