An Individual Retirement Account is know to most of us as an IRA. An IRA is an account that works similar to a savings account. Many small business owners and people who are self-employed open IRA’s. Some people open IRA’s because they want to have an extra retirement account other than their current 401(k).
If you are planning to get an IRA Yuba City CA, you may not be sure what type is the best option for you. There are several types of IRA’s that you are able to choose from. Before you choose the type of IRA that you want, you need to see which type is best for your individual needs.
One type of IRA is a Traditional IRA. This type of IRA is set up to be tax deferred. This means that you will only have to pay taxes on your money when you make a withdraw from that account. A traditional IRA will grow much quicker than some other accounts.
Another type of IRA Yuba in City CA area is a Roth IRA. If you have a Roth IRA, your account will be able to grow tax free. The amount of money that will be added to your Roth IRA account is after tax, so it won’t be taxed again when you withdraw money from it upon retirement. If you are interested in getting a Roth IRA, you need to check the income guidelines because it does have an income limit.
There are also Simple IRA’s. These are are incentive matching plans for employees. This type of IRA is tax deductible and employee contributions are required. These are great accounts for small business owners who have not set up a 401(k) plan. A Simple IRA is easy to start and easy to oversee. If your employer has set up Simple IRA plans the main requirement is that you have earned $5,000 for the last two years before the plan was set up and will make $5,000 the current year you are in.
Regardless of the type of IRA account that you have decided to open, it is a great way to save for your future. If you are ready to open an IRA, contact your financial institution to discuss the best option for you.
