Retirement For Individuals
Which retirement savings options are right for you? The answer depends on your individual circumstances and number of years until retirement. It also depends on other factors such as availability and type of investment choices, fees, tax considerations, and accessibility of your funds.
For many investors, an IRA may be a great answer. An IRA can be an excellent way to save for and generate income during retirement. It can broaden your investment choices, offer certain tax advantages, and provide estate planning options that other savings vehicles may not.
How does an IRA work? An IRA is one of the most common types of retirement savings options. It is based on a provision of the tax code that allows you to set up an individual arrangement for your retirement. Some investment options within an IRA include, but are not limited to: mutual funds, stocks, bonds, annuities, and certificates of deposit (CDs).
How Do You Select An IRA? If your are just starting to save, changing jobs, or wanting to consolidate accounts, take time to learn more about:
Traditional IRAs allow certain individuals to save money tax deferred and, in certain circumstances, the ability to deduct contributions from their federal income tax returns. Contributions may grow tax deferred until they are ready to begin withdrawals. Distributions can be taken at any time, but may be subject to 10% IRS early distribution penalty if removed prior to age 59 ½.
Roth IRAs do not allow tax deductible contributions, but they do allow for the potential for federally tax free withdrawal of funds with no mandatory distribution age during the IRA owner’s lifetime. They also allow assets to pass to heirs federally income tax free. If you leave your savings in the Roth for at least five years and wait until you are 59 ½ to take withdrawals, you will not pay federal taxes on the gains.
A rollover IRA can help you save time and the opportunity to allow your money to grow tax deferred if you are changing jobs, retiring, or juggling multiple retirement accounts.
The best thing to do is view a traditional and Roth IRA side by side to make a good decision.
The Hancock Group can assist you in selecting the type of IRA that is right for you. Call us today at (814) 944-8849.