IRA Explained: Your Guide to Individual Retirement Accounts
A common question for financial advisers or employers offering a sponsored plan is what is an an IRA. IRA stands for Individual Retirement Account. There are several types of IRA's, including the two most popular which are the traditional and Roth. An IRA allows you to save for retirement, either tax free, or by deferring taxes until retirement age.
Roth IRA
A Roth IRA is a tax free way to save for retirement. All money that is contributed is post tax earnings. There are no taxes owed at the time of retirement. Also, there are income restrictions for contributions and contribution limits. A Roth allows you to make withdrawals without penalties, for any reason.
Traditional IRA
A traditional IRA allows you to make contributions that are tax deductible. There are a few restrictions with this type of savings plan. You cannot withdraw any money from the account until the age of 59 1/2. Also, most withdrawals before retirement age, are subject to taxes and a penalty. There are a few exceptions considered hardships where you can make withdrawals penalty free, but taxes are still owed. A hardship includes medical expenses, tuition for a child or buying a home.
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Understanding TDA Retirement Plans: A Guide for Nonprofits
A TDA, or tax deferred annuity, is a tax-favored retirement plan that allows an employee of a nonprofit organization to contribute money pre-tax toward retirement. Over 156 million people had a TDA re
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Education IRA: Tax-Advantaged Savings for Education Expenses
An education IRA is an individual savings account used for education expensesExpensesAn expense is a type of expenditure that flows through the income statement and is deducted from revenue to arrive
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457(b) Retirement Plans: A Comprehensive Guide for Employees
A 457 retirement plan is an employer-sponsored retirement plan, similar to a 401(k), that can be set up for employees of state and local governments or tax-exempt organizations. If enrolled in a 457 p...
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Protect Your Retirement: What to Do When Your IRA Loses Value
With the economy roiling, many investors have lost or are losing money on their IRAs. It can be depressing to open your quarterly statement to see that your retirement money is steadily shrinking. The...