Retirement Planning Advice On Individual Retirement Arrangement (ira) part Ii

In this article, we continue from the Part I to focus on more types of IRA plans

.

Most of us have different expectations from our retirement years but there is one expectation that is common-financial independence. Therefore, it comes as no surprise when every individual invests in a retirement fund conducive to his/her expectations. Many seek comprehensive retirement planning advice from experts before they consider saving. In the United States, many people have Individual retirement arrangement (IRA) that has tax benefits for its holders. The money invested in this plan helps in the reduction of the total tax liability of an individual. IRA was formed by the government in 1974 for safeguard Americans against the disasters of poor pension plans .IRA is of five types namely Roth IRA, Traditional IRA, SEP IRA, SIMPLE IRA and self directed IRA. The section provides retirement planning advice that helps us to understand the different types of IRA.

Types of Individual Retirement Arrangement (IRA) accounts

Roth IRA - In this type of Individual retirement arrangement, the savings are generally not taxed, if certain conditions are fulfilled. The various types of Individual retirement accounts differ in their tax deductions and the contributions that can be made to them. The Roth IRA is different from the others as the individual benefits by getting a tax relief at the time of the retirement. In comparison, other types of IRAs provide tax relief when an individual is saving for the retirement. Withdrawals can also be made anytime from the Roth IRA account without having to pay any penalty even before one reaches the age for withdrawals of fifty-nine and half years. In other types of IRA, withdrawal before the legal age results in penalties. In this type of IRA, the maximum contribution is of $5000 in a given year. The other factors that influence contributions are whether a person is filing singly or as married and the limits of his/her gross income. In spite of qualifying fo9r a 401K plan, an individual can still quality for the Roth IRA plan.

SEP IRA In addition to the traditional and Roth IRAs, there is another type of IRA that allows a small business of a self employed individual to make contributions towards a retirement fund. Contributions made are in the name of the employee and not in the pension fund of the company.

by: EnTrusted

POST COMMENT

Buy Excellent Dresses For Your Marriage The Modern Fireplaces Historical Lifestyle Wind Chimes An Identity Of Police Officials- Law Enforcement Badges The Collapsible Bulk Container With Hopper Bottom For Dosed Unloading Cleaning Up Damage From Water Wants To Buy Oil Painting? Key Points To Remember Before You Make A Purchase Mortgage Broker Deals Professionally & Promptly Compound Interest Calculator: Your Guide To Be Successful Executive Mba Program At Iim-shillong A Brief Political History Of Ecuador Ways To Solve Air-soft Firearm Problems Tips T Find Personalised Number Plates