IRAs are not Enough

While the tax-deferred compounding of the IRA may have a powerful impact on the growth rate of your savings, you may need to increase your savings in other ways also. For example, if you are still working at 50 or more, you can contribute at least enough to a 401(k) plan, if it is available, to earn the maximum employer match allowed by the plan. Additionally, many employer retirement plans allow workers over age 50 to contribute an extra $5,000 (for 2006) above what younger workers are permitted to contribute.