Retirement accounts are special savings plans that help you save money for when you stop working. One type of retirement account is called an IRA, which stands for Individual Retirement Account.
An IRA is a personal savings plan that you can set up yourself, without needing help from an employer. There are two types of IRA accounts: traditional and Roth.
Traditional IRA
A traditional IRA allows you to make contributions with money you may be able to deduct on your taxes. The money in the account grows tax-free, but you have to pay taxes on the money when you withdraw it in retirement.
Learn more about Traditional IRA here.
Roth IRA
A Roth IRA allows you to make contributions with money you’ve already paid taxes on. The money in the account grows tax-free, and you can withdraw it tax-free in retirement.
Learn more about Roth IRA here.
To set up an IRA, you will need to choose a financial institution, such as a bank or investment company, to hold your account. You can then make contributions to the account by transferring money from your checking or savings account.
You can also choose how to invest the money in your IRA. Some common options include stocks, bonds, mutual funds, and index funds. It’s important to do your research and choose investments that align with your risk tolerance and financial goals.
Overall, an IRA can be a great way to save for retirement and potentially lower your taxes. It’s important to talk to a financial advisor to determine if an IRA is right for you and to understand the rules and limits for contributions.
