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Putting money away for retirement is essential to safeguarding your financial future. In recent years, many employers have transitioned from pensions, so it’s now up to employees to determine how they’ll save. Fortunately, there are individual retirement accounts, or IRAs, available to make retirement planning simple and stress-free. Below, learn about these plans and how they can benefit a retiree. 

What Is an IRA?

An IRA is a savings account designed for retirement planning. These accounts are either tax-deferred or tax-free and were originally intended for workers who didn’t have access to pensions. Laws have changed since their inception in the 1970s, however, and now virtually anyone can open an IRA. With that being said, the eligibility for tax deductions through these plans is limited by income for anyone whose workplace offers them.  

What Are the Different Types?

Traditional IRA

retirement planningThese savings accounts are open to any individual, even if they have a retirement account through their employer. Contributions to these accounts can be deducted from taxable income, with limitations ranging from $6,000 to $7,000 per year. Withdrawals are subject to income tax, however, and taking money out prior to retirement could result in penalty charges in some cases.

Roth IRA

A Roth IRA is a retirement planning tool that is available to individuals who make $122,000 to $137,000 individually, or $193,000 to $203,000. Contributions are made with income that has already been taxed, so this type of account won’t bring down taxable income. Yet, withdrawals can be made at any time without taxes or penalties.

SIMPLE IRA

An acronym for Savings Incentive Match Plan for Employees, a SIMPLE IRA is a special retirement plan offered by businesses with 100 or fewer employees. They must match employees’ contributions up to 3%.

 

If you’re exploring your options for retirement planning, allow Stephan and Associates to help. Located in Xenia, OH, this wealth management company excels in helping individuals find the best options to protect their financial stability with retirement, estate, and education planning assistance. Explore their services online or call (937) 374-2002 to speak with a team member.

The content of this article is for informational purposes only and should not be considered a recommendation of any particular security, strategy or investment product or investing advice of any kind. Information contained herein has been obtained from sources deemed reliable but Spire Wealth Management, LLC and its affiliates do not guarantee its accuracy. The views and opinions expressed in this article are those of the authors and are subject to change. Index information is provided for illustrative purposes only. Indexes are unmanaged, do not reflect deduction of fees and expenses and are not available for direct investment. Investing involves risk, including the possible loss of principal.
 
Spire Wealth Management, LLC is a Federally Registered Investment Advisory Firm. Securities offered through an affiliated company, Spire Securities, LLC., a Registered Broker/Dealer and member FINRA/SIPC

 

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