Over the past week we’ve examined the four types of Individual Retirement Accounts available to people in the United States: The Roth, Traditional, SEP, and SIMPLE accounts. Each has its options, requirements, and features which those eligible can utilize to increase their savings.
In short:
You contribute to your IRA from money you earn.
The amount you add is capped based on limits of income and contribution
The time of taxation on the money depends on which type you contribute to.
You can invest in whatever you choose within the account
Once you reach a certain age, you have to start withdrawing money from the account
You can withdraw from the accounts at any time, but face penalties except in certain circumstances
I hope that the last few days have been helpful! IRA awareness week was all about teaching you more about retirement options available to you. Please remember that these are by no means comprehensive – do more research to find out which is the best option for your personal situation.
One interesting note is that has not been covered already: the case of Rousey vs. Jacoway. On April 4 of 2005 the United States Supreme Court ruled unanimously that in the event of declaration of bankruptcy your IRA can be exempt from the bankruptcy estate. They indicated that because withdrawals rights are age based, IRAs receive the same protection as any other retirement plan. Up to $1,000,000 of IRA assets can be exempt from a bankruptcy estate, including both Traditional and Roth IRAs.
Tags: investing, IRA, long term, Retirement, setting goals
