Establishing an Individual Retirement Account (IRA) and contributing the annual maximum from a young age offers one of the surest ways to ensure a comfortable retirement.
For example, a 22-year-old who contributes the maximum allowable $6,000 every year into a Roth IRA until age 60, and earns an average annual return of 9% (roughly the long-term stock market average) will have a tax-free nest egg worth about $1.7 million. That's the power of tax-free compounding one can get from an IRA. And considering that the maximum allowable contribution occasionally increases, the future value of that nest egg has the potential to be even higher.
We know that establishing an IRA is important, but what should you invest in? Most financial advisors would first suggest you focus on picking a well-regarded index fund to get the investing diversification you need to ensure long-term performance. But if you are set on incorporating individual stocks into your IRA as well, there are three great stocks you might want to consider: Amazon.com (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Spotify (NYSE: SPOT).
Source Fool.com