When it comes to retirement planning, you have several options for saving. Even if you have a 401k through your employer, is it going to be enough to retire on? The friendly and helpful staff at DFW Retirement Planners can assist you with figuring out how much money you’re going to need for retirement and you can also find out about the different retirement savings options that are available to you. One of the most popular ways to save for retirement is an IRA.
What is an IRA?
IRA stands for “individual retirement account” and it’s an investment that’s held by either a broker or a bank. With a traditional IRA, the contributions and growth may be able to be tax deferred until you start to draw off of the account. Since each person’s situation is unique, it’s best to contact DFW Retirement Planners to inquire about whether or not tax savings will apply to your specific situation.
What are the advantages of an IRA?
One of the biggest advantages of using an IRA to save for retirement is that anyone can open an IRA account as long as they have income. The only age restriction is that you can’t open an IRA if you’re older than 73 unless you’re funding your IRA with a rollover from another account. Also, if you don’t have an income but your spouse does, you can open an IRA.
With an IRA, your account is opened by you. There doesn’t have to be any participation from your employer, which gives you more control over your money. You can decide how much you want to contribute per year, up to the allowable maximum contributions. Other IRA advantages include:
∙ Tax-deferred savings
∙ Possible tax deductions (depending on your specific situation)
∙ There are no annual minimum contributions
∙ Your funds are accessible (taxes, fees, and penalties are applied if you make a withdrawal prior to age 59 and a 1/2)
∙ You aren’t required to start taking distributions from your IRA until the start of the year that you turn 73.
How much can I contribute to an IRA annually?
Currently, for those younger than 50, you can contribute up to $7,000 annually to a traditional IRA as long as you have at least $5,000 in income for the year. If you earn less than $7,000 annually, you can only contribute up to the amount of your income for the year. If you’re over age 50, you’re allowed to contribute an extra $1,000 per year as a catch up; making the total allowed contribution $8,000. Contribution regulations are subject to change and the staff at DFW Retirement Planners will be happy to assist you with figuring out your IRA contribution limits.
For all of your questions on IRA’s or if you’re ready to open one to start saving for retirement, contact DFW Retirement Planners. Our two offices are located in Fort Worth and Dallas, Texas and we’re happy to assist you with your retirement and financial planning goals.