Should you put money away that you cant access
until youre 59½? The answer, most emphatically,
is yes! The younger you are when you start saving, the less
youll have to save and the more you could have when
- Lorayne Fiorillo, author of
Financial Fitness in 45 Days
An IRA could be viewed as a wealthy relative whose money youll
inherit sometime in the future. Not exactly a bad way to think
of it, as long as you realize that you must also contribute
to the kitty, and that your relative isnt going to die
until youre retired.
In more realistic terms, an individual retirement account
(IRA) is a tax-advantaged way to accumulate retirement income
over the long-term. There are several kinds to choose from:
Your money will grow tax deferred, and you may be eligible
to deduct your annual contribution from your tax return.
Contributions are not tax deductible under any circumstances,
but withdrawals made for qualified reasons avoid taxes altogether.
Ideal for small business owners or the self-employed, this
IRA allows both employer and employee contributions.
Also ideal for small business owners or the self-employed,
this IRA does not allow employee contributions, but employer
contributions have much higher limits.