How many more years do you have to go until it is your time?
Well before you answer that question...do you have an IRA or do you even know what one is?
An IRA is an Individual Retirement Account. There are tax benefits if you choose one type of IRA over the other, but the main thing is that you will be saving for retirement. It is a win-win situation.
For many people, retirement savings begins and ends with their employer's 401(k) plan. However, a lot of people do not have a retirement plan at their job. That leaves employees on their own to save for retirement, and an IRA account is the perfect starting place.
There are two types of IRAs; TRADITIONAL and ROTH.
- A traditional IRA allows a tax deduction for the tax year of the contribution.
- A Roth IRA allows you to invest money after taxes and then withdraw your money tax-free at retirement time.
Both Traditional IRAs and Roth IRAs have a maximum amount that can be deposited each year and those amounts change every tax year.
Is an IRA the same as a 401(k)?
No, an IRA and a 401(k) are two different types of retirement accounts. A 401(k) plan is sponsored by your employer and SOMETIMES they will match your contributions. An IRA can be opened by an individual. However, both an IRA and a 401(k) offers tax benefits.
How do I set-up an IRA account?
It’s easy, you can open an IRA at your local bank or credit union and there are even online options. Though there are advantages and disadvantages to banks and credit unions, if you are new to saving, you should look for ample resources made available to investors, such as online educational materials and in-person guidance.
Set Goals
Where would you be today without goals? Saving for retirement is a goal, a monthly goal that you can plan for. Even if you only set aside $100 a month in your IRA, it is still $100 more than what you had saved up before you started. START SAVING TODAY and I promise you that you won’t regret it.