Everybody wants to be saving for retirement, most of us do not know where to start.
IRAs are a powerful tool that can help you to jump-start your retirement savings. For most using an IRA is a great option. An IRA can provide tax savings and opportunities for diversified investing.
There are two types of IRAs. Traditional IRAs are funded with pre-tax money. Roth-IRAs are funded with after-tax money. Since the Roth-IRA is funded with after-tax money withdraws from a Roth-IRA are tax-free. Traditional IRAs are taxed when you withdraw the money but you enjoy the tax savings in the year of the deposit. You situation matters when deciding between a Traditional-IRA and a Roth-IRA speak with one of our tax attorneys if you have questions about which option is best for you.
Because of the tax savings that exist with IRAs the amount you can contribute is limited by the government. You are allowed to invest up to a maximum $5,500 annually if you are under the age of 50 and a maximum of $6,500 annually if you are over the age of 50.
The younger you take advantage of IRA contributions the longer you get to take advantage of compound interest (see the photo for examples of compound investing advantage).
The question becomes, “should you invest in an IRA?” Many of us have 401k options at work. Before investing in non-work options make sure take full advantage of any matching opportunities your company may provide. Investing on your own outside of your 401k is just leaving money on the table if your work will match those funds. Once you have reached this goal you can move on to making decisions about IRA options. You should consider your entire estate before making any decisions.
Our Overland Park tax and probate attorneys can provide personalized one-on-one advice with the creation of your retirement plan. We will help you determine if a traditional or Roth IRA is right for you. We can also provide guidance on what your best retirement savings options are while keeping your assets safe from potential loss.
To find out more about how elder law attorneys can help with the retirement planning process, join us for a free seminar. You can also give us a call today at contact us online to get personalized help creating your retirement plans. Call now to get started. Do not wait too long and make it harder to achieve your retirement savings goals.
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