Get Answers to 7 Critical IRA Questions
Whether you're already retired or still building your career, this guide provides valuable insights to help answer your 401(k) and IRA questions.
Get 401(k) and IRA Tips and Answers
Because they offer tax-deferred growth, individual retirement accounts (IRAs) are often the first thing people think about when planning for retirement. Although IRAs are a common investment vehicle for many people saving for retirement, they may not be the best retirement investment for you.
Some investors elect to save in an IRA because employer-sponsored plans like 401(k)s aren’t available to them. Other investors use IRAs to supplement their other retirement savings accounts. Whether an IRA is a good option for you depends on your personal financial situation and goals.
Types of IRAs
IRAs come in all shapes and sizes:
— Traditional (most common).
SEP, or Simplified Employee Pension (typically offered by small business owners).
— SIMPLE, or Savings Incentive Match Plan for Employees.
You don’t pay taxes on funds until they are withdrawn from the IRA (but watch out for heavy penalties if funds are withdrawn before you are 59 ½).
— Some of all of your annual IRA contributions may be tax deductible.
— Contributions are capped at $5,500, ($6,500 if you are 50 or older) in 2016*
Roth IRAs are similar to Traditional IRAs, but they differ in a few important ways:
— You must pay taxes on contributions ahead of time.
— You don’t pay taxes at time of withdrawal.
To learn more about the types of IRAs and their features and benefits, visit the IRS’s IRA page or talk to your tax advisor. Remember to review your personal financial situation, retirement goals, and savings objectives. IRAs are only some of the options available to you, and Fisher Investments can help you select suitable options for your financial goals.
IRA withdrawal rules are dependent on your age. Learn more about IRA withdrawals.
*IRS.gov, as of 01/28/2016