Choosing the best IRA for you
An Individual Retirement Account (IRA) seems like an ordinary bank account that helps you save but what makes IRA reliable is that investing money in it is a simple and tax-effective way to plan your income after retirement and it is very easy to open one. Once you open an IRA, you can invest the money in the account in any number of ways.
What are the other advantages of having an IRA?
IRA provides you with the liberty of choosing the bank or brokerage and take decisions regarding your investments. What more? Based on the eligibility, you get to decide how and when you would get a tariff break. Additionally, you can contribute or invest in multiple plans available.
What are the best IRA plans available?
With so many retirement income planning options to choose from IRA, you might find yourself in a pretty competitive field. Of the many, the following are the three most popular IRA plans that have lower fees and provide better service irrespective of you being a fresher or an experienced trader – Roth IRA, Traditional IRA and Rollover IRA.
Which are the plans that will suite me?
- Traditional IRA: In this plan, you can fund at a financial institution like banks or brokerage firms. Contributions made to this plan are tax deductible and investment income is postponed, meaning you don’t have to pay tax at the time of contribution instead the tax will be deducted at the time of withdrawal after retirement.
- Roth IRA: This plan allows you to fund at a financial institution like Traditional IRA. This plan ensures that you will enjoy tax free growth and tax free withdrawals i.e. you will be paying tax at the time of contribution to relish withdrawals that are tax free after the retirement.
- Rollover IRA: You will be eligible for this plan when you wish to switch to another IRA plan. You will be able to fund for the new plan only if you have a qualified existing plan. This plan allows you to enjoy tax free growth like Traditional or Roth IRA based on the plan that you opt for.
If you are planning on savings and investing your retirement income, timing is everything. So, open your IRA today to enjoy the tax benefits on your withdrawals post retirement.
