Q: I just started my first full-time job but am not eligible for the company sponsored 401(k) until December. What should I do if I want to start saving for retirement now?

A: It’s a great idea to get a head start on your retirement saving even if your employer delays the onset of its retirement benefit. In most situations, a traditional IRA (Individual Retirement Account) is the best solution for young, independent retirement savers. IRA contributions not only grow tax-deferred, but are tax-deductible up to $2,000 per year.

Almost any financial institution (including, most likely, your local bank), can set up your IRA, and many will waive minimum balances if you agree to have monthly contributions automatically deposited into your account. As with opening any retirement planning account, there will be a seemingly daunting variety of investment options available to you. Especially as you just start out, how you decide to allocate your savings is far less important than the act of saving something. If possible, choose a pre-designed aggressive portfolio.

As a young investor you can better tolerate the risks inherent with aggressive investments but stand to be rewarded further down the road.

Once you become eligible for your 401(k), contribute to both. That way you can take advantage of any matching contributions from your employer and the IRA tax deduction.

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