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Facts About IRAs That You Should Know

An IRA can be a very useful tool for saving money and there are a number of things you will want to know about it. If you want to save up for college, retirement, or just about anything else, this information will be incredibly useful. A lot of people open up IRAs because of how effective they are for saving money.

The more you learn about IRAs, the better your chances will be of saving money efficiently. Whatever you want to save up money for, an IRA is a great financial vehicle to get you to where you need to be.

Contribution Limits

The IRS will let you deposit as much as $5,000 each year if you are younger than fifty years old. You can deposit up to $6,000 each year if you are past the age of 50. It is important to keep these limits in mind so you will know exactly how much you can deposit. Another requirement is that you have earned income that you can put towards your IRA.

Types of IRAs

Despite what some people think, there is more than just one type of IRA. There is a traditional IRA and a Roth IRA. Banks like BB&T usually offer both options, and it’s important that you know the difference between them. With a traditional IRA from a BB&T bank, you don’t have to pay taxes on any of your gains until you begin taking distributions. A Roth IRA will require you to pay all of your taxes immediately. A Roth IRA is an excellent choice, though it’s still important to weigh your options.

Eligibility

There are certain requirements that you will have to meet to get an IRA. When you have a traditional IRA, you will only be able to remove contributions if your family earnings sink below the maximum amount and you have some sort of employer-sponsored retirement plan. With a Roth IRA, none of your contributions are deductible, and there are certain limits placed on income.

Costs

If you are seriously interested in opening an IRA of some kind, you will have to find a bank to go through. There are also brokers that can help you out, but you will be required to pay a fee. One of these professionals can assist you with setting up your IRA.

You Can Have Both an Ira and a Work Retirement Plan

You will be able to open up an IRA, even if you already have a retirement plan through your work, such as a 401(k). A lot of people seem to believe that you cannot have both at the same time, but this is just isn’t the case. The one catch is that you may not be able to deduct the contributions to your IRA.

IRAs can be helpful when it comes to saving up money for retirement, but you will want to learn as much as possible about them. When you take the time to get this information, you will essentially be helping your future self.