You work hard your whole life and dream about the perfect retirement on a small lake in Texas or along the stunning Caribbean coastline of Belize. But how do you get there and enjoy it while you’re still young? With an Individual Retirement Account (IRA). IRAs are a great way to save money and make your dreams come true. Here are some interesting facts about IRAs.
Fact 1: There are different types of IRAs that include IRAs, Roth IRAs, SEP IRAs, and Simple IRAs.
Fact 2: IRAs have big tax breaks so they’re perfect for saving for retirement.
Fact 3: IRAs are where you keep your assets, including stocks, bonds, mutual funds and other assets.
Fact 4: Unlike a 401(k), which is provided by the company you work for, you open an IRA on your own with the help of an investment broker.
Fact 5: You cannot open a joint IRA. No adding your wife, husband or kids. It’s an account just for you.
Fact 6: IRAs come with restrictions based on income and employment status. If you’re under 50, you can deposit up to $5,000 per year and if you’re over 50, you can deposit up to $6,000 per year. You’re also restricted on how much you can add each year and there are penalties for early withdrawal.
Fact 7: There is no age requirement. You can open an IRA for your kids and grandkids.
Fact 8: In order to make contributions to your IRA, you must be under 70 ½.
Fact 9: The first million dollars in your IRA is protected from bankruptcy.
Fact 10: To receive a tax deduction, the IRA must be set up on or before April 15 of the following year.