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IRA Investing

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What is IRA Investing?

IRA Investing is how people invest for their retirement. IRA stands for Individual Retirement Account. So when you are IRA investing, you’re setting money aside for your individual retirement. The IRA allows the investor to defer and even eliminate taxes at retirement, depending on which IRA account they choose.

Roth IRA Investing allows the retirement saver to accumulate taxed money to continue to grow without being taxed on any gains before and after retirement at age 59 . The main stipulation is that the IRA account has to be held for a minimum of 5 years. These are very popular due to the tax free distribution at retirement.

Traditional IRA Investing allows the retirement saver to reduce their current taxes by writing off the investment thereby deferring taxes until distribution at or after age 59 . People with higher incomes tend to use this type of IRA because it may save them taxes on their incomes vs. the Roth IRA which does not offer income tax savings today.
 

In both of these IRA accounts there is usually a 10% penalty for early withdraws before age 59 .

Many people confuse IRA investing accounts with the investments. The IRA investing account is the retirement plan, and many different investments are allowed for these accounts. Most people use Mutual Funds or Stocks & Bonds for their IRA investment accounts. However, there are lots of other investments that qualify for IRA’s including Certificates of Deposit (CD’s) and, Real Estate Investment Trusts (REITS).

All of the above mentioned investments can also be bought outside IRA accounts in what is known as “Cash Accounts”. These accounts do not enjoy the tax advantages of IRA accounts, but offer liquidity without penalty for withdrawals before retirement age.

With the future of Social Security benefits in question, it is important that we plan an IRA investing account that suits our individual needs while we are still working so we can be financially secure in our retirement years.

Please choose from the list of topics for additional information:

401K Rollover Annuities Bonds Investing
Corporate Bonds Forex Trading Futures Trading
Investment Advice IRA Investing Mutual Funds
Mutual Funds Comparison Options Trading REIT
Roth 401K Roth IRA Tax Liens
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