With all the life milestones ahead of you or already in your midst, such as getting married, purchasing your first home, or raising children, it may seem like saving for retirement is a long way off. Just like all the other important aspects of life, your future retirement should not be left to chance. With living day to day, you might find yourself without a means to retire if you haven’t intentionally focused on it.
What if your current employer doesn’t offer a traditional retirement program? What if you change jobs? Wherever you are on your professional journey, let an individual retirement account or IRA help you plan for your retirement as your life changes.
As a business owner, maybe you think your business is your retirement plan.
If you’re starting a business, you might think that the business you’re building will provide for your retirement future. However, the responsibility to save for retirement is even greater because setting the intention begins with you not your employer. It is easy to be so laser focused on building and growing your business that you forget to plan for the aftermath.
Make the most of your retirement saving years with one of the following IRA retirement accounts:
|Traditional||An individual retirement account that provided tax savings by allowing investment contributions to grow tax deferred until retirement. Usually traditional IRAs are funded with pre-tax dollars and subject to annual contribution limits set by the IRS. Contributions may be tax deductible if you also invest in an employer’s retirement plan and reach a certain income level.|
|Roth||A Roth IRA is similar to a traditional IRA except it is funded with after-tax dollars and provides tax-free earnings and withdrawals. Roth IRAs don’t indicate an age when minimum distributions are required and contributions can continue after reaching the government-designated retirement age. Finally, you can make withdrawals on your contributions prior to retirement without penalty provided it has been at least five years since your first contribution.|
|SEP||A Simplified Employee Pension IRA or SEP IRA allows self-employed individuals with no employees or a small business to contribute to a retirement account. For a self-employed individual, contributions are fully tax deductible.|
|Rollover||A rollover IRA allows a tax- and penalty-free distribution of retirement assets from one retirement plan, such as a company 401(k), to another retirement plan like a traditional IRA. Once the rollover contribution is made to the receiving retirement account, the remaining account functions like a traditional IRA. Rollover IRAs help employees changing jobs to maintain the tax benefits of the company retirement plan and avoid early withdrawal penalties. It also allows the employee to access a larger variety of investments than what is typically available in an employer’s 401(k) plan.|
|Simple||A Savings Incentive Match for Employees or SIMPLE IRA is a retirement plan offered by small businesses with up to 100 employees. Like a 401(k), contributions are made by the employee with pre-tax dollars with a company match. Contributions grows tax deferred until retirement. SIMPLE IRAs also do not provide a borrowing feature like other retirement plans.|
With an IRA, you can keep your retirement savings plans on track no matter how your professional life changes over the years. Set up an IRA and know that you are taking the necessary steps toward a relaxing well-earned retirement.