![]() ![]() Once your account is open, you can select any of the investments available through the custodian. Your IRA provider is the custodian for your account, investing the money as you direct and providing regular updates on your account value. ![]() ![]() There is information about these types of plans in IRS Publication 560. What is an IRA?Īn IRA may be either an individual retirement account you establish with a financial services company-such as a bank, brokerage firm or mutual fund company-or an individual retirement annuity that's available through an insurance company.Ĭertain retirement plans, including a simplified employee pension (SEP) and a SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) may be set up as IRAs, though they operate a little differently from those you set up yourself. But in exchange for these tax benefits, there are certain restrictions. Tax-free means you owe no tax on your investment earnings at all, provided you follow the rules for taking the money out of the account. Tax-deferred means you postpone taxes until you withdraw money later on. Like other retirement plans, IRAs offer tax advantages-specifically, the potential for tax-deferred or tax-free growth. Individual retirement arrangements (or IRAs) provide a way for you to set aside money for your retirement-for living expenses and to pay for the things you want to do when you have the time to do them, such as traveling or learning new skills. ![]()
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