Two ways to IRA
When it comes to individual retirement accounts, there are two ways you can go: traditional and Roth (Don’t look at us. We didn’t name them).
There are a few rules that apply to both types, however. Mainly, you must be under 70½ to open one. In addition, you can’t withdraw any funds from the account until you are 59½.
Traditional - Less tax up front, more at the back
With your traditional IRA, every time you make a deposit, you can deduct that from your gross income. However, once you withdraw those funds, you will pay taxes on the whole kit and kaboodle.
Roth - Taxes as you go, none at the end
With a Roth IRA, your deposits are not tax-deductible. That means you pay taxes on your money as you deposit it into your account. The silver lining? When you withdraw your funds in retirement, you don’t pay a dime to the government.
As always, consult your tax adviser for more information on exactly how an IRA will affect your specific tax burden.
The road to retirement can be long and winding, so be sure to come visit us at a Vibrant branch and we can work together to discover what the best option is for you.