When it comes to retirement planning, Individual Retirement Accounts (IRAs) are a popular and powerful tool. With the right IRA plan, you can save for your future and enjoy tax benefits. But with so many different IRA options available, it can be difficult to know where to start. This beginner’s guide will help you understand the different types of IRA options and how they can benefit your retirement plan.
Traditional IRA
A traditional IRA is one of the most common types of retirement accounts. With a traditional IRA, you can put pre-tax money into the account, allowing you to take advantage of tax deductions in the current year. The money grows tax-deferred until you decide to withdraw funds when you reach retirement age.
Roth IRA
The Roth IRA is another popular type of retirement account. With a Roth IRA, you contribute after-tax money to the account, meaning you won’t receive any tax deductions in the current year. However, when you withdraw funds in retirement, you won’t have to pay any taxes.
Self-Directed IRA
A self-directed IRA is a type of IRA that allows you to make all of the investment decisions, rather than relying on a financial advisor. With this type of IRA, you can invest in a wide variety of assets, including stocks, bonds, mutual funds, real estate, and more.
These are just a few of the different types of IRA options available. There are many other options available, so it’s important to do your research and carefully evaluate your options.
