Opening IRAs is a smart choice if you are serious about having a financially secure retirement. Too many people are left without adequate pensions and are forced to struggle only on limited savings or Social Security benefits. You don’t want your golden years to be a time of financial deprivation and money worries, so you need to make smart investment choices. Investing in an IRA is a wise move, but you need to understand different kinds of IRAs and choose the right one for your situation.
Nirenstein, Horowitz & Associates provides comprehensive assistance with retirement planning. We help you to understand the role of IRAs in a detailed plan for financial security. We also provide assistance with all of the other issues that matter when it comes to retirement investing. This includes things like setting goals, automating investing, and protecting your nest egg. To find out more about how our Connecticut IRA and retirement planning lawyers can offer you the assistance you need to be financially secure as a senior, give us a call.
Types of IRAs to Consider
There are several different types of individual retirement arrangements that you may wish to consider as you save for your retirement. The IRS list different options including traditional and Roth IRAs; as well as Simple and SEP plans.
Traditional and Roth IRAs are the two IRAs that most people end up selecting between when they open their own retirement account to save for the future. These two options are available to wage earners and, as of 2016, a total of $5,500 per year can be invested across both these accounts each year. You can invest in an IRA with pre-tax funds if you opt for a traditional IRA (although higher income earners begin to lose the ability to deduct funds once their income reaches a certain level).
With a Roth-IRA, you invest with post-tax funds, but you get to take money out tax free during your retirement. The decision of which account to choose should be made based upon whether you think your tax burden is higher when you are working and saving for retirement or whether you think that you will face a more substantial tax burden when withdrawing funds during your retirement years.
For the self-employed and small business owners, Simple and SEP plans are also an option and allow for larger deductible contribution amounts. You should speak with an attorney about whether one of these options may be right for you if you run a small business or if you have non-wage income.
Why You Need to Choose an IRA to Invest In
Choosing an IRA to invest in is a smart option for many reasons. You should invest in an IRA because:
- You get tax advantages. By taking advantage of the ability to deduct the amount you invest or to withdraw money without paying taxes on it, your money goes much farther. The government essentially subsidizes your investment and helps you to save for retirement.
- You get protection: IRA accounts are given certain types of legal protection which are not available for traditional non-retirement investment accounts. For example, if you get into financial trouble and you have to file for personal bankruptcy, you don’t have to worry about losing the IRA. It is an exempt asset and the money in the IRA won’t be used to pay creditors.
The sooner you begin investing in an IRA, the more you can take advantage of the tax breaks that are available for annual contributions and the easier it will be for you to save. Social Security benefits are often insufficient for people to survive on as seniors, and few employees today offer defined benefit pensions or much in the way of retirement assistance for their workers. By making sure you have set aside money early, you can benefit from compound interest and achieve financial security as you get older.
Getting Help from a Connecticut Retirement Planning and IRA Lawyer
Investing in IRAs is one of the most important ways to save enough for a secure retirement, so don’t wait to get started on exploring IRAs and opening an account that maximizes your tax benefits. Nirenstein, Horowitz & Associates can help. We will offer all of the advice you need on retirement planning to achieve your dreams, so give us a call at 860-548-1000 or contact us online to find out about the ways in which we can assist you. You can also join us for a free seminar to get some important info on retirement planning and more.