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If you make regular deposits into a savings account, then you understand the importance of building a financial safety net. Here are a few reasons why investing might be the next logical step for your finances.
Protect Against Inflation: Investment account dividends are often able to outpace inflation rates. If the inflation rate is averaging 2% and your investment account is earning an average rate of return of 6%, then the account is helping to protect your hard-earned dollars against the effects of inflation.
Receive Tax Benefits: Certain long-term investments, like Individual Retirement Accounts (IRAs), offer multiple benefits for account holders that include low minimum balance requirements, tax-deferred growth, or tax-free withdrawals. For example, when you open a Hughes FCU Traditional IRA with a $100 deposit, you can grow your retirement savings with tax-deductible contributions.
Make Your Money Work Harder: The sooner you start investing, the greater opportunity you have to benefit from the magic of compound interest. The interest you earn on your investments is added to your account balance, and your future earnings are calculated on the new balance. Each instance of compounding allows your money to grow faster, even if you decide not to make any additional deposits.
HFCU Financial Services is here to help you make your financial dreams a reality. An experienced Certified Financial Planner™ can answer your wealth-building questions and assist you with creating an investment plan that fits your needs.