IRA Retirement Plan: Important Information
When it comes to retirement planning there are a few aspects which are of particular importance, one being the IRA retirement plan.
What it is
An IRA retirement plan, or Individual Retirement Arrangement plan, is one which allows a person to save money for use in retirement while deferring taxes on the account’s earnings. The funds that are put into this IRA retirement plan may be invested in a variety of different vehicles, and this includes everything from mutual funds and stocks to bonds and more.
An IRA works because one invests money, up to the amounts allowable under the tax law, and these investments are termed as being contributions are therefore are not taxed and in many instances an income tax deduction is actually available as well.
Types of IRAs
There are actually a few different options when it comes to an IRA retirement plan. The first type of IRA is a traditional IRA, and in this plan a person is able to contribute up to $2,000 per year. The amount of this contribution that is deductible on an income tax return depends on the person’s Adjusted Gross Income and whether or not they are covered under an employer sponsored qualified retirement plan.
Then there is also the option of an education IRA, which allows a person to put away up to $500 per year. This money will grow tax-free and also has preferential tax treatment upon distribution to the beneficiary who will then be able to use it for authorized educational expenses.
The SEP IRA is also available, and SEP stands for Simplified Employee Pension. This is an employer established and funded Simplified IRA where the employer is able to put up to 15% of the person’s compensation into a special IRA account.
There are also even a few other options when it comes to an IRA retirement plan, and this includes a Simple IRA and Roth IRA, which are both great choices as well.
Anyone can open an IRA and make contributions to it, but it is important first to become more educated and even to speak to a financial advisor who will be able to help the person step by step through this often confusing and intimidating process. Planning for retirement is very important but can definitely be overwhelming, and so it is important for anyone who needs help to take advantage of the wonderful help that is available to them here.
When it comes to retirement planning there are a few aspects which are of particular importance, one being the IRA retirement plan.
What it is
An IRA retirement plan, or Individual Retirement Arrangement plan, is one which allows a person to save money for use in retirement while deferring taxes on the account’s earnings. The funds that are put into this IRA retirement plan may be invested in a variety of different vehicles, and this includes everything from mutual funds and stocks to bonds and more.
An IRA works because one invests money, up to the amounts allowable under the tax law, and these investments are termed as being contributions are therefore are not taxed and in many instances an income tax deduction is actually available as well.
Types of IRAs
There are actually a few different options when it comes to an IRA retirement plan. The first type of IRA is a traditional IRA, and in this plan a person is able to contribute up to $2,000 per year. The amount of this contribution that is deductible on an income tax return depends on the person’s Adjusted Gross Income and whether or not they are covered under an employer sponsored qualified retirement plan.
Then there is also the option of an education IRA, which allows a person to put away up to $500 per year. This money will grow tax-free and also has preferential tax treatment upon distribution to the beneficiary who will then be able to use it for authorized educational expenses.
The SEP IRA is also available, and SEP stands for Simplified Employee Pension. This is an employer established and funded Simplified IRA where the employer is able to put up to 15% of the person’s compensation into a special IRA account.
There are also even a few other options when it comes to an IRA retirement plan, and this includes a Simple IRA and Roth IRA, which are both great choices as well.
Anyone can open an IRA and make contributions to it, but it is important first to become more educated and even to speak to a financial advisor who will be able to help the person step by step through this often confusing and intimidating process. Planning for retirement is very important but can definitely be overwhelming, and so it is important for anyone who needs help to take advantage of the wonderful help that is available to them here.
No comments:
Post a Comment