Why Opening An IRA Is The Smartest Way To Supercharge Your Retirement Savings

IRA stands for individual retirement account. It’s a savings account with big tax breaks, making it an ideal way to save for your retirement. Unlike other types of retirement funds that are usually provided by the company you work for, IRAs are accounts that you set up on your own. There are also some IRAs that can be set up by small business owners or people who are self-employed.

Why is an IRA a good idea?

An IRA allows your savings to grow and appreciate without being taxed. The initial investment is free of taxation, plus you can also get tax gains on the money you withdraw in your retirement.

So what is the catch?

The government puts a limit on the amount of money you can put into an IRA each year. Most people under 50 can contribute no more than $5,500 a year and that limit rises as you get older. The younger you start your IRA the better.

Where can I get a IRA?

You can open an IRA through almost any large financial institution like a banks or a mutual fund company. Most offer a range of options, from money market funds to mutual funds to individual stocks and bonds. The major difference between each will be the fee structure - be sure to make some comparisons on fees or any other charges before you make a decision.

When can I access money from my IRA?

You can withdraw money from your IRA whenever you want, but if you are younger than 59, it may cost you. The government want to discourage from withdrawing early, so there are often large penalties for withdrawals when you are under retirement age.