| There are many ways to save for one's | | | | If they do not then half of these |
| retirement. It is very important to be | | | | contributions will be confiscated by the |
| well informed especially because few | | | | Internal Revenue Service. The opposite |
| employers do offer retirement plans. | | | | of a traditional Ira, the ROTH Ira does |
| Even in cases where it is offered | | | | not have any penalties on withdrawals |
| corruption and mismanagement abound. It | | | | but the contributor is taxed as soon as |
| means that individuals have to be | | | | he sets money aside. |
| proactive in managing their retirement | | | | Another disadvantage of the traditional |
| saving. There are two types of Ira; the | | | | Ira is that it has a 10% penalty for |
| traditional Ira and the ROTH Ira. | | | | early withdrawal from age 591/2 . This |
| By choosing this retirement savings plan | | | | penalty can be waived for the following |
| you make monthly or yearly contributions | | | | reasons a first time home purchase, |
| into an IRA account. These savings are | | | | higher education expenses, medical |
| not taxed until withdrawn. Ira | | | | expenses and payments to IRS among |
| contributions can be held at a bank or | | | | others. Otherwise one can only move |
| brokerage firm and can be invested in | | | | money from an Ira by roll over or |
| any choice of ventures including stocks, | | | | transfer but only for a limited period |
| certificates of deposit or mutual funds. | | | | 60 days maximum. At the end of the 60 |
| All earnings and profits will remain | | | | days the contributor has to rollover the |
| untaxed as long as they remain in the | | | | money back into the account. This is the |
| account. | | | | only way to keep your money from being |
| What are the main reasons for choosing a | | | | taxed. |
| traditional Ira over the ROTH Ira or any | | | | A traditional Ira also has contribution |
| other way of saving for retirement? The | | | | limits based on age, income, presence of |
| main advantage of the traditional Ira is | | | | employer plan and joint husband-wife |
| the tax savings offered. Also the tax | | | | contributions, which the Roth Ira does |
| benefit is applied immediately in the | | | | not have. The Roth Ira can allow those |
| same year of contribution. If a | | | | with extra income to increase their |
| contributor will be at a lower tax | | | | savings without the constraints of the |
| bracket upon retirement, then the | | | | traditional Ira. |
| contributions will be taxed at a lower | | | | If you are in your fifties and think |
| bracket upon withdrawal. This can lead | | | | that you have not contributed enough |
| to substantial savings in taxes. | | | | into your Ira then you can always make |
| Some of the disadvantages of the | | | | catch-up contributions so you can save |
| traditional Ira include penalties | | | | enough for retirement. Financial experts |
| applied for early withdrawals. | | | | agree that it is never too late to start |
| Contributors have to wait until the age | | | | saving for retirement and advice younger |
| of 70 to withdraw their contributions. | | | | people to start as soon as possible. |