With all the uncertainties in today’s economic world, it’s time to take charge of your own retirement. But which Investment Retirement Account (IRA) should you choose?
There are two main kinds of IRAs—a Traditional IRA and a Roth IRA. The traditional IRA does not tax the money placed in the account (this is known as a tax-deferred investment). If you’re eligible you can even get a special tax deductible account. However, the money will be taxed when it is taken out for retirement. The main advantage is that you will have more money growing in the account instead of taking a bite out of it every tax year.
The Roth IRA, on the other hand, involves paying taxes up-front. Once the money is in the account, anything it earns does not get taxed. So, once retirement hits, paying taxes is one less thing to worry about. It does require that you earn less than $125,000. But it has fewer rules about when or how much you can withdraw.
Once you have decided which account to put your money in, one of the great things about IRA’s is that you can invest the money without taking it out of those accounts. There are a number of different investment options available. If you prefer not to take risks and are willing to accept lower returns on your money, Money Markets or Stable Value Investments might be best.
Of course there are various considerations that must be made, as you look at the different gold ira review investment options. How long it will be until you retire? How much do you hope to have in your account by then? If you are willing to take a little more risk you may want to invest in Bonds or Stocks.
The key difference between bonds and stocks is that, with bonds, the money is being given to someone (such as a government or company) who promises to pay the money back at a certain time, with interest. The risk lies in the possibility that the money may not be paid back if, for example, multiple home-owners were unable to pay their mortgage. With stocks, however, the money is not owed. You actually become a partial owner (shareholder) of a company. If they do well and have a bright future then you will gain money, but if they start to do poorly then you may lose money.
Usually, when you invest in a stock fund, it’s not an all-your-eggs-in-one-basket deal. The fund has multiple stocks, so that you are not likely to lose everything if one were to fail. But it’s always important to know what kind of stocks you are investing in.