Use Individual Policies Instead of Company-Based Programs For Retirement

Personal finance

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Are you looking to start investing in your retirement? Maybe you’re already retired and you want to further ensure your economic stability. If so, then you should consider an Individual Retirement Account. IRA’s are a simple way to invest in your future and offer many benefits.

An IRA is a retirement plan solely for the benefit of individuals or their beneficiaries. It’s basically a high yield savings account that offers users huge tax breaks. It is not an investment in itself, but is merely the term given to a group of investment such as stocks, mutual funds, and other assets.

Unlike a 401(k), which is a program usually offered by a company or employer, an IRA is an individual policy started and controlled solely by the policy holder. This allows you the kind of freedom to invest and start at your own discretion. Also, money from an IRA can be withdrawn at any time, while funds for a 401k can only be withdrawn after retirement age under the penalties of heavy taxation.

There are several different kinds of IRA’s. A traditional IRA’s is a tax deferred retirement account that is only taxed when withdrawals are made after retirement. This means that all of your interest and capitol gains are allowed to compound every year free from taxation, which allows traditional IRA’s to grow  faster than other taxable accounts.

A Roth IRA is similar to a traditional IRA, but the difference comes from the way you pay taxes on your Investment. With a Roth IRA you pay into the account and the initial investment is taxed from the begining. This means that you pay the taxes now rather than later, and the money is allowed to grow tax-free over the life of the investment. When you start withdrawals upon retirement, there is no fee or taxation. Every single dime you invest goes back to you.

There are also SEP IRA’s for small business owners who employ a certain number of employees.  SIMPLE IRA’S is a savings incentive match plan, and is usually used by small businesses and individuals who are self-employed. You can check out the IRS web site for more information on all of the retirement plans to see if you qualify.

If you hope to invest in your future check out some of these excellent retirement plans. Though there are many options for retirement, IRA’s are a great investment and worth your time.


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