Ah, retirement. When you look down the road to your retirement, what do you see? Maybe it’s rocking chairs on the porch of a cottage by the lake, or perhaps it’s skydiving over Australia. Whatever you want your golden years to be, the time to start planning is right now.
One simple way to get started with your retirement savings is with an Individual Retirement Account, better known as an IRA. The term “IRA” actually refers to a variety of savings accounts that offer tax advantages for saving for retirement.
Some of the most common types of IRAs are:
- Traditional IRA – If you qualify, your contributions to a Traditional IRA are tax-deductible. For 2011, up to $5,000 can be deducted. Taxpayers over age 50 may contribute an extra $1,000 for 2011.
- Roth IRA – Contributions to a Roth IRA are not tax-deductible. The principal benefit of a Roth IRA is that qualified withdrawals are tax-free. Additionally, there are no mandatory withdrawals at age 70 1/2.
- SEP-IRA or SIMPLE IRA – Are you self-employed? A SEP-IRA or a SIMPLE IRA could make sense. These “employer-sponsored” IRAs have special rules and additional benefits like higher contribution limits.
Not sure which plan is right for you? Not to worry. Just like we helped you clarify how much coverage you need for your auto insurance, we can help you figure out which IRA best fits your lifestyle and your goals, and how much to contribute. Now, let’s get you ready for those golden years.