An individual retirement account (IRA) is an excellent way for individual investors to build money for their retirement. Instead of an employer-sponsored plan like the 401(k), you can set up an IRA and have control over how much money you put in, and what happens to the contributions. It is a great choice for those that don’t have a retirement plan at work, or for those who also want to save for their own retirement.
The earlier you start contributing to an IRA, the better, as it will allow more time for your contributions to take advantage of the tax-free compounding interest that IRA’s offer. Anyone who earns an income, or who has a spouse who earns an income from a job that they are taxed for, can contribute to an IRA.
They are easy to set up and can be opened in person or online at a financial service provider. These service providers include your local bank, credit unions, discount brokerages, or brokerage firms. To decide where you set up your IRA, you should research the advantages and disadvantages of each service provider, and find one that will work best for you.
There are also two different types of IRA: Roth and traditional. Both of them have a range of pros and cons, so it can be challenging to decide which one to go with. The infographic makes it easier to understand the difference between the two so that you can choose the right IRA for you. Check it out below.
Infographic Design By Accuplan Benefits Services
