People of every age and income have them—among the genders, about equally. The average one nationwide is worth $157,000, but you can start one with $100. About 30% of all taxpayers have one, according to the Tax Policy Center Briefing Book.
And IRAs (Individual Retirement Accounts) are at the heart of a lot of financial plans and planning.
We can vouch for their popularity. Just over half of your assets in our care at 228 Main are in IRA accounts of one type or another, totaling more than $60 million (per LPL Financial’s January records for Mark Leibman).
This time of year is IRA season. Although you may contribute any day of the year, you can still make contributions for the previous year up until Tax Day.
Here are some basics about IRAs. You’ve got…
- Two ways to contribute: put money in or transfer from 401(k) plans by rollover.
- Two basic flavors: Traditional and Roth.
- Two fundamental uses: save for retirement or draw income from them in retirement.
People use them partly because they are one of the most widely available tax shelters. How you might best take advantage depends on your situation, but these plans offer thousands of investment options. The maximum contribution is $6,000 per year—or $7,000 if you are over 50. (Rollovers from employer retirement plan have no limit.)
If you would like to review your IRA plan, see what you are eligible for, check out the conditions and limits, or just talk retirement planning, ‘tis the season! Email us or call.
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