Have you been planning for your future, financial wise? I think we should start now…
I have come across a financial site that suggests the best possible options on where you can Open an IRA account. First I would like to know what IRA is. I got few simple definitions to know what IRA is from different sources. And second, I would like to know the benefits it can give.
What is IRA or Individual Retirement Account?
it is a form of retirement plan that provides tax advantages for retirement savings in the United States.
From InvestorWords.com - with broader definition
A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). The exact amount depends on the year and your age. IRAs can be established at a bank, mutual fund, or brokerage.
With these definitions have said, you can see IRA’s benefits to you as an investor. Since IRA is a tax deferred retirement account, it means that your savings are not taxed, not until you use it. They say, in some cases, that your tax rate will be lower and you will be paying less taxes on the money than if it taxed at the time you earned it. A tax benefit, right?
Another benefit is, since it is also a kind of savings you can benefit from the compounding interest computed in your money. Now, that’s more money in your savings.
Benefits such as these needs to be considered especially if you are in debt and really in need of money in the future. Opening an individual retirement account is not a bad idea. All we need to do is review the possible options where we can open our own IRA account.