IRAs are Individual Retirement Arrangements. These tax-advantaged accounts are used by many people to save for retirement and they have substantial benefits for those who wish to invest for the future. While almost everyone should have an IRA, as long as you are eligible to put money into one, you need to be certain that you are making the right plans for your investments. This means choosing the right kind of IRA.
The Law Offices of James A. Miller, P.C. can provide you with assistance in understanding your retirement planning options and in setting retirement goals. Your future financial security is in your hands and you don’t want to take a chance on not making the right choices, especially as fewer and fewer employers offer pensions and as social security benefits are limited.
To make sure you can achieve financial security, you need to find out what type of IRA is right for you and begin investing as early as possible. Give us a call today to get started.
What are the Different Types of IRAs?
The Internal Revenue Service provides a summary of different types of IRAs on its website. The IRAs which are listed include:
- Traditional IRAs– Traditional IRAs allow you to invest with pre-tax money. You take a deduction for money put into the account. You can choose this option if you think you’re going to have a lower tax bracket during retirement than you do when working.
- Roth IRAs– Roth IRAs are invested in with after tax funds but growth is tax free in this type of account. As long as you make a qualified distribution, you don’t pay taxes on the money that you take out of a Roth-IRA. Because taxes are not paid on withdrawals, this option is the recommended type of individual retirement arrangement if you think you will be in a higher tax bracket when you are a senior and drawing from your retirement funds than your tax bracket when you are working and contributing to your IRA.
- Simple IRAs– Simple IRAs are savings incentive match plans. Small business owners can use Simple IRAs to help employees save for retirement. Employees can put aside a percentage of their income, tax free. Money is withdrawn from paychecks and paid to the investment account. Employers match contributions, up to a percentage.
- SEP IRA Plans– SEP IRAs allow self-employed people to contribute with pre-tax funds. They are different from traditional IRAs because contribution limits are based on a percentage of income so larger amounts of money can be contributed each year to a SEP-IRA.
- Payroll Deduction IRAs– Employees establish IRAs and authorize payroll deductions so money is taken out of their paychecks and put into the IRA. Companies of any sizes are permitted to establish an IRA payroll deduction program.
Because the rules for each different kind of IRA can vary substantially, you need to make sure you make an informed choice about which retirement plan will provide you with the most advantages. A retirement planning lawyer can assist you in taking smart investment steps.
When Should You Make an Investment in an IRA?
You should make an investment in an IRA as soon as you can. There are annual limits regarding how much you can contribute and still get tax breaks. Missing a year means losing that year’s contribution forever. As you get older and advance in your career, you may also begin to make more money and approach or exceed the income limits so you could lose the chance to take deductions.
Investing in IRAs early also means you are putting aside money for retirement early. This is important because you want to be financially secure during your golden years. The younger you are when you start retirement investing, the easier it is for you to save enough because compound interest helps your money to grow.
How can an IRA & Retirement Planning Lawyer Help?
The Law Offices of James A. Miller, P.C. can provide you with invaluable retirement planning advice, including assisting you in understanding the different kinds of IRAs. To learn more about the ways in which we can help you to plan for your retirement future, join us for a free seminar . You can also give us a call at 866-370-3888 or contact us online to speak with a member of our legal team to get personalized advice on the type of IRA that is right for you. Call now to start making your retirement dreams come true.
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