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When (And Why) Should I Open an IRA?

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An IRA, or Individual Retirement Arrangement, is a powerful financial tool. It may be one of the best options available to help you achieve financial security during your golden years. If you do not already have an IRA, you are missing out on a golden opportunity and are losing out on financial benefits you can never regain. Act today to open your Individual Retirement Account so you can get on the path to financial freedom.

Parman and Easterday has extensive experience helping clients plan ahead for retirement. We know the rules established by the Internal Revenue Service for Individual Retirement Arrangements and will help you determine if you are eligible for the tax benefits an IRA can provide. We will also assist you in choosing the right type of IRA and getting the account opened and funded.

Why Should You Open an IRA?

You should open an IRA for a number of different reasons, such as:

  • IRAs make it easier to save for retirement: Depending upon the type of IRA you open, you can invest with pre-tax funds. This means you take a tax deduction for money put into the account. If you opt for a Roth-IRA instead, you invest with after-tax money but you take out money later tax free. With either type of account, the government essentially subsidizes your retirement savings.
  • Your financial security during retirement is up to you. Living on Social Security benefits alone is not a viable option for most seniors, as benefits are simply not high enough to pay for the cost of living. Social Security was supposed to be part of a “three-legged” stool, which included an employer pension, Social Security benefits, and personal savings. Today, most employers don’t offer a defined benefits pension. Social Security alone isn’t enough to pick up the slack, so you need to strengthen the other leg of the stool by saving more.
  • IRAs can keep your assets safe. IRAs get special protections under the law, so there is less risk that you will lose the assets you own in this type of account.

These are a few key reasons why it makes sense to open an IRA. An experienced retirement planning lawyer can help you choose between the different kinds of IRAs and to make decisions on what kinds of retirement investing are right for you.

When Should You Open an IRA?

You should open an IRA as soon as you can begin contributing money to it. The Internal Revenue Service (IRS) establishes annual limits for contributing to an IRA. Once a year has gone by and you have not contributed money to the account, the chance to make the annual contribution for that particular year is gone forever. You’ve lost the opportunity to put money into the account and get the tax benefits that go along with making the deposit.

It is a good idea to open an IRA as soon as possible so your retirement fund can begin growing and you can take advantage of compound interest. While putting money into any type of investment account is beneficial, since your money can start working to help your nest egg grow more quickly, IRAs get special protection  to keep your assets safe. For example, if you have to file for bankruptcy, the money you put into the IRA is an exempt asset and you do not need to worry that the money will be lost to pay creditor claims. When you have worked hard to amass a nest egg to provide for your financial needs during retirement, it makes sense to keep the money in an account where it will be safe for your future.

Getting Help From an IRA and Retirement Planning Lawyer

Parman and Easterday will provide you with assistance in all aspects of planning for retirement, including making the best use of IRAs. You cannot afford to waste time in building your wealth and achieving financial security. You only have yourself to count on saving enough for retirement. We work with you to make the process easy.

To find out more about how we help our clients, give us a call today at (405) 703-9987 or contact us online.

Larry Parman, Attorney at Law
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