Individual Retirement Accounts are a popular way for people in the United States to save money to help them eventually be able to afford to retire from their jobs. IRAs are a great way to put money aside to invest in retirement, and they can also produce a great wealth-transfer vehicle to passing money onto your heirs if you don’t spend it all yourself. However, beyond just a way to save money, there are many other benefits of an IRA account as well. Here are a few.
Top Benefits of an IRA
1. IRAs provide a great tax benefit.
Contributions to a traditional IRA can be deducted from your income for the calendar year during which you contributed the money to your account. This helps lower your taxable income and may help you become eligible for other benefits and tax breaks in other areas as well.
2. IRAs can offer a source of cash in case of emergencies.
Roth IRAs let you take out contributions (not interest or profits earned) without a penalty. Roth IRAs allow you to take up to $10,000 out of your account annually for a 10% penalty before you are age 59 1/2.
Knowing you have some cash to get you through a hard time until you are back on your feet can put your mind at ease.
3. Your heirs can benefit.
Roth IRAs never require you to withdraw as much as one cent from the account, meaning that this is a great way to transfer wealth to your heirs. Passing on money you don’t spend in the form of a Roth IRA is a common practice for people who want to pass their wealth onto those they love after their passing.
4. You have the option of paying taxes now or later.
With a traditional IRA, you pay taxes when you withdraw money. With a Roth IRA, you pay the taxes along the way. The decision is in your hands depending on your financial situation and future plans.
5. An IRA can serve as a second retirement account.
IRAs are a great second retirement account, as it is acceptable to have an IRA as well as a 401k or other retirement account at the same time. Contributing to more than one account gives you more than one source of income to draw from and more financial security when you retire.
Contact Georgia Heritage Federal Credit Union to Open an IRA
These are just a few of the advantages of opening an IRA through your local credit union. IRAs are a great way to ensure you have a source of income for your future when you are ready to retire.
To learn more about the benefits of an IRA or to open your own with Georgia Heritage FCU, contact us through our website or call one of our branch offices throughout the Savannah Metropolitan Area.