IRA (Individual Retirement Account) offers a unique powerful way to save and help you reach your retirement savings goals. An IRA is a type of investment account with tax benefits that can help you save for retirement. You can invest in most things using an IRA. Listed below are benefits of a traditional IRA.
- IRAs are accessible and easy to set up. Most people are eligible to open and contribute to an IRA. To open and make contributions to a traditional IRA, you just need to earn taxable income. You can open an IRA through many banks or brokerage firms in a few minutes.
- Traditional IRAs provide tax break right now. Traditional IRAs allow the advantage of tax-deferred growth. You do not pay taxes on your untaxed earning or contributions until you are required to take distributions when you reach 72 years old.
- IRAs are exclusively yours. Your access to your IRA is unchanged if you switch jobs. You can rollover your previous employer’s 401K funds into your IRA.
- IRAs allow you to invest in many investment options. In IRA, you can invest in any kind of asset such as savings accounts, CDs, stocks, bonds, mutual funds, exchange-traded funds (ETFs) and more.
Therefore, IRAs allows you to save money for retirement in a tax advantaged way. You can get the benefit of the tax deduction upon contribution and no taxes or little taxes upon withdrawal during your retirement age.