Aging is inevitable, and so is the end of our service life at some point in time. After years of hard work, there comes a time when we have to move ahead, leaving behind our jobs and our 5-digit salaries.
Every person wants a secure retired life. It’s just that they have to be clever enough to choose a good retirement plan.
Nowadays, IRA retirement funds are quite a hit among people who pre-plan their retirement life.
What is IRA?
IRA (Individual Retirement Account) is one of the best ways to secure a good retirement life on a tax-free or tax-deferred basis. Being the citizens of U.S., we all need to pay income tax. Now, paying taxes while you have a job and a good salary might not be as big a deal as it could be once you retire. The IRA retirement fund helps you save sufficient amount of money for your retired life in a very tax-saving manner, because of which the IRA retirement funds are the most preferred retirement savings plan which people opt for.
Types of IRAs:
- Traditional IRA
- Roth IRA
- Rollover IRA
In the traditional IRA retirement funds, the contributions are made with pre-taxed money. This makes the fund tax-deferred until you withdraw it once you are retired. It gives you quite good gains as most of the retired individuals have to pay lower taxes than they were supposed to pay in their service life.
In the Roth IRA retirement funds, the contribution is made with the money that you have already paid taxes for. Eventually, your savings will grow tax-free. So you don’t have to pay taxes on the money that you withdraw once you retire. This is one of the most suitable forms of retirement plans as these Roth IRA retirement funds are tax-free altogether if certain conditions set up by the company regarding the insurance plans are followed.
So it’s time to pre-plan your tax-free or tax-deferred retirement life with the IRA retirement savings plan and enjoy a retired life where you have to pay less tax or no tax altogether on your savings.