An Individual Retirement Account (IRA) is a popular long-term retirement savings plan designed to help individuals save and invest for their retirement years. IRAs are designed for individuals with or without access to employer-sponsored retirement plans like the 401(k).
IRAs offer certain tax advantages, which allow individuals to contribute pre-tax or post-tax income (depending on the type of IRA). Roth IRAs allow individuals to potentially grow their investments tax-free until they begin withdrawing funds in retirement.
IRAs provide a flexible and efficient way for individuals to build a nest egg for retirement and come with a wide range of investment options to suit different financial goals and risk tolerances.
Depending on the type of IRA you choose, you may be able to lower your current tax liability when you contribute or allow for potentially tax-free withdrawals in retirement.
When choosing between different types of IRAs, it's important to understand each IRA's unique set of rules and benefits. You'll want to consider income restrictions as well as potential tax advantages.
This is a great option if you want to pay taxes now and potentially not have to pay taxes when you retire.
Roth IRA benefits:
If you’re looking for an easy way to build your retirement portfolio and want to defer paying taxes until after you retire, a Traditional IRA could be a good choice.
Traditional IRA benefits:
Choosing to consolidate your existing 401(k)s into one easy-to-manage IRA can provide you with great options.
Rollover IRA benefits include:
Business owners and self-employed individuals might prefer SEP IRAs because they are cost-effective, with fewer startup and ongoing expenses than traditional plans.
SEP IRA benefits include:
The SIMPLE IRA is a retirement savings option that offers employee salary deferral contributions and employer matching contributions for small business owners and self-employed individuals.
SIMPLE IRA benefits include:
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*Consider all available options, which include remaining with your current retirement plan, rolling over into a new employer's plan or IRA, or cashing out the account value. When deciding between an employer-sponsored plan and IRA, there may be important differences to consider, such as range of investment options, fees and expenses, availability of services, and distribution rules (including differences in applicable taxes and penalties). Depending on your plan's investment options, in some cases, the investment management fees associated with your plan's investment options may be lower than similar investment options offered outside the plan.
All investments involve risk, including possible loss of principal.
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