An IRA is a financial account established at a financial institution that enables you to save tax-free or tax-deferred for retirement.
The three main types of IRAs each offer different benefits:
Traditional IRA
Earnings can grow tax-deferred until you withdraw them in retirement, and contributions may be tax deductible. Tax deferral is advantageous because the money may be taxed at a reduced rate, which benefits retirees who often find themselves in lower tax brackets after retirement.
Roth IRA
Contributions are made using post-tax funds. If certain requirements are met, retirement withdrawals are tax-free, and investments may grow tax-free as well.
Rollover IRA
This option allows you to transfer funds from a qualified retirement plan into a traditional IRA, such as a 401(k) or 403(b).Rollovers involve transferring eligible assets from an employer-sponsored plan into an IRA.
The tax advantages of an IRA, whether regular or Roth, can accelerate the growth or compounding of your assets compared to a taxable account.
According to the estimates of many financial experts, you might require up to 85% of your pre-retirement income in retirement. To build up the necessary savings, you need more than just an employer-sponsored savings plan, such as a 401(k). You have the option to make contributions to both an IRA and a 401(k).
An IRA can help you:
Contact Top Choice Insurance Agency, PLLC today at 5830 W Thunderbird Rd, Suite B8 PMB 1122, Glendale, AZ, 85306-4655 to learn how IRAs can enhance your retirement planning and secure your financial future. We are here to help you maximize your retirement savings!
