Individual Retirement Accounts

Find Out How to Save for Retirement With an IRA

People love to do things on their own, such as remodeling a kitchen, creating art or growing a garden. If you want to invest on your own, individual retirement accounts (IRAs) are a popular option for do-it-yourself investing. They can help you mold your retirement future with your own hands.

What is an IRA?

An IRA is a personal investment plan that is designed to help people save for retirement. As long as you earn taxable income such as wages, salaries, fees, tips, bonuses, commissions and taxable alimony, you can contribute to an IRA.

Types of IRAs

  • Traditional − You can take a tax deduction on current contributions. This IRA allows the potential for tax-free compound growth. You pay taxes when you make a withdrawal.
  • Roth − You pay taxes now and take tax-free income later, assuming the account has been held for at least five years and you are at least 59½ years old.
  • Rollover − This IRA is designed for job changers, recent retirees or those wanting to consolidate retirement plans from previous employers.

There is no minimum or required IRA contribution and all earnings from a traditional IRA are untaxed until withdrawn. Withdrawals from a Roth IRA may be tax-free under certain conditions.