Based on recent “Retirement Trends” survey by Fidelity Investments, 96 percent of Americans saving for retirement don’t have any idea of the current contribution limit for an individual retirement account, with a few 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 face rising health care costs when they retire, as well as declining pension benefits and a higher cost of living. 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. However, Fidelity guesses that for retirees to live comfortably, they will need about 80 percent to 100 percent of their pre-retirement income. Investing in an IRA today to augment workplace programs can help investors to ensure their savings will grow continuously 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. On the other hand, opening an account even without monthly payments is as uncomplicated as arranging automatic monthly payments via a FidelitySimpleStart IRA.

The younger the investor, the more benefits will be realized if they start to invest early. According to the Retirement Trends Survey, approximately two-thirds of young adults have started to save for retirement earlier than age 30. That’s great news because when one starts to save early as possible, he is setting up one of the best preparations for the future.

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