No matter what age you are, it’s never too late to think about retirement. Individual Retirement Accounts (IRAs) are a great way to maximize retirement savings while taking advantage of tax benefits.
While Bank of the Ozarks offers four different IRA products, there are actually five ways to open an IRA: you can open a new one, rollover an existing IRA, transfer an existing IRA, rollover from a Qualified Plan or you can inherit an account. Read about them below to decide which one will help you prepare for your retirement. But before you begin, there are two main parts to every IRA that you should understand: Contributions and Distributions.
- An IRA “contribution” is the money you put into your IRA.
- Deductible and Non-deductible contributions.
- You must have earned income in a year to deposit money into your IRA.
- An IRA “distribution” is the money you take out of the account.
- The main difference between IRAs is whether the distribution is penalized or not and taxed or not. It all depends on your age and the type of IRA you have.
- Depending on the type of IRA, there may be tax penalties for withdrawing money before a certain age.
If you’re interested in tax-free contributions, read about a Traditional IRA.
If you’re interested in tax-free distributions, read about a
If you want to save for someone’s future education, read about Educational IRAs.
If you’re an employer wanting to set up a retirement plan, read about SEP IRAs.
If you changed jobs or retired, you can grow your assets with a Rollover IRA.
If you’re the beneficiary of an IRA, continue growing assets with an Inherited IRA.
If you want to move assets from one IRA to another like it, read about Transfers.