IRAs How would they benefit me?

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In summary, the conversation is about IRA accounts and their benefits. The speaker mentions that there is a lot in Ireland and asks for someone to fill in the blanks. Another speaker explains that IRA accounts are tax-sheltered and the most beneficial is the ROTH IRA, which allows for tax-free withdrawals after the age of 59.5 or for certain purposes. The contributions are not tax deductible. The conversation concludes by stating that IRA accounts offer advantages over other retirement accounts.
  • #1
Dx
Does anyone have one? How would they benefit me?
 
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  • #2
I believe there is quite a lot in ireland!
 
  • #3
Originally posted by username
I believe there is quite a lot in ireland!
 
  • #4
OK My knowledge of this is very basic, so maybe someone could fill in the blanks.

IRA's are tax-sheltered accounts-meaning they're deferred from being taxed on the icome generated from it.


The buzz word in finances is a ROTH IRA which offers you the most benefits of all the IRAs. This actually offers you the benefit of NOT being taxed at all for withdrawls, as long as you're at least age 59.5 or using it for a first time home purchase,used for death/disability, and it's been in existence for at least 5 years. The contributions however are not tax deductible.

Basically its a retirement account that offers those advantages over a standard 401K or other retirement account.

And that's about as much as I know
 

Related to IRAs How would they benefit me?

1. What is an IRA?

An IRA, or Individual Retirement Account, is a type of investment account that allows individuals to save for retirement. It offers various tax benefits and can help individuals build a nest egg for their future.

2. How does an IRA benefit me?

An IRA can benefit you in several ways. Firstly, it offers tax advantages, such as tax-deferred growth or tax-free withdrawals in retirement. It also allows you to save for retirement in addition to any employer-sponsored retirement plans you may have. Additionally, an IRA can provide flexibility and control over your retirement savings.

3. What are the different types of IRAs?

There are several types of IRAs, including Traditional IRAs, Roth IRAs, and SEP IRAs. Traditional IRAs allow you to contribute pre-tax money and defer taxes until retirement, while Roth IRAs allow for tax-free withdrawals in retirement. SEP IRAs are designed for self-employed individuals and small business owners to save for retirement.

4. Can anyone contribute to an IRA?

In general, anyone with earned income can contribute to an IRA. However, there are income limits for Roth IRAs and contribution limits for all types of IRAs. Additionally, if you have a retirement plan through your employer, your ability to contribute to a Traditional IRA may be limited.

5. When can I withdraw money from an IRA?

You can typically start withdrawing money from an IRA penalty-free at age 59 ½. However, there are some exceptions for early withdrawals, such as for certain qualified expenses or hardship situations. Keep in mind that Traditional IRA withdrawals are subject to income taxes, while Roth IRA withdrawals are tax-free as long as certain requirements are met.

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