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| until withdrawn.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