According to a recent "Retirement Trends" survey by Fidelity Investments, 96 percent of Americans saving for retirements don’t know the current contribution limit for an individual retirement account, with some guessing as low as $1,000. The fact is that for tax year 2005, IRA contribution limits go up to $4,000 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 meet mounting health care costs together with diminishing pension benefits and a higher cost of living when they retire. That's why it's important to save as much as possible, and as early as possible, in tax-advantaged accounts like IRAs.

Understanding the facts can help dismiss common delusions that may prevent some investors from making the smart move of saving in an 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. On the other hand, Fidelity quotes about 80 percent to 100 percent of income prior to retirement will be needed by retirees in order to live sufficiently. 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. But getting started without an initial lump sum is as easy as setting up automatic monthly payments through a Fidelity SimpleStart IRA.

The fact is that younger investors could earn the most by starting to save early because they have the advantage of time. As gathered by the Retirement Trends survey, practically two-thirds of young adults have set off to save for retirement ahead of age 30. That’s good news; it means that commencing to save as early as possible is one of the best schemes to gear up for the future.

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