Winning Ticket

You combine the birthdays of your kids, your Social Security number, and your house number and somehow come up with the winning lottery numbers. Congratulations.

Now wake up to reality. The odds of winning a lottery and securing your financial future are very long indeed. A better strategy is to put aside money now for your retirement, no matter what your age. An Individual Retirement Account is an excellent way to do this.

IRAs Take Advantage Of Compounding

An IRA isn't like winning the lottery. You don't need luck to build up your IRA balance, just discipline. An IRA is an excellent way to take advantage of time and compound interest. If you make consistent contributions over your entire working career, you can enjoy a substantial retirement nest egg.

Let's say you're 25 years old and contribute the maximum $2,000 (2001 limit) to your IRA every year until you retire at age 65. Assuming an 8% average annual return (your actual return will differ), you would have $518,113 in your account when you're ready to retire.

Waiting until you are older can cost you a lot. If you don't begin contributing until 20 years before you retire, you would have only $91,524 in your IRA.

Tax Advantages Of IRAs

If you really win the lottery and invest the proceeds, you probably will have to give Uncle Sam his share of both your winnings and your investment earnings. But investment earnings in traditional IRAs are tax deferred until you begin taking money out at retirement, when your tax bracket may be lower. And, if you qualify, your contributions to a traditional IRA can be tax deductible. If you set up a new Roth IRA, the earnings are tax free and you will not have to pay taxes, even when you begin taking your money out, assuming all qualifications are met. The less you have to pay in income taxes, the more money you'll have in your account to build compound earnings.

Winning the lottery takes a great deal of luck. Accumulating an impressive amount of money in your IRA takes planning, persistence, and patience.

A winning IRA strategy involves:

• making the maximum investment you can, - starting early in your working career, and - investing faithfully every year.

If you follow these simple rules, you won't have to trust your retirement nest egg to chance.

Give us a call (549-1114) to find out about the new higher limits available on IRA accounts this year.

ENB Associates Inc. is a wholly owned subsidiary of Evans National Bank. Securities are offered by O'Keefe Shaw & Co., Inc. Member NASD, and SIPC. Products purchased through O'Keefe Shaw may lose value, are not deposits with obligations of, or guaranteed by Evans National Bank or affiliates and are not insured by the FDIC.